Contract for Deed (Land Contract)

CONTRACT FOR DEED (EXECUTORY CONTRACT FOR CONVEYANCE)

(Texas)

TABLE OF CONTENTS

1. Document Header and Parties
2. Definitions
3. Property; Legal Description
4. Purchase Price; Down Payment; Installment Terms
5. Interest; Amortization; Balloon; Prepayment
6. Legal Title; Delivery of Deed at Payoff (§ 5.079)
7. Possession; Taxes, Insurance, and Maintenance
8. Recording (§ 5.076); Buyer's Right to Convert (§ 5.081)
9. Default and Remedies (§§ 5.063–5.066)
10. Title; Fee Simple Required (§ 5.085); Title Insurance
11. Risk of Loss; Condemnation
12. Assignment; Due-on-Sale (Garn–St. Germain)
13. Mandatory Disclosures (§§ 5.069–5.071); Lead-Based Paint
14. Buyer's Right to Cancel Within 14 Days (§ 5.074)
15. Annual Accounting Statement (§ 5.077)
16. General Provisions
17. Execution; Notarial Acknowledgment
18. Exhibits and Schedules

1. DOCUMENT HEADER AND PARTIES

This Contract for Deed (an "executory contract for conveyance of real property" under Tex. Prop. Code Subchapter D, this "Contract") is made as of [__/__/____] (the "Effective Date") by and between:

a. Seller: [SELLER LEGAL NAME], a [STATE] [ENTITY TYPE OR "individual"], whose address is [SELLER ADDRESS] ("Seller"); and

b. Buyer / Purchaser: [BUYER LEGAL NAME], a [STATE] [ENTITY TYPE OR "individual"], whose address is [BUYER ADDRESS] ("Buyer" or "Purchaser").

Seller and Buyer are each a "Party" and collectively the "Parties."

Recitals

A. Seller is the fee simple owner of the real property described in Exhibit A (the "Property").

B. Buyer desires to purchase the Property as Buyer's residence (or the residence of a relative within the second degree) on an installment basis under which Seller retains legal title as security until the Purchase Price is paid in full.

C. The Parties acknowledge this is an executory contract governed by Tex. Prop. Code §§ 5.061–5.085 and that Seller must satisfy the mandatory disclosure, recording, accounting, notice, and title obligations of Subchapter D.

NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the Parties agree as follows:

2. DEFINITIONS

"Business Day" – any day other than Saturday, Sunday, or a day on which Texas banks are authorized or required to close.

"Default" – under Tex. Prop. Code § 5.061, the failure to (1) make a timely payment, or (2) comply with a term of this Contract.

"Deed" – a [SELECT: General Warranty Deed / Special Warranty Deed] in recordable form conveying the Property to Buyer subject only to the Permitted Exceptions.

"Equity Protection Threshold" – the point at which Buyer has paid 40% or more of the amount due or the equivalent of 48 monthly payments, or the contract has been recorded, after which § 5.066 governs (see Section 9).

"Permitted Exceptions" – the matters listed in Exhibit B.

"Purchase Price" – the amount set forth in Section 4.1.

"Unpaid Balance" – the principal portion of the Purchase Price remaining unpaid, together with accrued interest and other charges.

3. PROPERTY; LEGAL DESCRIPTION

3.1 Property. Seller agrees to sell and Buyer agrees to buy the real property located at [PROPERTY ADDRESS], [CITY], [COUNTY] County, Texas, legally described in Exhibit A, together with all improvements, fixtures, easements, and appurtenances.

3.2 Personal Property Included. The following personal property is included, free of liens: [LIST OR "None"].

3.3 Residential Use. The Property is used or will be used as the residence of Buyer or a relative of Buyer within the second degree by consanguinity or affinity (Tex. Prop. Code § 5.062(a)).

4. PURCHASE PRICE; DOWN PAYMENT; INSTALLMENT TERMS

4.1 Purchase Price. The total Purchase Price is $[____________].

4.2 Down Payment. Buyer shall pay a down payment of $[____________] on or before [__/__/____].

4.3 Financed Amount. The amount financed (Purchase Price less down payment) is $[____________] (the "Financed Amount").

4.4 Installment Payments. Buyer shall pay the Financed Amount, with interest, in installments as follows:

4.5 Application of Payments. Payments are applied first to late charges and costs, then to accrued interest, then to principal.

4.6 Maximum Lawful Rate. No provision shall require interest exceeding the maximum permitted by Texas law (Tex. Fin. Code); any excess shall be applied to principal or refunded.

5. INTEREST; AMORTIZATION; BALLOON; PREPAYMENT

5.1 Interest. Interest accrues on the Unpaid Balance at the rate stated in Section 4.4 from the Effective Date.

5.2 Balloon Disclosure. [IF APPLICABLE] THIS CONTRACT CONTAINS A BALLOON PAYMENT. A SUBSTANTIAL FINAL PAYMENT OF $[__________] WILL BE DUE ON [__/__/____]. BUYER MAY NEED TO REFINANCE OR OBTAIN OTHER FUNDS TO PAY THE BALLOON.

5.3 Prepayment. Buyer may prepay all or part of the Unpaid Balance at any time [SELECT: without penalty / subject to a prepayment charge of [____]%]. Partial prepayments are applied to principal.

5.4 Financing-Terms Disclosure (§ 5.071). The financing terms required to be disclosed under Tex. Prop. Code § 5.071 (purchase price, interest rate, number/amount/due dates of payments, late-charge/interest terms) are set out in this Contract and Exhibit F.

6. LEGAL TITLE; DELIVERY OF DEED AT PAYOFF (§ 5.079)

6.1 Retention of Legal Title. Seller retains legal title to the Property as security until Buyer has paid the Purchase Price and performed all obligations in full. Buyer holds equitable title and the right of possession.

6.2 Deed Within 30 Days of Payoff (§ 5.079). Under Tex. Prop. Code § 5.079, on or before the 30th day after Seller receives Buyer's final payment due under this Contract, Seller shall transfer recorded, legal title to Buyer by a recordable deed and deliver any other documents necessary to transfer title. Failure to comply subjects Seller to statutory liquidated damages and attorney's fees.

7. POSSESSION; TAXES, INSURANCE, AND MAINTENANCE

7.1 Possession. Buyer is entitled to possession on [__/__/____].

7.2 Taxes and Assessments. Buyer shall pay, before delinquency, all real property taxes and assessments accruing on or after the possession date.

7.3 Insurance. Buyer shall keep the improvements insured against fire and other casualty for not less than [SELECT: replacement cost / the Unpaid Balance], naming Seller as an additional insured / loss payee as its interest appears.

7.4 Maintenance. Buyer shall maintain the Property in good repair, commit no waste, and comply with all laws and any property-owners' association requirements.

8. RECORDING (§ 5.076); BUYER'S RIGHT TO CONVERT (§ 5.081)

8.1 Seller's Duty to Record Within 30 Days (§ 5.076). Under Tex. Prop. Code § 5.076, Seller shall record this Contract (including the § 5.069 disclosure statement) with the county clerk of [COUNTY] County on or before the 30th day after the date this Contract is executed. A seller who violates § 5.076 is liable to the Purchaser as provided in § 5.079 (capped at $500 for each calendar year of noncompliance), without limiting the Purchaser's other rights.

8.2 Buyer's Right to Convert to Recorded Title (§ 5.081). Under Tex. Prop. Code § 5.081, the Purchaser may at any time and without paying penalties or charges of any kind, convert the Purchaser's interest into recorded, legal title to the Property; if a lien remains, Seller and Buyer may execute a deed and a deed of trust or other security instrument for the unpaid balance. Seller shall provide the conversion documents within the statutory period after request.

8.3 No Encumbrance by Seller. Seller shall not further encumber or convey the Property in a manner impairing Buyer's interest, and shall apply Buyer's payments to keep any underlying loan current (see Section 12.3).

9. DEFAULT AND REMEDIES (§§ 5.063–5.066)

9.1 Events of Default (§ 5.061). Buyer is in default upon failure to make a timely payment or to comply with a term of this Contract.

9.2 Notice of Default and 30-Day Cure (§§ 5.063–5.065). Before enforcing rescission or forfeiture-and-acceleration, Seller must give the Purchaser written notice by registered or certified mail, return receipt requested, that is conspicuous and printed in 14-point boldface type or 14-point uppercase typewritten letters, including on a separate page the statutory statement:

NOTICE
YOU ARE NOT COMPLYING WITH THE TERMS OF THE CONTRACT TO BUY YOUR PROPERTY. UNLESS YOU TAKE THE ACTION SPECIFIED IN THIS NOTICE BY (date) THE SELLER HAS THE RIGHT TO TAKE POSSESSION OF YOUR PROPERTY.

The notice must identify the remedy Seller intends to enforce, itemize the delinquent amount (principal/interest), list any late charges or attorney's fees, and state the period to which the delinquency relates (§ 5.063). The Purchaser has at least 30 days after notice is given to cure the default (§ 5.065). Seller may enforce rescission or forfeiture-and-acceleration only if the Purchaser fails to cure, § 5.066 does not apply, and the contract has not been recorded (§ 5.064).

9.3 EQUITY PROTECTION — POWER OF SALE AFTER 40% / 48 PAYMENTS / RECORDING (§ 5.066). The Parties acknowledge that under Tex. Prop. Code § 5.066, if the Purchaser defaults after the Purchaser has paid 40% or more of the amount due or the equivalent of 48 monthly payments, OR — regardless of the amount paid — the contract has been recorded, then:
a. Seller MAY NOT enforce rescission or forfeiture-and-acceleration;
b. Seller is instead granted a power to sell the Purchaser's interest through a trustee, after giving the Purchaser notice as prescribed by § 5.063 (with the substitute § 5.066(b) statement) and at least 60 days to cure;
c. The trustee's sale must be conducted as prescribed by Tex. Prop. Code § 51.002 (Texas non-judicial foreclosure procedure);
d. Surplus proceeds above the Unpaid Balance must be paid to the Purchaser; any deficiency is subject to §§ 51.003–51.005 unless waived.

9.4 Forfeiture Only Below Threshold (§ 5.066(g)). If the Purchaser defaults before paying 40% / 48 monthly payments and the contract is not recorded, Seller may enforce rescission or forfeiture-and-acceleration only after complying with the § 5.063 and § 5.064 notice requirements.

9.5 DTPA Exposure. The Parties acknowledge that Seller's failure to comply with Subchapter D may be a false, misleading, or deceptive act actionable under the Texas Deceptive Trade Practices Act (Tex. Bus. & Com. Code § 17.41 et seq.), exposing Seller to treble damages and attorney's fees, and may entitle Buyer to cancel and rescind.

9.6 Cumulative Remedies; Attorneys' Fees. Remedies are cumulative to the extent permitted by Subchapter D. The prevailing Party in any enforcement action is entitled to reasonable attorneys' fees and costs.

10. TITLE; FEE SIMPLE REQUIRED (§ 5.085); TITLE INSURANCE

10.1 Fee Simple Title Required (§ 5.085). Under Tex. Prop. Code § 5.085, Seller may not execute this Contract unless Seller owns the Property in fee simple, free of any liens or encumbrances, except for limited exceptions (e.g., a lien Seller is obligated to and does pay off, certain tax/assessment liens). Seller must maintain fee simple title during the term and may not encumber the Property with a lien the Purchaser cannot satisfy from proceeds.

10.2 Title Insurance. [SELECT: Seller / Buyer] shall provide, at [ITS] expense, an owner's title insurance commitment from [TITLE COMPANY] and an owner's policy issued to Buyer at title transfer.

11. RISK OF LOSS; CONDEMNATION

11.1 Risk of Loss. From the possession date, risk of loss passes to Buyer. Insurance proceeds shall be applied, subject to Seller's security interest and § 5.078, to restoration or to the Unpaid Balance.

11.2 Condemnation. Any condemnation award shall be applied first to the Unpaid Balance, with the balance to Buyer, unless the Parties agree to restoration.

12. ASSIGNMENT; DUE-ON-SALE (GARN–ST. GERMAIN)

12.1 Assignment by Buyer. Buyer may not assign this Contract without Seller's prior written consent, which shall not be unreasonably withheld.

12.2 Assignment by Seller. Seller may assign its rights to payment subject to Buyer's rights hereunder.

12.3 Due-on-Sale Warning (Garn–St. Germain). If the Property is subject to an existing mortgage or deed of trust, entering into this Contract may trigger a "due-on-sale" clause permitting the lender to accelerate under the federal Garn–St. Germain Depository Institutions Act (12 U.S.C. § 1701j-3). Note that § 5.085's fee-simple requirement substantially limits the use of CFDs where an underlying lien exists. Seller represents that [SELECT: there is no underlying loan / the lender has consented / Seller will pay off the lien].

13. MANDATORY DISCLOSURES (§§ 5.069–5.071); LEAD-BASED PAINT

13.1 Property Condition Disclosure (§ 5.069). Before this Contract is signed, Seller has provided the Purchaser with: a survey (no older than one year) or current plat; copies of liens, restrictive covenants, and easements; a written notice of the Property's condition executed by both Parties; and, if applicable, disclosures regarding utilities/unrecorded subdivision. See Exhibit E.

13.2 Tax and Insurance Disclosure (§ 5.070). Before signing, Seller has provided a tax certificate from each taxing unit and a copy of any insurance policy/binder showing insurer, insured, property description, and policy amount.

13.3 Financing-Terms Disclosure (§ 5.071). Before signing, Seller has provided the written disclosure of financing terms required by § 5.071. See Exhibit F.

13.4 Lead-Based Paint (Pre-1978 Housing). If the dwelling was built before 1978, federal law (42 U.S.C. § 4852d) requires Seller to disclose known lead-based paint and hazards, provide records, deliver the EPA pamphlet, and allow a 10-day inspection opportunity. See Exhibit D. ☐ Not applicable (built 1978 or later).

13.5 Writing Required (§ 5.072). This Contract is in writing and signed by the Parties; oral executory contracts are unenforceable, and any promise not in this writing is not enforceable.

14. BUYER'S RIGHT TO CANCEL WITHIN 14 DAYS (§ 5.074)

14.1 14-Day Right to Cancel. Under Tex. Prop. Code § 5.074, the Purchaser may cancel and rescind this Contract for any reason by delivering signed, written notice to Seller by certified or registered mail (return receipt requested) or in person not later than the 14th day after the date this Contract is signed. If the Purchaser cancels, Seller shall, not later than the 10th day after Seller receives the cancellation notice, return to the Purchaser all payments made and any property traded in. A notice-of-cancellation form is provided to the Purchaser at signing.

15. ANNUAL ACCOUNTING STATEMENT (§ 5.077)

15.1 Annual Statement. Under Tex. Prop. Code § 5.077, Seller shall provide the Purchaser an annual statement in January of each year for the term of this Contract; if mailed, it must be postmarked not later than January 31. The statement must include: (1) amount paid under the contract; (2) remaining amount owed; (3) number of payments remaining; (4) amounts paid to taxing authorities on the Purchaser's behalf (if collected by Seller); (5) amounts paid to insure the Property on the Purchaser's behalf (if collected by Seller); (6) any accounting of insurance proceeds applied to the Property; and (7) a copy of current insurance evidence if coverage changed.

15.2 Penalties. A seller conducting fewer than two transactions in a 12-month period who fails to comply is liable for $100 liquidated damages per missed annual statement plus reasonable attorney's fees. A seller conducting two or more transactions in a 12-month period is liable for $250 per day after January 31 (capped at the Property's fair market value) plus reasonable attorney's fees.

16. GENERAL PROVISIONS

16.1 Governing Law. This Contract is governed by the laws of the State of Texas, including Tex. Prop. Code Subchapter D.

16.2 Forum. Exclusive venue lies in the state courts in [COUNTY] County, Texas.

16.3 Foreign Language (§ 5.068). If this Contract was negotiated primarily in a language other than English, Seller shall provide a copy in that language as required by § 5.068.

16.4 Prohibited Waivers (§ 5.073). No provision of this Contract waives any right or protection conferred on the Purchaser by Subchapter D; any such purported waiver is void.

16.5 Notices. Notices shall be in writing and delivered as required by Subchapter D and otherwise by hand, certified mail (return receipt requested), or nationally recognized overnight courier.

16.6 Entire Agreement; Amendment. This Contract and its Exhibits are the entire agreement and may be amended only in a writing signed by both Parties.

16.7 Severability. If any provision is held invalid, the remainder shall remain enforceable.

16.8 Counterparts; Electronic Signatures. This Contract may be executed in counterparts and by electronic signature.

17. EXECUTION; NOTARIAL ACKNOWLEDGMENT

IN WITNESS WHEREOF, the Parties have executed this Contract as of the Effective Date.

SELLER:
________________________________________
[SELLER NAME]
Date: [__/__/____]

BUYER / PURCHASER:
________________________________________
[BUYER NAME]
Date: [__/__/____]

Notary Acknowledgment

STATE OF TEXAS
COUNTY OF [____________]

This instrument was acknowledged before me on the [____] day of [MONTH], [YEAR], by [NAME(S)].

________________________________________
Notary Public, State of Texas
My Commission Expires: ___________
[SEAL]

18. EXHIBITS AND SCHEDULES

• Exhibit A – Legal Description of the Property
• Exhibit B – Permitted Exceptions
• Exhibit C – Lead-Based Paint Disclosure (pre-1978 housing)
• Exhibit D – Notice of Cancellation Form (§ 5.074)
• Exhibit E – Seller's Disclosure of Property Condition (§ 5.069), Survey/Plat, Liens/Covenants/Easements
• Exhibit F – Disclosure of Financing Terms (§ 5.071); Tax Certificates and Insurance Evidence (§ 5.070)
• Schedule 1 – Amortization Schedule

Sources and References

• Tex. Prop. Code Subchapter D (Executory Contract for Conveyance), §§ 5.061–5.087 — https://law.justia.com/codes/texas/property-code/title-2/chapter-5/subchapter-d/
• Tex. Prop. Code § 5.063 (Notice) — https://codes.findlaw.com/tx/property-code/prop-sect-5-063/
• Tex. Prop. Code § 5.064 (Seller's Remedies on Default) — https://codes.findlaw.com/tx/property-code/prop-sect-5-064/
• Tex. Prop. Code § 5.066 (Equity Protection; Sale of Property) — https://codes.findlaw.com/tx/property-code/prop-sect-5-066/
• Tex. Prop. Code § 5.076 (Recording Requirements) — https://codes.findlaw.com/tx/property-code/prop-sect-5-076/
• Tex. Prop. Code § 5.077 (Annual Accounting Statement) — https://codes.findlaw.com/tx/property-code/prop-sect-5-077/
• TexasLawHelp — Executory Contracts and Lease-to-Own — https://texaslawhelp.org/article/executory-contracts-and-lease-to-own-real-estate
• Garn–St. Germain Act, 12 U.S.C. § 1701j-3 — https://www.law.cornell.edu/uscode/text/12/1701j-3
• Lead-Based Paint, 42 U.S.C. § 4852d — https://www.law.cornell.edu/uscode/text/42/4852d