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TX House Bill 4063

Legislation

State: Texas
Signed: June 20, 2025

Effective: September 01, 2025
Chapter: TBD

Summary

House Bill 4063 establishes rules for the execution of a unilateral memorandum of contract and a property owner’s affidavit to release the memorandum.

Affects

Adds Section 12.020 to the Texas Property Code.

Changes
  1. Defines "unilateral memorandum of contract" to mean a written document that is signed only by a person who is not an owner of the residential property and asserts that the person has entered into a contract with an owner of residential property for the purchase of an interest in the property, for an option to purchase an interest in the property, for a right of first refusal or first offer to purchase an interest in the property, or for a right to match any offer to purchase an interest in the property. The term does not include a deed or a document granting a right of first refusal pursuant to a condominium declaration.
  2. Sets out requirements for filing a memorandum of contract concerning residential property that is not signed by the property owner, including a requirement to notify the owner of the filing.
  3. Establishes procedures through which an owner may file an affidavit, which must be notarized, for the release of the memorandum.
Analysis

From the bill analysis of House Bill 4063: “The Texas Land Title Association (TLTA) asserts a memorandum of contract is used to put subsequent purchasers on constructive notice of the buyer's equitable title and ensure that the seller does not try to sell to another buyer. TLTA reports that sellers are often unaware that this notice has been filed and the issues surrounding the contract may be stale. What's more, TLTA reports instances in which the filer of the notice will extract payment unrelated to the terms of the contract to "simply go away," using the memorandum of contract as a form of "greenmail" to take advantage of the seller's duress in a property sale transaction.

“H.B. 4063 would address this issue by setting out requirements for filing a memorandum of contract concerning residential property that is not signed by the property owner, including a requirement to notify the owner of the filing, and establishing procedures through which an owner may file an affidavit for the release of the memorandum.”

Read House Bill 4063.

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