What TREC says wholesaling is
The Texas Real Estate Commission describes wholesaling as contracting to buy a property and then selling the contractual interest before closing. In March 2022 TREC published the results of a wholesaling survey with more than 4,500 responses, with Dallas–Fort Worth–Arlington the top metro among them, and wrote that wholesalers are not required to hold a real estate license as long as they disclose the nature of their interest. Title company respondents told TREC that sellers were often unaware they were ultimately selling to someone other than the wholesaler. The 2024 change to the law answers that complaint.
The two disclosures, in the statute's words
Property Code section 5.0205 says that before entering into a contract to sell an option or assign an interest in a contract to purchase real property, a person must disclose in writing to any potential buyer that the person is selling only an option or assigning an interest in a contract and does not have legal title, and must disclose in writing to the owner of the property that the person intends to sell the option or assign the contract.
Occupations Code section 1101.0045 says a person may acquire an option or an interest in a contract to purchase real property and then sell or assign it without a license only if the person does not use the option or contract to engage in real estate brokerage, and discloses in writing the nature of the equitable interest to any seller or potential buyer. Subsection (b) adds that selling or assigning without that disclosure is engaging in real estate brokerage. TREC's rule 22 TAC 535.6 repeats the test, and its subsection (c) applies the same written disclosure to license holders assigning their own contracts.
| Rule | Who gets the disclosure | What it covers |
|---|---|---|
| Property Code 5.0205 | Any potential buyer, and the owner of the property | To the buyer: you are selling only an option or assigning an interest in a contract and do not have legal title. To the owner: you intend to sell the option or assign the contract |
| Occupations Code 1101.0045 | Any seller or potential buyer | The nature of the equitable interest. Selling or assigning without it is engaging in real estate brokerage |
| 22 TAC 535.6 | The same people as under 1101.0045 | Repeats the 1101.0045 test; subsection (c) applies a written disclosure to license holders assigning their own contracts |
Source: The statute and rule text quoted above, linked under Sources below. Period: Texas law as of 2026-10-26.
What changed on January 1, 2024
SB 1577 (88th Legislature) renumbered Property Code 5.086 as 5.0205, added the disclosure to the owner, and made the writing mandatory. Before that the statute required a disclosure to the buyer only. TREC's year-end 2023 notice put it plainly: effective January 1, a person who engages in the practice of wholesaling must disclose in writing the nature of the equitable interest to any seller or potential buyer. Any article that cites section 5.086, or says the disclosure goes to the buyer, is describing the old rule.
What changed in 2025, and what did not
No 2025 law banned wholesaling in Texas, and neither section 5.0205 nor section 1101.0045 was amended. Two 2025 laws do touch the business. HB 4063 added Property Code section 12.020, which since September 1, 2025 sets what anyone recording a one-sided memorandum of contract on a Texas home must do, and lets the owner release a non-compliant one. SB 1968, effective January 1, 2026, rewrote the agency rules for license holders: a license holder who performs any brokerage act for a buyer of residential property must sign a written agreement with that buyer before presenting an offer, and the Information About Brokerage Services notice has new content. SB 1968 governs license holders, not an unlicensed wholesaler selling their own contract.
The Legislature does not meet in regular session again until January 2027. A 2025 bill that would have capped corporate owners at ten single-family rental homes, SB 443, died in committee.
Your contract versus someone else's
The exemption in section 1101.0045 covers the person who acquired the option or contract. It does not cover marketing another person's contract for a fee. In our reading, offering, negotiating or finding a buyer for someone else's contract interest in exchange for a cut is performing the acts the Occupations Code defines as brokerage, for another person, on an interest in real property (sections 1101.002(1) and 1101.004), and a person who does that without a license cannot sue to collect the fee (section 1101.806(b)). We found no court ruling on co-wholesaling, so treat that as the desk's reading and ask a Texas real estate attorney before you build a business on JV dispo without a license.
That is why a disposition desk run by a license holder works through a sponsoring broker, and why its fee sits in a written agreement that the broker signs. A sales agent may not take compensation from anyone but the broker, or pay anyone except through the broker (section 1101.651).
How FundPlug handles it
The intake asks every wholesaler to confirm the section 5.0205 disclosures to the owner and to any buyer before anything is marketed. The desk is run by a licensed Texas sales agent under a sponsoring broker, and compensation is set in writing through that broker. If your contract is not assignable, or the disclosures are not done, fix the paper first and then send it. Once the paper is clean, the calculator scores the deal against the desk's buy box screen.