Perry Signs HB 1823 Into Law

He did not veto it as we had hoped he would.

Be very careful now if you intend to sell/lease with a lease/option in Texas.

Check out this link. Scroll down the list of bill he signed and you will find HB 1823 is there.

Does this new Law only affect L/O’s that are 3 years or older? I looked on the HoR’s web site for HB1823, and found the following as the “Enrolled Version” …

Specifically …

Section 2(f) “(f) Notwithstanding any other provision of this subchapter,
only the following sections apply to an executory contract
described by Subsection (a)(2) if the term of the contract is three
years or less and the purchaser and seller, or the purchaser’s or
seller’s assignee, agent, or affiliate, have not been parties to an
executory contract to purchase the property covered by the
executory contract for longer than three years:
(1) Sections 5.063-5.065;
(2) Section 5.073, except for Section 5.073(a)(2); and
(3) Sections 5.083 and 5.085.”

I heard that they removed the 3 year language late in the game, making term not an issue.

I hope that’s incorrect.

Can anyone confirm?

To be honest, I don’t know either, but I’ve heard from some reputable sources that say the “Enrolled Version” of the bill is the one the Governor signed (and the one I linked to above). The sources also said that a lot of people are erroneously emailing others to say the bill that was signed, does not have the 3-yr clause in it.

I wish someone had something definate in writing. I may email Governor Perry’s office to get clarification (or, at least, a link to the now LAW).

BTW, if you view the history of the bill, it shows no modification from the point it was enrolled to the point the governor signed it. This tells me that the version signed into law HAS the 3-yr clause in it.

Hope you’re right.

The law is definitely worse than we anticipated.


It is the enrolled version which will be the law. Certain sections in Chap. 5 of the Property Code will clearly apply to lease option contracts entered into on or after Jan 1, 2006, regardless of their length. Shorter term contracts have fewer provisions, but there is no absolute exclusion as some versions of the bill had. Here is a link to the bill as signed:

You should consult with an attorney for legal advice as this post is not intended to be legal advice.