As a real estate investor in Texas, nothing disrupts a transaction more than unclear title records and questionable claims. Until now, unilateral memorandums of contract could be filed by non-owners, clouding the title and complicating closings. But with the passing of House Bill 4063, that risk is significantly reduced.
Starting September 1, 2025, HB 4063 enforces clear guidelines that protect residential property owners, investors, and lenders from fraudulent or coercive filings. Here’s how this new law changes the game—and why it’s a win for Texas real estate investors.
In This Article:
What Is a Unilateral Memorandum of Contract?
A unilateral memorandum of contract is a document filed by someone (not the owner) claiming they have a contractual interest in a residential property—such as:
- A purchase agreement
- An option to buy
- A right of first refusal
- A right to match offers
The problem? These memorandums could be filed without the owner’s signature or consent, often leading to legal standstills or demands for payment to release the claim—an unethical tactic known as “greenmail.”
Common Risks and Abuse
When someone files this kind of document without basis, it creates doubt about ownership. Even a false claim can slow or stop a property sale. This can discourage potential buyers or delay closings. One major abuse of these filings is known as “greenmail.” Here, a person files a memorandum to create trouble, then asks for money to remove it.
Property owners often gave in to these demands just to complete a deal. Legitimate investors and lenders faced delays or walked away. These tactics also caused trust issues in the market. By challenging these claims properly, owners can protect their rights. HB 4063 gives owners better tools to address these problems quickly and fairly.
Secure Your Real Estate Transactions
Learn how HB 4063 can protect your property deals from false filings and title issues.
Key Provisions of House Bill 4063
When the Law Takes Effect
HB 4063 aims to eliminate this issue by adding Section 12.020 to the Texas Property Code. The new section applies to residential properties, including single-family homes, duplexes, and condo units.
As investors, this law provides much-needed clarity and security, especially when conducting due diligence or preparing for closing.
New Filing Steps
HB 4063 adds new rules that anyone filing a memorandum must follow. First, the person filing must mail a copy of the document to the property owner. This sounds simple, but it was not required before. The copy must be sent by certified mail. That way, there is a record of the notice being delivered.
The documents need to go to all addresses listed for the owner, including the home and any mailing address on file. If the person filing does not follow these steps, the filing holds no legal power. This cuts down on surprise filings. It also keeps the process transparent and fair for everyone in the transaction.
How Owners Can Challenge a Filing
Steps for Filing an Affidavit
House Bill 4063 gives owners an easy way to respond to improper filings. If an owner sees a filed memorandum they did not agree to, they can take action. The first step is to fill out a special form called an affidavit. This form will state that the owner challenges the memorandum. It lets the filer and the public know the claim is being disputed.
The property owner must also mail a copy of this affidavit to the person who filed the memorandum. This, too, must be sent by certified mail. Including proof of mailing is important. These steps allow the owner to defend their legal rights without needing a full court process. This offers peace of mind to many Texas property owners.
Important Timelines
Once the affidavit is mailed, the clock starts. The person who filed the memorandum has 45 days to respond. If no response comes in that time, the claim loses legal power. This time limit matters. It creates pressure on the party who made the claim to prove it is valid. If they do not respond, the memorandum no longer blocks or impacts the title.
For owners and investors, this offers relief. Instead of dragging out disputes for months, there is now a clear timeline. This helps protect pending real estate transactions. It also encourages honest dealings with clear communication. Those who file false claims will find it harder to slow down land deals going forward.
Legal Effect After Affidavit Filing
How Title Records Improve
When a memorandum is not answered within 45 days, it becomes legally weak. It will not be seen as a title issue anymore. This makes it easier for title companies to clear the way for sale or refinancing. Buyers will also feel more confident. They will not fear that their new property may have ghost claims on it.
Clean title records also help lenders. They can approve loans faster when no unexpected documents are on file. These changes bring clarity and fairness back into real estate transactions. HB 4063 helps future homeowners avoid delays from bad filings. It supports stronger land ownership rights across the state.
Responsibility Falls on the Filer
One of the sharpest changes in the law is who holds responsibility. In the past, owners had to prove a claim was false. Now, the person who filed the memorandum must prove it is true. They must respond with real proof or the claim goes away. This simple change stops abusive filing habits quickly.
If you work in real estate or manage property, this is a huge win. It lets you focus on buying or selling land instead of dealing with paperwork games. This rule change supports a fairer marketplace. Investors and lenders can now work faster, with cleaner records and stronger trust in each transaction.
Helping Lenders and Real Estate Investors
New Confidence in Transactions
Before this bill, lenders and investors had to double-check every filing. They often stopped dealing with property that had any memorandum listed. Now, HB 4063 makes that task easier. If a memorandum is missing the required notice steps, it holds no legal weight. That means it can be ignored during a title review.
This saves time, money, and prevents stress. It allows lenders to issue loans with fewer roadblocks. It also means investors can make offers more confidently. Texas lawyer and broker communities have waited for reforms like this. This law matches the rhythm of modern real estate transactions more closely.
Stopping Non-Compliant Documents
If someone tries to slip past the new rules, the document just does not stand up. Any memorandum that fails to meet these steps will not affect land deals. It will not block a sale, slow down due diligence, or scare off partners. This pushes bad actors out of the real estate process.
The law gives teeth to the whole process. It offers more safety to anyone trying to complete a deal. This matters most in fast markets like Houston, where real estate moves quickly. Clean records save time and reduce unwanted costs. These protections benefit everyone, from first-time buyers to large developers.
How HB 4063 Affects Future Transactions
Smoother Closings
By removing false filings earlier in the process, real estate closings become quicker. Title companies have fewer documents to question. Buyers face fewer surprises. This can cut the closing timeline by days or even weeks. Time saved is money saved in real estate.
This law also reduces back-and-forth between attorneys, brokers, and lenders. That kind of communication gap can lead to frustration or errors. The clearer title path helps everyone stay focused on finalizing the deal. HB 4063 helps buyers and sellers avoid unnecessary delays during property closings.
Investor Protection and Peace of Mind
Investors deal with many properties. They rely on quick and clear title research. When false claims are removed early, they can act faster. They can spend time on good deals, not on legal problems. This law makes investing in Texas residential property less risky.
Title issues scare off good deals. HB 4063 gives a safety line to real estate investors. If a deal looks good and the record is clean, they can proceed with confidence. If something looks off, the law tells them what to do. This keeps the investment process smooth and honest.
Smart Steps for Property Owners and Investors
Always Review Title Carefully
Property owners and buyers should always check title records. Look for any odd filings such as memorandums you did not sign. These may show up when you search the county clerk’s records. If you see one, take the right steps under HB 4063.
This is especially true for those buying residential property. Catching a problem early is the best way to protect your money. Pairing smart title research with common sense keeps your deal moving. A sharp eye now saves time and worry later. Always stay informed about Texas real estate filing rules.
Train Your Team on the New Law
If you have a team handling your real estate purchases, they should know the new rules. Teach them how the affidavit process works. Make sure they can spot problem filings. Create a checklist for document review. This helps protect you and your properties.
Remember, a team that knows HB 4063 well will save you delays. They can spot trouble and act fast. Sharing knowledge across your company builds stronger land deals. It also fosters trust between partners, clients, and vendors.
Follow Legal Guidelines When Filing
If you need to file a legal claim on a property, do it the right way. Follow every step in HB 4063. Mail copies, use certified mail, and keep records. Doing it right keeps your filing strong and fair. It also avoids getting your claim dismissed for technical errors.
Legal rules exist to keep deals fair. Respect them to protect your rights—and those of others. When the system works fairly, everyone benefits. As Texas continues to grow in population and real estate demand, smart filings matter more than ever.
Facing a Title Concern or Bad Filing?
HB 4063 offers new remedies—and we’ll help you use them to protect your investment.
Conclusion
House Bill 4063 solves a major issue in Texas real estate. It shuts the door on false filings and protects the record of ownership. The law keeps title records clear and helps real estate deals move forward smoothly. Whether you invest in land, manage property, or help clients close deals, knowing these rules makes you stronger in the market. If you need experienced support with title issues or oil law considerations, Daughtrey Law Firm is here to guide you carefully and clearly.
FAQs
What is a unilateral memorandum of contract in Texas real estate?
A unilateral memorandum is a document filed by a non-owner claiming a purchase-related interest in a property—often without the owner’s agreement.
Can a Texas property owner remove a filed memorandum of contract?
Yes. Under HB 4063, owners can file an affidavit to release the memorandum, and if uncontested for 45 days, the claim is nullified.
Does HB 4063 apply to commercial properties?
No. It specifically applies to residential properties, including single-family homes, duplexes, and condos.
What happens if the filer doesn’t respond to the affidavit within 45 days?
The memorandum becomes unenforceable, and the title is cleared of any claims made in the document.
As an investor, how do I know if a memorandum is enforceable?
Check if it complies with the filing and notice requirements under HB 4063. If it doesn’t, it’s not valid for enforcing any claim.
