Under Tex. Prop. Code § 5.016, a person may not convey an interest in or enter into a contract to convey an interest in residential real property that will be encumbered by a recorded lien at the time the interest is conveyed unless, on or before the seventh day before the earlier of the effective date of the conveyance or the execution of an executory contract binding the purchaser to purchase the property, an option contract, or other contract, the person provides the purchaser and each lienholder a separate written disclosure statement in at least twelve-point type that provides the information set out in the form below.
A violation of this section does not invalidate a conveyance. Except for certain transactions exempted from the disclosure requirements, if a contract is entered into without the seller providing the notice, the purchaser may terminate the contract for any reason on or before the seventh day after the date the purchaser receives the notice in addition to other remedies provided by this section or other law. Tex. Prop. Code § 5.016(c) exempts a number of transfers from the disclosure requirements, including transfers in which the purchaser obtains a title insurance policy insuring the transfer of title to the real property and transfers to a person who has purchased, conveyed, or entered into contracts to purchase or convey an interest in real property four or more times in the preceding twelve months.
Under Tex. Prop. Code § 5.016(d), a violation of this section is not actionable if the person required to give notice reasonably believes and takes any necessary action to ensure that each lien for which notice was not provided will be released on or before the thirtieth day after the date on which title to the property is transferred.
WARNING: ONE OR MORE RECORDED LIENS HAVE BEEN FILED THAT MAKE A CLAIM AGAINST THIS PROPERTY AS LISTED BELOW. IF A LIEN IS NOT RELEASED AND THE PROPERTY IS CONVEYED WITHOUT THE CONSENT OF THE LIENHOLDER, IT IS POSSIBLE THE LIENHOLDER COULD DEMAND FULL PAYMENT OF THE OUTSTANDING BALANCE OF THE LIEN IMMEDIATELY. YOU MAY WISH TO CONTACT EACH LIENHOLDER FOR FURTHER INFORMATION AND DISCUSS THIS MATTER WITH AN ATTORNEY.
Notice Regarding Sale Subject to a Recorded Lien
This notice is being provided pursuant to section 5.016 of the Texas Property Code.
Property: [identify the property]
Seller:
Seller’s Address:
Buyer:
Buyer’s Address:
[First] Recorded Lien
Lienholder:
Lienholder’s address:
Lienholder’s telephone number:
Amount of debt secured by this lien:
Interest rate:
Required periodic installments:
Account number:
Other terms:
Has lienholder consented to sale by Seller to Purchaser? ____Yes ____No
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If there is more than one lien, repeat above information for each additional lien and designate as “First Recorded Lien,” “Second Recorded Lien,” etc., as applicable. |
[First] Insurance Policy
Insurer:
Insured:
Amount for which property is insured:
Property insured:
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If there is more than one insurance policy, repeat above information for each additional policy and designate as “First Insurance Policy,” “Second Insurance Policy,” etc., as applicable. |
Amount of Any Property Taxes Due on Property:
[Name of seller]
Date:
[Name of buyer]
Date: