Texas Property Code 5.081 – Right to Convert Contract
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(a) A purchaser, at any time and without paying penalties or charges of any kind, is entitled to convert the purchaser’s interest in property under an executory contract into recorded, legal title in accordance with this section, regardless of whether the seller has recorded the executory contract.
(b) If the purchaser tenders to the seller an amount of money equal to the balance of the total amount owed by the purchaser to the seller under the executory contract, the seller shall transfer to the purchaser recorded, legal title of the property covered by the contract.
Terms Used In Texas Property Code 5.081
- Contract: A legal written agreement that becomes binding when signed.
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Property: means real and personal property. See Texas Government Code 311.005
- Trustee: A person or institution holding and administering property in trust.
- Written: includes any representation of words, letters, symbols, or figures. See Texas Government Code 311.005
(c) Subject to Subsection (d), if the purchaser delivers to the seller of property covered by an executory contract a promissory note that is equal in amount to the balance of the total amount owed by the purchaser to the seller under the contract and that contains the same interest rate, due dates, and late fees as the contract:
(1) the seller shall execute a deed containing any warranties required by the contract and conveying to the purchaser recorded, legal title of the property; and
(2) the purchaser shall simultaneously execute a deed of trust that:
(A) contains the same terms as the contract regarding the purchaser’s and seller’s duties concerning the property;
(B) secures the purchaser’s payment and performance under the promissory note and deed of trust; and
(C) conveys the property to the trustee, in trust, and confers on the trustee the power to sell the property if the purchaser defaults on the promissory note or the terms of the deed of trust.
(d) On or before the 10th day after the date the seller receives a promissory note under Subsection (c) that substantially complies with that subsection, the seller shall:
(1) deliver to the purchaser a written explanation that legally justifies why the seller refuses to convert the purchaser’s interest into recorded, legal title under Subsection (c); or
(2) communicate with the purchaser to schedule a mutually agreeable day and time to execute the deed and deed of trust under Subsection (c).
(e) A seller who violates this section is liable to the purchaser in the same manner and amount as a seller who violates § 5.079 is liable to a purchaser. This subsection does not limit or affect any other rights or remedies a purchaser has under other law.
(f) On the last date that all of the conveyances described by Subsections (b) and (c) are executed, the executory contract:
(1) is considered completed; and
(2) has no further effect.
(g) The appropriate use of forms published by the Texas Real Estate Commission for transactions described by this section constitutes compliance with this section.
(h) This section may not be construed to limit the purchaser’s interest in the property established by other law, if any, or any other rights of the purchaser under this subchapter.