What the law covers
Section 12.020 applies to a unilateral memorandum of contract: a written document signed only by a person who is not an owner, that asserts a contract, option, right of first refusal, or an offer or right to match an offer to buy residential property. Residential property means a one to four family home or a condominium unit. A memorandum the owner also signed is not unilateral and is outside the section.
What you must do when you record one
- Give the county clerk a mailing address for yourself and a certificate of mailing.
- No later than the date you file, send the owner a copy of the filed memorandum and the notice letter the statute prescribes, by registered or certified mail, return receipt requested.
- Keep the receipt. It is your proof that the memorandum gives notice at all.
What the owner can do
An owner who gets the notice may record an affidavit for release, with a certificate of mailing, and mail both to the filer. Once recorded, the affidavit releases the memorandum of record. If the filer does not record a contradicting affidavit by the 45th day after the owner's certificate of mailing is recorded, buyers and lenders for value may rely conclusively on the release, and the filer's only remaining remedy is money damages against the owner. The bill sets out the forms for the notice and the affidavit.
What happens if you skip the steps
A unilateral memorandum filed on or after September 1, 2025 that does not comply gives no constructive or actual notice. The right it asserts is unenforceable against a purchaser or lender for value, and money damages are the only remedy. In other words, a non-compliant memorandum does not cloud title. It is a piece of paper in the county records.
Why the Legislature did it
The House bill analysis describes filers who record memoranda the seller never learns about and then extract payment unrelated to the terms of the contract to simply go away, a practice it calls greenmail. The analysis does not use the word wholesaler. The practice it describes is one some wholesalers used, and the cure applies to anyone who records a one-sided memorandum on a Texas home.
What this means for your dispo
This is general information, not legal advice. The statute has forms and deadlines, and a Texas real estate attorney can walk you through them in an hour. When the paper is clean, run the numbers through the calculator before you send the file.
- Record a memorandum to give notice, not to pressure a seller. If the seller is trying to sell around you, your remedy is the contract, with counsel.
- If you record, comply the same day: address to the clerk, certified mail to the owner, receipt in the file.
- Tell your buyer and the title company that a memorandum is recorded and show them the receipt. A compliant memorandum is released at closing like any other instrument.
- Expect the desk to ask. FundPlug asks on the first call whether anything is recorded against the property and, if a memorandum is, whether the notice went out.