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Rent-to-Own Agreement Template – Texas
Prepare a Rent-to-Own Agreement in Texas with built-in purchase option terms for flexible property ownership.
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Rent-to-Own Agreement
This Rent-to-Own Agreement ("Agreement") is entered into on [Effective Date], by and between:
Seller/Landlord: [Full Legal Name], residing at [Address]
and
Buyer/Tenant: [Full Legal Name], residing at [Address]
Property Address: [Full Street Address, City, State, Zip]
1. Term and Option Framework
The Term begins [Start Date] and ends [End Date] unless ended earlier as allowed here. So long as the Agreement is in good standing, the Buyer/Tenant may exercise an option to purchase per the deadlines below. A mid‑term reconciliation will confirm rent credits and compliance.
2. Rent; Credits; Option Fee
Monthly rent is $[Rent Amount], due on the [Day]; $[Credit Amount] per month accrues as a conditional credit applied only at closing. An option fee of $[Option Fee] is paid on execution and is ☐ applied to price ☐ non‑refundable if no closing occurs. Late rent after [Grace Period] days may incur fees where lawful.
3. Purchase Price and Timelines
Purchase price is $[Price] or based on [Formula/Appraisal]. Notice of Exercise due by [Notice Deadline]; closing targeted for [Closing Deadline]. Time is of the essence for all option‑related dates.
4. Inspections; Condition; Disclosures
Inspections may be obtained within [Inspection Period] days and thereafter with reasonable notice. Seller/Landlord will share available disclosures and known material facts. Material findings over $[Threshold] trigger the remedy path described here: [Repair/Credit/Termination].
5. Maintenance Responsibilities
Buyer/Tenant handles routine upkeep and minor repairs up to $[Minor Cap] per incident. Seller/Landlord remains responsible for major systems/structure unless damage is caused by misuse. Alterations require prior written consent.
6. Insurance, Taxes, Utilities
Seller/Landlord maintains property insurance and taxes during the lease period unless otherwise written; Buyer/Tenant maintains renters liability insurance naming Seller/Landlord as additional interest. Utilities/HOA obligations are allocated as follows: [Allocation]. Proof of insurance must be provided upon request.
7. Financing; Lender Access; Closing
Buyer/Tenant is responsible for financing; Seller/Landlord will cooperate with appraisal and lender requests. At closing, option fee and accrued credits are applied to the price; title transfers by [Deed Type] free of undisclosed liens. Closing costs are allocated: Buyer/Tenant [List]; Seller/Landlord [List].
8. Default; Remedies
Material breach, non‑payment, or failure to maintain insurance constitutes default. Buyer/Tenant default may result in termination and retention of non‑refundable consideration where lawful. Seller/Landlord default allows Buyer/Tenant to pursue lawful remedies including credit preservation and return of option consideration.
9. Early Termination; Transfers
Any assignment/sublease requires written consent; early termination for hardship may be negotiated in good faith. Upon surrender, keys and devices must be returned and utilities settled. Security deposit handling (if any) is documented in an addendum.
10. Law; Entire Agreement; Notices
This Agreement is governed by [State] law and represents the entire understanding. Amendments must be written; notices delivered per Section [Notices]. Severability and non‑waiver apply.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
Seller/Landlord:
[Printed Name]
Signature: ______________________________
Date: ______________________________
Buyer/Tenant:
[Printed Name]
Signature: ______________________________
Date: ______________________________
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Rent-to-Own Agreement Template – Texas
Texas Rent-to-Own Agreement FAQ
Q: How to define minor vs. major repairs?
A: Use a clear dollar threshold for minor repairs handled by Buyer/Tenant and treat core systems/structure as major. Require written approvals for significant work. Keep receipts for review.
Q: What about property taxes during the Term?
A: State who pays and whether reassessment affects rent or price. If adjustments occur, document them in writing. Consider an escrow addendum if needed.
Q: Can the option fee reduce the price?
A: Yes if the Agreement provides; otherwise clarify it is non‑refundable. Explain outcomes if Seller/Landlord defaults. Tie application to successful closing.
Q: How is insurance handled?
A: Seller/Landlord keeps property coverage; Buyer/Tenant maintains renters liability. Lapses can constitute default. Provide certificates on request.
Q: What if appraisal comes in low?
A: Offer a quick renegotiation or termination path tied to lender denial. Clarify status of credits and fees. Set decision windows to avoid drift.
Q: Is subletting allowed?
A: Only with written consent and screening standards. Unauthorized subletting is a breach. Use a transfer addendum if permitted.
Q: What closing documents are typical?
A: Expect deed, HOA estoppel if applicable, and lender documents. Collect keys and manuals at closing. Schedule utility transfers ahead of time.
Q: Are there regional considerations?
A: Heat, hail, and long distances may influence inspections and maintenance plans. Rural systems like wells or septic may need specialized checks. Consider windstorm/flood risks where relevant.
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