Is it legal to do "Lease Option" contracts in Texas?

(Houston, TX)

JayJay Posted: 22 Nov 2009 05:40 PM

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I was doing some research on the internet on foreclosures and came across this audio. This guy was from Florida and he was talking about "Lease Options." He mentioned that it is illegal to do "Lease Options" in Texas. Is this true?

ian.douglas replied on 27 Nov 2009 09:44 PM

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Hi,

You may want to take a look at the following link: Texas Foreclosure Laws

I hope this helps

rsharga replied on 17 Dec 2009 05:34 PM

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There are a number of states which have recently passed legislation aimed at protecting distressed homeowners from "foreclosure prevention" scams, which often included lease option arrangements. In Illinois, you can be charged with a felony. In other cases, lease options are permitted, but with pretty severe restrictions.

I'm not sure about Texas specifically, but you can check these two websites to find a law firm that specializes in foreclosure processes. In each case you'll see a directory of firms, searchable by state. I'd strongly suggest contacting an attorney who specializes in foreclosure work.

USFN - www.usfn.org

The Legal League - www.dsnewsblackbook.com

Dallas/Fort Worth Realtor replied on 18 Dec 2009 08:53 PM

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It's amazing at how many people look for "lease option" "rent to own" properties.  The practice is allowed in Texas but all contracts have to be written by an attorney and the law is very ambiguous because my understanding is that the contract cannot be for more than 180 days etc. and has too many restrictions.

However, most people that are looking for these types of deals don't have the hefty downpayment usually requested by the sellers.  Eviction laws are also very tough in TX so they want to protect themselves/

Naima

Nashville Grant replied on 26 Dec 2009 09:04 AM

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It is not illegal to do a "lease option" or "rent to own" in any State if done under the guidance of an attorney licensed in that State. It is my guess that the audio you found was in regards to foreclosure scams that have become very prevalent in FL, Phoenix and Las Vegas. Some of these scams actually put you into an abandoned home or bank owned home without the knowledge of the true owner. The reason these scams work is because typically these "lease option" buyers are not savvy enough to do a title search/deed search to see if the scammer has true authority to write a contract on the property. Buyers feel like they are signing a lease rather than a purchase contract and are wooed by some slick marketing. These scammers have actually become quite good at this scam. I have seen operations where these guys will even conduct a “dry close”. Be very careful and always consult an attorney in matters of contracts and contract law.

* I am not an attorney and the above does not constitute legal advice or a recommendation of any kind.