Most tradable real estate forms used in Texas contain option clauses that can be claimed by paying a small option tax (usually non-refundable) to the seller. The payment of the option fee guarantees the buyer the right to terminate the contract within a specified period (the « option period ») is refunded for the serious money. When it comes to purchase and sale contracts, options are an invaluable tool to reduce a buyer`s risk. Sometimes a call option is tied to a lease agreement. In other situations, the option to purchase is part of a traditional real estate purchase agreement and is used to give a buyer time to assess the feasibility of closing the purchase. Of course, most rental options are people interested in housing and rent, and most tenants intend to live in the homes they buy, and most tenant buyers take more than six months to exercise their options. So most rental options will be subject to the law – at least a little. That`s the bad news. Many lease-to-purchase contracts contain vague lease-to-purchase provisions that look like purchase options but do not meet the legal definition developed by Texas court decisions.
For example, some lease-to-purchase agreements do not contain a fixed price. Instead, they stipulate that tenants can acquire the property at « market value » without indicating how « market value » could be determined. However, it is essential to keep in mind that these rental options for the sale of residential real estate are strictly regulated and that the legal penalties for improper sale of a home with a rental option are serious. You must respect the law until the letter of the law. According to the Texas court`s decisions, an option to purchase is a land contract whereby the owner grants another the right to purchase real estate at a fixed price within a specified time frame. Bryant v. Cady, 445 S.W.3d 815, 819 (Tex. App.-Texarkana 2014, no pet; Jarvis/ Peltier, 400 S.W.3d 644, 650 (Tex. App.-Tyler 2013, no pet; Faucette v.
Chantos, 322 S.W.3d 901, 907 (Tex. App.-Houston [14th Dist.] 2010, No. 488-488 pet.) ; Casa El Sol-Acapulco, S.A. – Zu Corp. v. Fontenot, 919 S.W.2d 709, 717 n.9 (Tex. App.-Houston [14th Dist.] 1996, writ dism`d); State v. Clevenger, 384 S.W.2d 207, 210 (Tex.