Texas Contracts for Deed MUST Be Recorded

Many times, Sellers of real property under Texas Contracts for Deed hold those contracts "in pocket." The logic for this is that the Seller might default, in which instance no conveyance will take place. Thus, the thought goes, "why complicate the title chain by recording documents, when no conveyance has occurred?" In all honesty, this logic makes sense. Unfortunately, however, it flies in the face of the Recording Requirements prescribed by the Texas Property Code.

Section 5.076 requires that the Seller records the Contract for Deed (and the attached disclosure statement) with the County Clerk of the County in which the property is located WITHIN 30 DAYS AFTER THE CONTRACT IS EXECUTED.

Although the statute does not expressly provide a remedy for failure to record the Contract for Deed, it is likely that a recovery might be had under Texas law if the Buyer can demonstrate that he has been damaged as the result of the Seller's failure.