Can I Sell a House With Tenants in Texas?

What happens to the lease when the house changes hands

A sale transfers your side of the lease. It does not cancel the tenant’s side. Texas does not have one tidy section that says so in those words, but the whole structure of the law is built on it, and three provisions show it plainly.

The first is Property Code Section 92.105(a): if the owner’s interest in the premises is terminated “by sale, assignment, death, appointment of a receiver, bankruptcy, or otherwise, the new owner is liable for the return of security deposits according to this subchapter from the date title to the premises is acquired.” A statute that makes the buyer responsible for the tenant’s deposit is a statute that assumes the tenancy is still there after closing.

The second is Section 24.005(b), which deals with notice to vacate. It gives a 30-day written notice route to a purchaser who buys “at a tax foreclosure sale or a trustee’s foreclosure sale under a lien superior to the tenant’s lease,” and then only where that purchaser chooses not to continue the lease and the tenant has timely paid rent and is not otherwise in default. An ordinary buyer in an ordinary sale gets no such route, because an ordinary sale does not disturb the lease in the first place.

The third is the contract itself. The promulgated TREC resale contract has a whole paragraph for leases and a dedicated addendum for residential ones, and the addendum’s two options are “terminate by closing” or “assign and assume.” There is no third option in which the lease simply evaporates at funding.

One more thing is worth knowing before you plan anything around your lease: Section 92.006(a) says a landlord’s duties and a tenant’s remedies concerning security deposits, security devices, disclosure of ownership and management, and utility cutoffs “may not be waived.” You and your tenant cannot sign your way out of those four, however cooperative everyone is feeling.

The security deposit is the part that follows the title

Deposits are where tenant-occupied sales most often cost a seller real money, usually months after closing, and usually because nobody reconciled a number.

Start with what a deposit is. Section 92.102 defines it as any advance of money, other than a rental application deposit or an advance payment of rent, intended primarily to secure performance under a lease. A pet deposit is in. Last month’s rent paid in advance is not a deposit, it is prepaid rent, and the two get transferred and accounted for differently.

Then the mechanics of the handover. Section 92.105(b) requires the new owner to deliver the tenant a signed statement acknowledging that the new owner has acquired the property, is responsible for the deposit, and specifying “the exact dollar amount of the deposit.” Subsection (b-1) is the one that should make you careful: the person who no longer owns the property stays liable for a deposit received while they owned it “until the new owner has received the deposit or has assumed the liability for the deposit, unless otherwise specified by the parties in a written contract.” In other words, your liability does not end at closing because you meant to transfer the money. It ends when the money or the liability actually moved, in writing.

Note the carve-out in Section 92.105(c): subsection (a) does not apply to a mortgage lienholder who acquires title by foreclosure. That matters if you are weighing a sale against letting the house go, and it is one of the differences covered on our page about facing foreclosure in Bell County.

If instead the tenancy ends before or around your sale, the refund rules are strict and the penalties are not small. Section 92.103(a) gives the landlord 30 days after the tenant surrenders the premises to refund the deposit. Section 92.104(a) allows deductions for damages and charges the tenant is legally liable for, (b) forbids retaining anything for normal wear and tear, and (c) requires the balance plus “a written description and itemized list of all deductions” unless the tenant owes rent at surrender and there is no controversy about the amount. Section 92.107 says the obligation to refund or to give that written description does not start until the tenant gives a written forwarding address, though under (b) the tenant does not forfeit the refund merely by failing to give one.

Practical version: before you sign anything, pull the deposit figure out of your own records, which Section 92.106 requires you to keep accurately anyway, and make sure that number matches what the buyer will put in the Section 92.105(b) statement. Notices under that subchapter can go by email if you and the tenant have previously emailed each other, which Section 92.113 permits and which is the easiest way to leave yourself a paper trail.

Two provisions in the same subchapter run your way, and they are worth knowing before an argument about the final month starts. Section 92.108(a) says a tenant may not withhold any portion of the last month’s rent on the grounds that the deposit is security for unpaid rent; under (b) a tenant who does is presumed to have acted in bad faith, and a tenant who acts in bad faith is liable to the landlord for three times the rent wrongfully withheld plus the landlord’s reasonable attorney’s fees. Section 92.1041 then gives you a presumption that you refunded or accounted on time if the refund or the accounting is placed in the United States mail and postmarked on or before the required date. Mail it, and keep the postmark.

What the TREC contract and the lease addendum actually do

If your house sells on the promulgated resale contract, two pieces of paper control the lease question. The first is Paragraph 4 of the contract, which opens: “Except as disclosed in this contract, Seller is not aware of any leases affecting the Property. After the Effective Date, Seller may not, without Buyer’s written consent, create a new lease, amend any existing lease, or convey any interest in the Property.”

Read that second sentence twice, because it catches sellers in the middle of a deal. Once you are under contract, a renewal your tenant asks for, a rent change you agree to, or a month-to-month extension you offer as a kindness is an amendment you are not free to make. It needs the buyer’s written consent.

The second is TREC No. 51-1, the Addendum Regarding Residential Leases, revision date 11-07-2022. It defines “Residential Lease” broadly as any lease of the property to a tenant “including any addendum, amendment, or move-in condition form,” repeats the no-new-lease-or-amendment-without-consent rule, and then asks the parties to check only A or B.

Option B is assignment and assumption, and it is the normal choice when the lease is staying. Its machinery is worth knowing line by line, because most of it is deadlines:

• B(1)(b): if the buyer has not already received copies, the seller provides the leases within 3 days after the Effective Date, and the buyer may terminate within a blank number of days after receiving them, earnest money refunded. That day count is an empty line on the form. Fill it in rather than leaving it to argument.
• B(1)(c): oral leases get disclosed by tenant name, rental amount and term. An oral month-to-month arrangement with a long-standing tenant is still a Residential Lease for this purpose.
• B(2): at closing the seller transfers security deposits as defined by Section 92.102, and the buyer delivers the tenant the signed statement with the exact dollar amount. This is the contract wiring for the statute discussed above.
• B(3): seven seller representations, each “to Seller’s knowledge” and each with a space to explain any exception. The lease is in full force and effect; no tenant is in default or in violation; no tenant has prepaid rent; no tenant is entitled to any offset against rent; there are no outstanding tenant claims against the seller; there are no pending disputes with any tenant or prior tenant; and there are no other agreements, options or rights outside the lease.

Paragraph B(4) is the part a seller should actually find reassuring, and it is the part most summaries leave out. If one of those seven statements becomes untrue after the Effective Date, you notify the buyer promptly and you have 7 days to cure the condition. If it is still untrue after the 7 days, the buyer may terminate “as Buyer’s sole remedy” within 5 days after that period expires, and if the buyer does not terminate in time, the buyer waives the right to terminate. The closing date extends daily as needed for those notices. So a representation going sideways is a notice-and-cure problem with a ceiling on it, not an open-ended liability.

One more clause belongs in the same breath. Paragraph 10A of the contract warns that any possession by a buyer before closing, or by a seller after closing, that is not authorized by a written lease “will establish a tenancy at sufferance relationship between the parties,” and tells both sides to talk to their insurance agent because coverage may be limited or terminated. If you are planning to stay a few days past funding, paper it.

Why checking box A is the expensive mistake

Option A of the addendum says all Residential Leases must be terminated by closing, and that the seller “shall deliver possession of the Property in accordance with Paragraph 10 of the contract with no tenant or other person in possession or having rights to occupy the Property.”

Then it adds a bracketed warning in the form’s own words: “[Notice: This paragraph will not amend or terminate any existing lease. Consult an attorney and refer to the Residential Leases for rights to terminate before agreeing to this provision.]”

TREC put that notice there for a reason. Checking box A does not terminate anything. It is a promise to the buyer about a result, and the only way to produce the result is through whatever rights your actual lease and Texas law give you. If the lease runs eight more months and contains no sale or early-termination clause, box A commits you to delivering something you have no legal power to deliver, and Paragraph 15 of the contract puts you in default if you cannot.

So the order of operations is: read the lease first, then decide which box gets checked. Not the other way around.

If you want the house empty first, here is what Texas allows

A fixed-term lease runs to the end of its term. Wanting to sell is not, by itself, a legal reason to end it early. If your lease has a clause that lets either side terminate on a sale, that clause controls, and it is the first thing to look for.

A month-to-month tenancy is different, and the arithmetic is in Section 91.001. Either side may end it by giving notice of termination. Under (b), if the rent-paying period is at least a month, the tenancy ends on the later of the day named in the notice or one month after the day notice is given. Under (c), if the rent-paying period is shorter than a month, it ends on the later of the day named or the day following a period, starting when notice is given, equal in days to the rent-paying period. Under (d), if termination lands mid-period, the tenant owes rent only up to the termination date.

Subsection (e) is the one that decides most real cases: those rules do not apply if the landlord and tenant “have agreed in an instrument signed by both parties on a different period of notice to terminate the tenancy or that no notice is required,” or if there is a breach of contract recognized by law. A signed lease can lengthen the notice, shorten it, or remove it. Read yours before you count any days.

If a tenant stays past the end of the right of possession, that is a forcible detainer under Section 24.002, and (b) requires the demand for possession to be in writing and to meet Section 24.005. Section 24.005(a) requires at least three days’ written notice to vacate before filing a forcible detainer suit, “unless the parties have contracted for a shorter or longer notice period in a written lease or agreement,” and adds that a landlord filing on holdover grounds “must also comply with the tenancy termination requirements of Section 91.001.” The suit itself is filed in the justice court for the precinct where the property sits. It takes time you may not have, and a pending eviction is not a selling point.

The lawful alternative is to negotiate, in writing. Nothing in the code stops you from agreeing with your tenant on a move-out date in exchange for releasing remaining rent, returning the deposit in full, or covering moving costs. Price that against the cost of carrying the house for the rest of the lease term, and have an attorney put the agreement in writing before money moves.

Retaliation is the trap nobody warns sellers about

This is the risk most often missed, because the seller is not trying to retaliate against anyone. They are trying to sell a house.

Section 92.331(a) says a landlord may not retaliate against a tenant because the tenant, in good faith, exercises or attempts to exercise a right or remedy granted by the lease, a municipal ordinance, or state or federal statute; gives the landlord a notice to repair or exercises a remedy under Chapter 92; complains to a governmental entity responsible for enforcing building or housing codes, to a public utility, or to a civic or nonprofit agency about a code violation or utility problem the tenant believes in good faith is valid; or establishes, attempts to establish, or participates in a tenant organization.

Subsection (b) then puts a six-month window around it. Within six months after the tenant’s protected action, the landlord may not file an eviction proceeding except on the grounds listed in Section 92.332, deprive the tenant of the use of the premises except for reasons authorized by law, decrease services, increase rent or terminate the lease, or engage in bad faith in a course of conduct that materially interferes with the tenant’s rights under the lease.

Put that next to a normal sale timeline. A tenant sends a written repair request in March. In May you decide to sell and give a month-to-month termination notice so you can deliver a vacant house. The termination is squarely inside the six-month window, and Section 92.333 lets the tenant recover a civil penalty of one month’s rent plus $500, actual damages, court costs and reasonable attorney’s fees, less any delinquent rent owed to you. Section 92.335 also makes retaliation a defense in the eviction suit itself, which is how a two-week possession problem becomes a two-month one.

The statute is not a trap door, though, and the defenses are real. Section 92.332(a) says the landlord is not liable “if the landlord proves that the action was not made for purposes of retaliation.” Subsection (b) lists circumstances that are valid grounds for eviction or lease termination “in any event” and do not constitute retaliation, including that the tenant is delinquent in rent when the notice to vacate is given or the suit is filed; that the tenant, a family member, or a guest or invitee intentionally damages property or threatens the personal safety of the landlord, the landlord’s employees or another tenant; a material breach of the lease other than holding over; holding over after the tenant’s own notice of termination or intent to vacate; and holding over after the landlord’s end-of-term termination notice where the tenant did not act under Section 92.331 until after that notice was given.

Section 92.334 runs the other way, and a seller should know it before the word retaliation frightens them out of a decision. Under (b), if a tenant files or prosecutes a suit under the subchapter in bad faith, the landlord may recover possession of the dwelling unit and a civil penalty of one month’s rent plus $500, court costs and reasonable attorney’s fees. Under (a), where the suit rests on a code or utility complaint and the inspector or utility company representative visits the premises and determines in writing that no violation or problem exists, there is a rebuttable presumption that the tenant acted in bad faith.

What that means in practice is timing and documentation. If you are going to end a tenancy, know what the tenant has done in the previous six months, write down your actual reason at the time you decide, and get advice before you serve anything if a repair request or a code complaint is anywhere in the recent history.

Your landlord duties keep running while the house is on the market

Listing a house does not suspend Chapter 92. Until title transfers, you are still the landlord.

The repair duty is the big one. Section 92.056(b) makes a landlord liable where the tenant has given notice to repair a condition that materially affects the physical health or safety of an ordinary tenant, has given the required follow-up notice or used tracked mail, the landlord has had a reasonable time and has not made a diligent effort, and the tenant was not delinquent in rent when the notices were given. Under (d) there is a rebuttable presumption that seven days is a reasonable time to repair. Those elements are cumulative, all six of them, and subsection (a) makes the whole thing subject to two further limits that are complete answers in the right case: Section 92.052(b), for conditions caused by a tenant, and Section 92.054, for conditions that are insured casualties.

If you do not act, Section 92.0561 lets the tenant repair and deduct, capped under (b) at one month’s rent or $500, whichever is greater, and under (c) as often as necessary so long as the total in any one month stays within that cap. That remedy is not self-executing either: subsection (d) says repairs may be made “only if all of the following requirements are met,” which includes that your repair duty was not validly waived under Section 92.006(e) or (f), and that the tenant’s notice actually stated an intention to repair the condition and gave a reasonable description of the intended repair. The triggering events in (d)(3) include a failure to remedy sewage backup or flooding from broken pipes inside the dwelling, a total cessation of potable water the landlord agreed to furnish, and failures of heating or cooling equipment the landlord agreed to furnish. Those are exactly the items a buyer’s inspector is also about to look at.

Then there is the disclosure duty that your sale directly triggers. Section 92.201(a) requires the landlord to disclose, on request, the name and a street or post office box address of the holder of record title according to the county deed records, and, where an off-site entity is primarily responsible for managing the dwelling, that management company’s name and street address. Under (b) that goes to the tenant in writing within seven days of the request, or by continuously posting it, or by including it in the lease or written rules. Section 92.202(a) adds a second step before remedies bite: the tenant gives written notice that remedies may be exercised, and liability attaches only if the landlord fails to give the information “before the eighth day after” that notice. Read that as a seven-day deadline, not an eight-day one. Section 92.203 requires corrections within seven days of notice when a name or address changes, and Section 92.204 defines bad faith, in the statute’s own spelling, as “wilfully” giving or failing to correct information the landlord knows is incorrect.

A sale changes the holder of record title. That is precisely the fact Section 92.201 is about, so expect the question and have the answer ready.

If your tenant is a servicemember or a dependent

Fort Hood is in Bell County, so this provision comes up here more than its placement in the code suggests, and it can change the value of the lease you are selling.

Section 92.017(b) lets a tenant who is a servicemember, or a dependent of one, vacate and avoid liability for future rent and all other sums due under the lease for terminating early, in two situations: where the lease was executed by or on behalf of a person who afterwards, or during the term, enters military service; or where a servicemember already in military service signed the lease and then received military orders for a permanent change of station, or to deploy with a military unit for 90 days or more.

Subsection (c) requires the tenant to deliver written notice of termination plus a copy of the appropriate government document evidencing entry into military service, or a copy of the orders. Subsection (d) sets the effective date: for a lease with monthly rent, the 30th day after the first date the next rental payment is due after the notice is delivered; otherwise the last day of the month following the month the notice is delivered. Subsection (e) then requires the landlord, within 30 days after that effective date, to refund all rent or other amounts paid in advance for any period after the termination. Subsection (h) makes a landlord who violates the section liable for actual damages, a civil penalty equal to one month’s rent plus $500, and attorney’s fees, so it is not a provision to argue with.

Three limits travel with that right, and in a county that contains Fort Hood they are worth checking before you price a lease as income. Under subsection (f), a termination does not affect the tenant’s liability for delinquent, unpaid rent or other sums owed to you before the lease was terminated, so arrears do not vanish with it. Under subsection (g) they do vanish, and the tenant is released from all liability for delinquent unpaid rent, if the lease does not contain language substantially equivalent to this sentence: “Tenants may have special statutory rights to terminate the lease early in certain situations involving family violence or a military deployment or transfer.” Go and look for that sentence in your own lease. And under subsection (j), a landlord and tenant may agree to waive the right where the tenant or a dependent living with the tenant moves into base housing or other housing within 30 miles of the dwelling, in a signed writing separate from the lease that complies with federal law, though that waiver does not apply if they move into housing owned or occupied by family or relatives, or if the move is wholly or partly because of a significant financial loss of income caused by the military service, which subsection (k) defines as a reduction of 10 percent or more of household income. Absent a waiver of that kind, subsection (i) says the right may not be waived by a tenant.

Why it matters to a sale: if you are marketing the lease as income, a Section 92.017 termination can remove it between contract and closing. That would also make your Paragraph B(3)(a) representation that the lease is in full force and effect untrue, which drops you into the B(4) notice-and-cure path described above. It is not a disaster, but it is a conversation to have with your buyer early rather than on the closing statement.

The seller’s disclosure notice still applies to a rental you never lived in

Owners who have never occupied the house often assume the disclosure notice is somebody else’s problem. It is not.

Section 5.008(a) requires a seller of residential real property comprising not more than one dwelling unit to give the purchaser the written notice prescribed by that section, or one substantially similar containing at a minimum all of its items. The notice itself opens by asking whether the seller is occupying the property and, if not, how long it has been since the seller occupied it. That line is doing useful work for you: it tells the buyer where your knowledge comes from.

Subsection (d) is the provision that matters most to a landlord. The notice “shall be completed to the best of seller’s belief and knowledge as of the date the notice is completed and signed by the seller. If the information required by the notice is unknown to the seller, the seller shall indicate that fact on the notice, and by that act is in compliance with this section.” Writing “unknown” where you genuinely do not know is compliance, not evasion. What is not compliance is guessing.

Subsection (e) lists eleven transfers the section does not apply to, and none of them is “it is a rental.” They are transfers under a court order or foreclosure sale; by a bankruptcy trustee; to a mortgagee by a mortgagor or successor in interest, or to a deed-of-trust beneficiary by a trustor or successor; by a mortgagee or beneficiary that acquired the property at a power-of-sale or court-ordered foreclosure or by deed in lieu; by a fiduciary administering a decedent’s estate, guardianship, conservatorship or trust; from one co-owner to other co-owners; to a spouse or to a person in the lineal line of consanguinity; between spouses under a dissolution or separation decree or an incidental property settlement; to or from a governmental entity; of a new residence not previously occupied; and of real property where the value of any dwelling does not exceed five percent of the value of the property.

Subsection (f) sets delivery on or before the effective date of the contract, and gives the purchaser the right to terminate for any reason within seven days after receiving the notice if the contract was signed without it. There is more on how that interacts with an as-is sale on our page about the seller’s disclosure in an as-is cash sale.

The practical step for a landlord is simple and it protects you: ask your tenant in writing what they have reported to you or to your management company, and keep the reply. Your tenant knows about the leak under the sink and the breaker that trips. “Unknown” is lawful, but a documented ask is a much better place to be standing if anybody asks later what you knew.

What a tenant in place does to your buyer pool

This is the part that decides your price, and it is mostly arithmetic about who can physically close.

A buyer who is borrowing to buy a home to live in has to be able to take possession. Paragraph 10A of the contract has the seller delivering possession at closing, and a lease that runs past the closing date means that buyer either waits or walks. That removes a large share of the market from your house, not because of your tenant, but because of the calendar.

An investor buyer is the opposite: the lease is part of what they are buying. For that buyer, the documents are the asset. A signed lease, a clean payment ledger, the deposit reconciled to the dollar, and a tenant who is not in dispute with you make the house worth more. Gaps in that paperwork cost you more than they cost the buyer, because the buyer prices the uncertainty and you pay for it.

A buyer who is not borrowing at all can close around almost any of it, which is where a cash sale fits. The trade is the usual one, and we are not going to pretend otherwise: you get speed and certainty, and you give up some price. Our page comparing a cash offer with a traditional listing sets out the comparison without the sales pitch.

What nobody can tell you from a web page is what a below-market lease does to your number, because that depends on your rent, your term and your local rental market. If your rent is well under what the house would fetch today, an investor is buying a discount on their own income for the rest of the term, and will say so in the offer. If the rent is at market and the history is clean, the lease is an asset rather than a discount. Get the rent figure, the term and the renewal date in front of you before you ask anyone what the house is worth.

Three routes, and what each one really costs you

One route is missing from that table because it needs no third party at all: your tenant may be the buyer. Someone already living in the house has no possession problem to solve, and a tenant who wants to stay is worth asking before you market the house to anyone else. There is also a fourth option people reach for that is usually the worst of them: start an eviction to clear the house, then list it. It costs you the notice period, the court setting, the risk that a retaliation defense under Section 92.335 lands, and the deposit exposure if the accounting slips past 30 days. Sometimes it is still the right call. It is rarely the fast one.

A checklist before you talk to anyone

Work through these in order. Most of the leverage in a tenant-occupied sale comes from having the file assembled before the first conversation, not from negotiating harder later.

1. Find the lease, every amendment, and any move-in condition form. Under TREC 51-1 all of those are part of the “Residential Lease.”
2. Write down the term end date, the renewal mechanism, the monthly rent, and whether anything lets either side terminate on a sale.
3. Reconcile the security deposit to the exact dollar, and separate it from any prepaid rent. The buyer will have to state that figure to the tenant under Section 92.105(b).
4. List any outstanding repair requests and what you did about each one, with dates.
5. Check the last six months for anything that could make a termination look retaliatory under Section 92.331(a).
6. Note whether your tenant is a servicemember or a dependent, and check the lease both for the Section 92.017 warning sentence and for any signed 30-mile waiver, because Section 92.017 may let them end the lease mid-sale and those two documents decide what that costs you.
7. Decide, with advice, whether you can actually deliver a vacant house. Then you know whether box A or box B on the addendum is honest.
8. Ask your tenant in writing what they know about the condition of the house, and keep the answer for your Section 5.008 notice.
9. Confirm how you are allowed to show the property, which comes from the lease and not from the statute.
10. Only then ask what the house is worth, on both routes, so you are comparing two real numbers.

Where we fit, and what we are

Bell County Cash Offers is a home-buying business. It is not a real estate brokerage, and this page is not a listing service. When we buy, the buyer is acting as a principal for its own benefit and is not representing you. Jessie Walters separately holds Texas real estate broker license #509401 and owns JD Walters Real Estate LLC, so if the open market is the better route for your house, there is a licensed side of the business that can list it, and we will say so.

Nothing on this page is legal advice. The lease is a contract, the statutes above have exceptions, and a tenancy that is going to end early is a question for an attorney, not for a website. What we can do is read the lease with you and tell you plainly which of the three routes your situation actually supports.

If the house also came to you through an estate, the page on selling an inherited house in Bell County covers the authority question that has to be settled before any of this matters.