Texas Legislative Bills

The most recent legislation impacting Texas real estate wholesaling includes HB 2570, enacted in September 2023. This law requires wholesalers to provide written disclosure to sellers outlining the intention to assign or sell the contract and to disclose their profit or fee. Sellers have a 72-hour right to cancel after signing. Additionally, the pending HB 234 bill, if passed in January 2025, would mandate registration of wholesale contracts with county clerks and impose a 5-day cooling off period for sellers.

Currently, wholesale contracts are not required to be registered with county clerks. However, Pending Bill HB 234 proposes this requirement, including penalties for failure to register and a 5-day cooling off period for sellers. Keep an eye on this bill as it could increase regulatory oversight of wholesaling activities.

Yes. Under HB 2570, which took effect on September 1, 2023, wholesalers must provide written disclosures to property sellers. This disclosure must specifically state the wholesaler’s intention to assign or sell the contract and include the exact profit or fee amount earned from the transaction.

No. The Senate Bill 1340, which would have required wholesalers to hold a real estate license and complete mandatory education, failed to advance in 2023 due to industry opposition. So currently, Texas does not legally require wholesalers to be licensed real estate agents.

Under HB 1893, enacted in September 2021, investors purchasing residential properties through entities such as LLCs or corporations must disclose their ownership structure. This law targets transparency in institutional investor activity in the single-family home market.

Sellers now have a 72-hour cancellation right after signing wholesale contracts due to HB 2570. This gives property owners a brief window to reconsider and void the contract if they choose, enhancing protections in wholesale deals.

While HB 2570 mandates disclosure, penalties for non-compliance are not explicitly outlined at this time. However, the pending HB 234 does propose penalties for failing to register wholesale contracts if enacted, indicating growing regulatory enforcement.

Investors and wholesalers should thoroughly understand current laws such as HB 2570 and HB 1893, provide clear disclosures, respect seller cancellation rights, and monitor pending legislation like HB 234. Consulting legal counsel and maintaining transparent transaction practices are best practices for compliance.

No mandatory education requirements currently exist for wholesalers in Texas. The failed SB 1340 in 2023 would have imposed such requirements but did not pass, leaving wholesalers free from licensing or formal training mandates.

Texas is moving toward greater transparency and consumer protections in wholesaling and institutional investments, as seen with HB 2570 and HB 1893. Pending legislation may further increase oversight with contract registration and cooling off periods, reflecting a trend toward balancing investor activities with seller safeguards.