Texas has officially shifted the landscape for assignment contracts and wholesaling practices. As of January 1, 2024, Texas Property Code §5.0205 requires buyers who plan to assign their interest in a real estate purchase contract to disclose it—clearly, formally, and in writing—before the assignment occurs.
The Texas Real Estate Research Center at Texas A&M University published a detailed breakdown of these changes in early 2025, emphasizing the state’s commitment to transparency in transactions where equitable interest, not legal ownership is being sold.
For years, nondisclosure of assignments disproportionately harmed vulnerable sellers:
- grieving heirs
- overwhelmed executors
- seniors with equity
- distressed owners fearing foreclosure
- families in probate navigating property they didn’t expect to manage
- Under the new statute, this lack of transparency is no longer tolerated.
✅ What Buyers Must Now Disclose
Texas Property Code §5.0205 requires buyers to tell the seller, in writing, that:
1. They are not the legal owner of the property, and
2. They intend to assign the contract to another party.
This notice must be given before the assignment agreement is executed—not after, not at closing, and not casually mentioned when convenient.
Even the simple addition of “and/or assigns” to the buyer’s name constitutes sufficient notice under the law.
✅ What This Means for Sellers
Sellers often assume a buyer who presents a “cash offer” is the actual purchaser. That is no longer a safe assumption. Under the new statute, sellers must be told if:
- a third party will close instead
- the buyer is a wholesaler
- the buyer intends to profit by assigning their contract
- multiple entities are being shuffled behind the scenes
Sellers navigating probate, mortgage stress, or unfamiliar legal terrain particularly benefit from this statutory transparency.
✅ Assignments Are Still Legal — Deception Isn’t
Texas did not outlaw assignments. Assigning contractual interest remains legal and common. What changed is the requirement for honesty.
The public policy is clear: sellers deserve to know whether the person across the table truly intends to purchase the property or simply flip their contractual interest for profit.
✅ Why Legal Guidance Matters
Assignments touch both real estate and contract law. Even licensed agents cannot interpret equitable interest rights or enforce assignment restrictions.
Sellers especially in probate or distressed situations deserve counsel that protects equity, transparency, and legacy.
If you have questions about assignment disclosures, wholesaler activity, contract enforceability, or protecting an estate’s equity, our firm is here to help.