Selling a House with Renters in Texas (2026)
Reviewed by DocDraft Legal Team · Texas · Last updated 2026-05-18
In Texas, selling a home with renters is governed by the Texas landlord-tenant code as much as by the purchase contract. Texas's sale-driven termination rule: 30 days. This guide lays out the Texas-specific sequence, the required documents, and the state rules on notice, deposit handling, and lease continuity that frame the transaction.
Key Considerations
ROFR and relocation assistance are the two overlays that most frequently complicate a Texas sale of a tenant-occupied home. On ROFR: No statewide statutory right of first refusal for residential tenants on owner sale (consult the state code) On relocation assistance: None owed at state level. No statewide relocation-assistance statute for tenants displaced by sale. (consult the state code) Whether either applies in a given transaction is a city-and-property-type question, not a statewide one.
Two administrative duties survive into a Texas closing on a tenant-occupied home. The first is the security deposit handover: On sale, the new owner is liable for the return of security deposits from the date of acquisition and must deliver a signed statement to the tenant acknowledging acquisition, responsibility for the deposit, and the exact dollar amount. The former owner remains liable until the new owner has received the deposit or assumed liability. Foreclosure by mortgage lienholder is excepted. See Tex. Prop. Code § 92.105. The second is the format of any tenant-facing notice: Notice of change of ownership and the § 92.105 signed-statement requirement must be in writing and delivered to the tenant. See Tex. Prop. Code § 92.105(b). Both are routine when handled at the start of the transaction and expensive to fix afterward.
Two doctrines frame a Texas sale of a tenant-occupied home. The termination doctrine: 30 days. The lease-survives-sale doctrine: Implied by statute; a new owner is liable for the return of security deposits from the date title is acquired. A seller who plans the transaction around the assumption that the tenant must vacate at closing is usually operating against the actual rule.
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Relevant Documents
The Texas document stack runs roughly as follows: a tenant-facing notice that the property is being listed, a showing-notice template formatted to the state's entry rule, an assignment of leases and security deposits executed at closing, and a deposit transfer letter giving the tenant the new holder's name and address. In Texas, showing notices must conform to Tex. Prop. Code § 92.105(b). Deposit transfer in Texas is governed by Tex. Prop. Code § 92.105.
Assignment of Leases
A legal document that transfers the landlord's rights and obligations under existing lease agreements to the new property owner, ensuring continuity of the tenancy terms.
Cash for Keys Agreement
A document that formalizes an arrangement where the property owner offers financial incentive to tenants to vacate the property voluntarily before the sale or closing date.
Early Lease Termination Agreement
If the seller and tenants mutually agree to end the lease early before the sale, this document outlines the terms of that agreement, including any compensation or notice periods.
Estoppel Certificate
A document signed by tenants confirming the terms of their lease, current rent amount, security deposit held, and that the landlord is not in default. This provides assurance to potential buyers about the status of existing tenancies.
Notice to Tenants of Intent to Sell
A formal written notice informing tenants of the property owner's intention to sell the property. This document helps establish clear communication and may be required by law in many jurisdictions.
Property Disclosure Statement
A document where the seller discloses known material defects and other important information about the property, including the presence of tenants and the terms of their occupancy.
Real Estate Purchase Agreement
The contract between seller and buyer that should specifically address the existence of tenants, the status of their leases, and how those leases will be handled during and after the sale.
Rent Roll
A document that lists all rental units, current tenants, lease terms, monthly rent amounts, security deposits, and payment histories. This provides potential buyers with a clear picture of the property's rental income.
Security Deposit Transfer Agreement
A document that formalizes the transfer of tenant security deposits from the seller to the buyer, including accounting for all deposits and accrued interest where applicable.
Relevant Laws
Texas Property Code § 92.016 - Right of Tenant to Vacate Following Landlord's Breach
When a property is sold, the new owner must honor existing lease agreements. Tenants have the right to stay until their lease expires unless there's a specific clause in the lease allowing for termination upon sale. This law protects tenants from immediate eviction when ownership changes hands.
Texas Property Code § 92.012 - Landlord's Duty to Mitigate Damages
If a tenant breaks their lease early (which might happen during a property sale), the landlord has a legal duty to make reasonable efforts to re-rent the property to minimize the tenant's liability for future rent. This is relevant when negotiating with tenants who may want to leave before their lease ends during a sale.
Texas Property Code § 92.052 - Landlord's Duty to Repair or Remedy
During the sale process, the current landlord remains responsible for maintaining the property in a habitable condition. This obligation continues until the property officially changes ownership, ensuring tenants' rights to a habitable dwelling are protected throughout the sale process.
Texas Property Code § 92.056 - Landlord Liability and Tenant Remedies
If repairs aren't made in a timely manner during the sale process, tenants have specific remedies available to them. This is important because property maintenance issues sometimes arise during ownership transitions, and both sellers and buyers need to be aware of potential liability.
Texas Property Code § 92.001 - Security Deposit Transfer
When selling a property with tenants, the seller must transfer all security deposits to the new owner or return them to tenants. The new owner becomes liable for the return of security deposits, and tenants must be notified in writing about the transfer of ownership and deposits.
Texas Property Code § 5.062 - Executory Contract Disclosure Requirements
For certain seller-financed transactions, specific disclosures must be made to both buyers and existing tenants. This law ensures transparency in transactions where the property is being sold with tenants in place under certain financing arrangements.
Texas Property Code § 92.008 - Prohibition of Lockouts and Utility Disconnections
Neither the current owner nor the new owner can use lockouts or utility disconnections to force tenants to vacate, even during a property sale. This law prevents sellers or buyers from using illegal tactics to remove tenants who have legal right to remain in the property.
Texas Property Code § 92.009 - Tenant's Right to Restoration After Unlawful Lockout
If a tenant is unlawfully locked out during the sale process, they have the right to a judicial order restoring possession. This protects tenants from being wrongfully displaced while the property changes hands, ensuring their housing rights are maintained.
Regional Variances
Major Metropolitan Areas
Austin has additional tenant protections through the Tenant Relocation Assistance program which may require landlords selling properties to provide relocation assistance to displaced tenants in certain circumstances. The city also requires a 120-day notice period for tenants in properties being sold that were previously subject to affordability requirements.
Dallas has a Tenant's Right to Purchase ordinance that gives tenants the right of first refusal when a landlord decides to sell a rental property. Property owners must provide written notice to tenants of their intent to sell and allow tenants a specified time period to make an offer before accepting other offers.
Houston has fewer local tenant protections than other major Texas cities. However, the city's Fair Housing Office may provide additional oversight in cases where tenants are being displaced due to property sales, particularly in historically disadvantaged neighborhoods or in cases involving protected classes.
San Antonio's Risk Mitigation Policy provides some protections for tenants in properties being sold, including potential relocation assistance. The city also has specific notification requirements for landlords selling properties in designated neighborhood conservation districts.
Border Regions
El Paso has implemented additional tenant notification requirements for property sales in certain zones, particularly in areas with high concentrations of long-term renters. The city requires a minimum 90-day notice period before tenants can be required to vacate due to a property sale.
Laredo has specific ordinances protecting tenants in buildings being sold that are over 30 years old or in historic districts. These include extended notice periods and potential relocation assistance requirements for landlords selling such properties.
Coastal Areas
Galveston has special provisions for rental properties in historic districts being sold. The city's Historic Preservation Ordinance may affect how and when tenants can be removed from properties being sold in designated historic areas, often requiring longer notice periods.
Corpus Christi has implemented tenant protection measures specifically for properties in flood zones being sold. Sellers must disclose additional information to both buyers and current tenants about flood history and risks, which can affect the timeline and process of selling tenant-occupied properties.
College Towns
College Station has specific ordinances addressing the sale of rental properties primarily occupied by students. These include timing restrictions that prevent tenant displacement during academic semesters and additional notification requirements for properties within a certain radius of Texas A&M University.
Denton has implemented tenant protection measures specifically for properties near the University of North Texas and Texas Woman's University. These include restrictions on when eviction notices can be served related to property sales during final exam periods and extended notice requirements for student-occupied housing.
Suggested Compliance Checklist
Send the tenant a written intent-to-sell notice at the start of the process
Before listing days after startingThe notice should disclose that the home is going on the market, describe the showing-notice cadence the seller will follow, and confirm whether the lease will ride into the buyer's hands or whether a separate termination is contemplated.
Run each showing through the state's entry-notice rule
Before listing days after startingNotice of change of ownership and the § 92.105 signed-statement requirement must be in writing and delivered to the tenant. (Tex. Prop. Code § 92.105(b)). Documenting the notice trail is what protects the seller against a later quiet-enjoyment or harassment claim by the tenant.
Move the deposit at closing
During listing days after startingOn sale, the new owner is liable for the return of security deposits from the date of acquisition and must deliver a signed statement to the tenant acknowledging acquisition, responsibility for the deposit, and the exact dollar amount. The former owner remains liable until the new owner has received the deposit or assumed liability. Foreclosure by mortgage lienholder is excepted. (Tex. Prop. Code § 92.105). Send the tenant a written deposit transfer letter identifying the buyer as the new holder, the depository address, and the dollar amount transferred. Keep a counter-signed copy in the closing file.
Determine whether termination is even available on a sale-driven theory
At closing days after starting30 days. If not, plan the transaction around tenant continuity rather than vacancy.
Document the chain of title for the deposit
Before closing days after startingClosing statement, deposit transfer letter, and the tenant's written acknowledgment together evidence that the deposit moved from the seller to the buyer at the closing. Missing any one of the three is where most post-closing deposit disputes arise.
Check whether a ROFR is triggered, and if so, run the notice-and-match process
Before closing days after startingNo statewide statutory right of first refusal for residential tenants on owner sale (consult the state code) The ROFR step adds 30-60 days to the timeline in most ordinances, so it should be identified at the listing stage rather than at contract.
Identify any relocation-assistance obligation
Before closing days after startingNone owed at state level. No statewide relocation-assistance statute for tenants displaced by sale. (consult the state code) Where the tenancy is ending incident to the sale and a relocation payment is owed by local ordinance, fund the payment from closing proceeds and document it in the settlement statement.
Close the transaction
Final step days after startingExecute the deed, sign the assignment of leases and deposits, deliver the tenant notice letter, and credit the security deposit to the buyer on the settlement statement. The lease then runs from the buyer as the new landlord of record.
| Task | Description | Document | Days after starting |
|---|---|---|---|
| Send the tenant a written intent-to-sell notice at the start of the process | The notice should disclose that the home is going on the market, describe the showing-notice cadence the seller will follow, and confirm whether the lease will ride into the buyer's hands or whether a separate termination is contemplated. | notice-to-tenants-of-intent-to-sell | Before listing |
| Run each showing through the state's entry-notice rule | Notice of change of ownership and the § 92.105 signed-statement requirement must be in writing and delivered to the tenant. (Tex. Prop. Code § 92.105(b)). Documenting the notice trail is what protects the seller against a later quiet-enjoyment or harassment claim by the tenant. | - | Before listing |
| Move the deposit at closing | On sale, the new owner is liable for the return of security deposits from the date of acquisition and must deliver a signed statement to the tenant acknowledging acquisition, responsibility for the deposit, and the exact dollar amount. The former owner remains liable until the new owner has received the deposit or assumed liability. Foreclosure by mortgage lienholder is excepted. (Tex. Prop. Code § 92.105). Send the tenant a written deposit transfer letter identifying the buyer as the new holder, the depository address, and the dollar amount transferred. Keep a counter-signed copy in the closing file. | - | During listing |
| Determine whether termination is even available on a sale-driven theory | 30 days. If not, plan the transaction around tenant continuity rather than vacancy. | - | At closing |
| Document the chain of title for the deposit | Closing statement, deposit transfer letter, and the tenant's written acknowledgment together evidence that the deposit moved from the seller to the buyer at the closing. Missing any one of the three is where most post-closing deposit disputes arise. | - | Before closing |
| Check whether a ROFR is triggered, and if so, run the notice-and-match process | No statewide statutory right of first refusal for residential tenants on owner sale (consult the state code) The ROFR step adds 30-60 days to the timeline in most ordinances, so it should be identified at the listing stage rather than at contract. | - | Before closing |
| Identify any relocation-assistance obligation | None owed at state level. No statewide relocation-assistance statute for tenants displaced by sale. (consult the state code) Where the tenancy is ending incident to the sale and a relocation payment is owed by local ordinance, fund the payment from closing proceeds and document it in the settlement statement. | - | Before closing |
| Close the transaction | Execute the deed, sign the assignment of leases and deposits, deliver the tenant notice letter, and credit the security deposit to the buyer on the settlement statement. The lease then runs from the buyer as the new landlord of record. | - | Final step |
Frequently Asked Questions
At a Texas closing the security deposit either moves to the buyer (with a written deposit transfer letter to the tenant) or is refunded to the tenant in full. On sale, the new owner is liable for the return of security deposits from the date of acquisition and must deliver a signed statement to the tenant acknowledging acquisition, responsibility for the deposit, and the exact dollar amount. The former owner remains liable until the new owner has received the deposit or assumed liability. Foreclosure by mortgage lienholder is excepted. See Tex. Prop. Code § 92.105. The chain of title for the deposit should be documented in the closing file.
A Texas sale of a tenant-occupied home is permitted, and the tenant ordinarily stays through closing. 30 days. The buyer takes the property subject to the lease unless an independent termination has already occurred under the state landlord-tenant statute.
Sale does not end the lease as a default rule. Implied by statute; a new owner is liable for the return of security deposits from the date title is acquired. A Texas buyer of a tenant-occupied home takes title subject to the existing tenancy and inherits the seller's landlord obligations.
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