Executory Contracts in Texas

Contract for Deed – Texas

Before using these forms, please read the sections of the Property Code dealing with Executory Contracts (Contracts for Deed)

Sections 5.061 through 5.080

http://www.statutes.legis.state.tx.us/SOTWDocs/PR/htm/PR.5.htm#5.061

CONTRACT FOR DEED

THIS DAY this agreement is entered into by and between hereinafter referred to as "SELLER", whether one or more, and hereinafter referred to as "PURCHASER", whether one or more, on the terms and conditions and for the purposes hereinafter set forth:

1. SALE OF PROPERTY

For and in consideration of TEN DOLLARS ($10.00) and other good and valuable considerations the receipt and sufficiency of which is hereby acknowledged, Seller does hereby agree to convey, sell, assign, transfer and set over unto Purchaser, the following property situated in County, State of Texas, said property being described as follows:

Together with all rights of ownership associated with the property, including, but not limited to, all easements and rights benefiting the premises, whether or not such easements and rights are of record, and all tenements, hereditaments, improvements and appurtenances, including all lighting fixtures, plumbing fixtures, shades, venetian blinds, curtain rods, storm windows, storm doors, screens, awnings, if any, and now on the premises.

SUBJECT TO all recorded easements, rights-of-way, conditions, encumbrances and limitations and to all applicable building and use restrictions, zoning laws and ordinances, if any, affecting the property.

2. PURCHASE PRICE AND TERMS

The purchase price of the property shall be $ . The purchaser does hereby agree to pay to the order of the Seller the sum of Dollars ($ ) upon execution of this agreement, with the balance of $ being due and payable as follows:

(a) Balance payable in ( ) monthly installments of Dollars ($ ) each, with the first installment being due and payable on the day of , and a like payment on the first day of each month thereafter until the day of , , when the final payment shall be due. No interest.

(b) Balance payable, together with interest on the whole sum that shall be from time to time unpaid at the rate of per cent, per annum, payable in the amount of $ dollars per month beginning on the day of , and continuing on the same day of each month thereafter until fully paid.

(c) Balance payable, together with interest on the whole sum that shall be from time to time unpaid at the rate of per cent, per annum, payable in the amount of dollars per month beginning on the day of , , and continuing on the same day of each month thereafter until the day of , , when all remaining principal and interest shall be paid. (Balloon payment)

3. TIME OF THE ESSENCE

Time is of the essence in the performance of each and every term and provision in this agreement by Purchaser.

4. SECURITY

This contract shall stand as security of the payment of the obligations of Purchaser.

5. MAINTENANCE OF IMPROVEMENTS

Except as permitted by law, all improvements on the property, including, but not limited to, buildings, trees or other improvements now on the premises, or hereafter made or placed thereon, shall be a part of the security for the performance of this contract and shall not be removed therefrom. Purchaser shall not commit, or suffer any other person to commit, any waste or damage to said premises or the appurtenances and shall keep the premises and all improvements in as good condition as they are now.

6. CONDITION OF IMPROVEMENTS

Purchaser agrees that the Seller has not made, nor makes any representations or warranties as to the condition of the premises, the condition of the buildings, appurtenances and fixtures locate thereon, and/or the location of the boundaries. Purchaser accepts the property in its "as-is" condition without warranty of any kind. The required Property Disclosure Statement is attached hereto as “Exhibit A”, which form was provided to the Purchaser before execution of this agreement.

7. POSSESSION OF PROPERTY

Purchaser shall take possession of the property and all improvements thereon upon execution of this contract and shall continue in the peaceful enjoyment of the property so long as all payments due under the terms of this contract are timely made. Purchaser agrees to keep the property in a good state of repair and in the event of termination of this contract, Purchaser agrees to return the property to Seller in substantially the same condition as it now exists, ordinary wear and tear excepted. Seller reserves the right to inspect the property at any time with or without notice to Purchaser.

8. TAXES, INSURANCE AND ASSESSMENTS

Taxes and Assessments: During the term of this contract:

(a) Purchaser shall pay all taxes and assessments levied against the property.

(b) Seller shall pay all taxes and assessments levied against the property. In the event that Seller pays the taxes and insurance, Purchaser shall reimburse Seller for same upon 30 days notice to purchaser.

Content Insurance: Purchaser shall be solely responsible for obtaining insurance of the contents, insuring contents owned by Purchaser. Seller shall be solely responsible for obtaining insurance on all contents owned by Seller.

Liability and Hazard Insurance: Liability insurance shall be maintained by Purchaser during the term of this contract naming Seller as an additional insured, in the amount of not less than $ .

Fire, Hazard and Windstorm insurance: Fire, hazard and windstorm insurance shall be maintained as follows:

(a) Purchaser shall obtain fire, hazard and windstorm insurance in the amount not less than $ , on a policy of insurance naming Seller as additional insured.

(b) Seller shall obtain and pay for hazard, fire and windstorm insurance in an amount not less than $ . In the event Seller elects this option, Purchaser shall repay the amount so paid by Seller within thirty (30) days of demand for same by Seller.

Should the Purchaser fail to pay any tax or assessment, or installment thereof, when due, or keep said buildings insured, Seller may pay the same and have the buildings insured, and the amounts thus expended shall be a lien on said premises and may be added to the balance then unpaid, or collected by Seller, in the discretion if Seller with interest until paid at the rate of the per cent per annum.

In case of any damage as a result of which said insurance proceeds are available, the Purchaser may, within sixty (60) days of said loss or damage, give to the Seller written notice of Purchaser’s election to repair or rebuild the damaged parts of the premises, in which event said insurance proceeds shall be used for such purpose. The balance of said proceeds, if any, which remain after completion of said repairing or rebuilding, or all of said insurance proceeds if the Purchaser elects not to repair or rebuild, shall be applied first toward the satisfaction of any existing defaults under the terms of this contract, and then as a prepayment upon the principal balance owing. No such prepayment shall defer the time for payment of any remaining payments required by said contract. Any surplus of said proceeds in excess of the balance owing hereon shall be paid to the Purchaser.

9. DEFAULT

If the Purchaser shall fail to perform any of the covenants or conditions contained in this contract on or before the date on which the performance is required, the Seller shall give Purchaser notice of default or performance, stating the Purchaser is allowed thirty (30) days from the date the notice is made (mailed) to cure the default or performance. In the event the default or failure of performance is not cured within the 30 day time period, then Seller shall have the remedies as provided in the Texas Laws and the Texas Property Code, Sections 5.061 et seq., which include rescission and forfeiture, and all sums due shall be accelerated and become immediately due.

Except as otherwise provided by the Texas Property Code, in the event of default and termination of the contract by Seller, Purchaser shall forfeit any and all payments made under the terms of this contract including taxes and assessments as liquidated damages, Seller shall be entitled to recover possession of the property and such other damages as they may be due which are caused by the acts or negligence of Purchaser.

The parties expressly agree that in the event of default not cured by the Purchaser and termination of this agreement, and Purchaser fails to vacate the premises, Seller shall have the right to obtain possession by appropriate court action.

10. DEED AND EVIDENCE OF TITLE

Upon total payment of the purchase price and any and all late charges, and other amounts due Seller, Seller agrees to deliver to Purchaser a Deed to the subject property, at Seller’s expense, free and clear of any liens or encumbrances other than taxes and assessments for the current year. The deed shall be recorded by Seller within thirty (30) days of receiving final payment from the Purchaser in accordance with the Texas Property Code.

11. NOTICES

All notices required hereunder shall be deemed to have been made when deposited in the U. S. Mail, postage prepaid, certified, return receipt requested, to the Purchaser or Seller at the addresses listed below. All notices required hereunder may be sent to:

Seller(s):

Purchaser(s):

and when mailed, postage prepaid, to said address, shall be binding and conclusively presumed to be served upon said parties respectively. Notice of Default shall be made by registered or certified mail postage prepaid, return receipt requested.

12. ASSIGNMENT OR SALE

Purchaser shall not sell, assign, transfer or convey any interest in the subject property or this agreement, without first securing the written consent of the Seller. However, the Purchaser shall have the right to obtain a loan for the purposes allowed by the Texas Property Code, Sections 5.016, and mortgage Purchaser’s interest in the property for such purposes.

13. PREPAYMENT

Purchaser to have the right to prepay, without penalty, the whole or any part of the balance remaining unpaid on this contract at any time before the due date.

14. ATTORNEY FEES

In the event of default, Purchaser shall pay to Seller, Seller's reasonable and actual attorneys' fees and expenses incurred by Seller in enforcement of any rights of Seller. All attorney fees shall be payable prior to Purchaser's being deemed to have corrected any such default.

15. LATE PAYMENT CHARGES

If Purchaser shall fail to pay, within fifteen (15) days after due date, any installment due hereunder, Purchaser shall be required to pay an additional charge of five (5%) percent of the late installment. Such charge shall be paid to Seller at the time of payment of the past due installment.

16. CONVEYANCE OR MORTGAGE BY SELLER

Seller’s interest in the property is fee simple free from any liens or other encumbrances. The Seller agrees to maintain fee simple title free from any liens or other encumbrances to the property covered by this contract for the entire duration of this contract with the following exceptions.

The above paragraph does not apply to a lien or encumbrance placed on the property that is:

(1) Placed on the property because of the conduct of the purchaser;

(2) Agreed to by the purchaser as a condition of a loan obtained to place improvements on the property, including utility or fire protection improvements; or

(3) Placed on the property by the seller prior to the execution of the contract in exchange for a loan used only to purchase the property if:

(A) The seller, not later than the third day before the date the contract is executed, notifies the purchaser in a separate written disclosure:

(i) Of the name, address, and phone number of the lienholder or, if applicable, servicer of the loan;

(ii) Of the loan number and outstanding balance of the loan;

(iii) Of the monthly payments due on the loan and the due date of those payments; and

(iv) In 14-point type that, if the seller fails to make timely payments to the lienholder, the lienholder may attempt to collect the debt by foreclosing on the lien and selling the property at a foreclosure sale;

(B) The lien:

(i) Is attached only to the property sold to the purchaser under the contract; and

(ii) Secures indebtedness that, at no time, is or will be greater in amount than the amount of the total outstanding balance owed by the purchaser under the executory contract;

(C) The lienholder:

(i) Does not prohibit the property from being encumbered by an executory contract; and

(ii) Consents to verify the status of the loan on request of the purchaser and to accept payments directly from the purchaser if the seller defaults on the loan.

Seller further covenants, with regard to any lien or other encumbrance placed on the property as provided above, that:

A. Seller agrees to make timely payments on the loan and to give monthly statements to the purchaser reflecting the amount paid to the lienholder, the date the lienholder receives the payment, and the information described by Paragraph (A);

B. Seller agrees that Seller shall, not later than the third day after the Seller receives or has actual knowledge of a document or an event establishing a lien or other encumbrance on the property, to notify the purchaser in writing in 14-point type that the seller has been sent a notice of default, notice of acceleration, or notice, of foreclosure or has been sued in connection with a lien on the property and to attach a copy of all related documents received to the written notice; and

C. Seller further warrants that if the Seller does not make timely payments on the loan or any other indebtedness secured by the property, the purchaser may, without notice, cure any deficiency with a lienholder directly and deduct from the total outstanding balance owed by the purchaser under the executory contract, without the necessity of judicial action, 150 percent of any amount paid to the lienholder.

17. AMENDMENT – WAIVERS

This Agreement shall not be modified, or amended except by an instrument in writing signed by all parties.

No delay or failure on the part of any party hereto in exercising any right, power or privilege under this Agreement or under any other documents furnished in connection with or pursuant to this Agreement shall impair any such right, power or privilege or be construed as a waiver of any default or any acquiescence therein. No single or partial exercise of any such right, power or privilege shall preclude the further exercise of such right, power or privilege, or the exercise of any other right, power or privilege. No waiver shall be valid against any party hereto unless made in writing and signed by the party against whom enforcement of such waiver is sought and then only to the extent expressly specified therein.

18. SEVERABILITY

If any one or more of the provisions contained in this Agreement shall be held illegal or unenforceable by a court, no other provisions shall be affected by this holding. The parties intend that in the event one or more provisions of this agreement are declared invalid or unenforceable, the remaining provisions shall remain enforceable and this agreement shall be interpreted by a Court in favor of survival of all remaining provisions.

19. HEADINGS

Section headings contained in this Agreement are inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for any purpose, and shall not in any way define or affect the meaning, construction or scope of any of the provisions hereof.

20. PRONOUNS

All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular, or plural, as the identity of the person or entity may require. As used in this agreement: (1) words of the masculine gender shall mean and include corresponding neuter words or words of the feminine gender, (2) words in the singular shall mean and include the plural and vice versa, and (3) the word "may" gives sole discretion without any obligation to take any action.

21. JOINT AND SEVERAL LIABILITY

All Purchasers, if more than one, covenants and agrees that their obligations and liability shall be joint and several.

22. PURCHASER’S RIGHT TO REINSTATE AFTER ACCELERATION

If Purchaser defaults and the loan is accelerated, then Purchaser shall have the right of reinstatement as allowed under the laws of the State of Texas, provided that Purchaser: (a) pays Lender all sums which then would be due under this agreement as if no acceleration had occurred; (b) cures any default of any other covenants or agreements; and (c) pays all expenses incurred in enforcing this agreement, including, but not limited to, reasonable attorneys' fees, and other fees incurred for the purpose of protecting Seller's interest in the Property and rights under this agreement. Seller may require that Purchaser pay such reinstatement sums and expenses in one or more of the following forms, as selected by Seller: (a) cash, (b) money order, (c) certified check, bank check, treasurer’s check or cashier’s check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality or entity or (d) Electronic Funds Transfer. Upon reinstatement by Purchaser, this Security Instrument and obligations secured hereby shall remain fully effective as if no acceleration had occurred.

23. HEIRS AND ASSIGNS

This contract shall be binding upon and to the benefit of the heirs, administrators, executors, and assigns of the parties hereto. However, nothing herein shall authorize a transfer in violation of paragraph (12).

24. OTHER PROVISIONS

25. ENTIRE AGREEMENT

This Agreement embodies and constitutes the entire understanding between the parties with respect to the transactions contemplated herein. All prior or contemporaneous agreements, understandings, representations, oral or written, are merged into this Agreement.

THIS EXECUTORY CONTRACT REPRESENTS THE FINAL AGREEMENT BETWEEN THE SELLER AND PURCHASER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

YOU, THE PURCHASER, MAY CANCEL THIS CONTRACT AT ANY TIME DURING THE NEXT TWO WEEKS. THE DEADLINE FOR CANCELING THE CONTRACT IS . THE ATTACHED NOTICE OF CANCELLATION EXPLAINS THIS RIGHT.

WITNESS THE SIGNATURES of the Parties this the day of ,

Seller(s) Name and Address / Buyer(s) Name and Address