A seller provides a completed Seller's Disclosure Notice to the buyer. The buyer receives it after signing the purchase contract. According to Texas law, what are the buyer's rights in this situation?
- AThe buyer can terminate the contract within 7 days of receiving the notice, but only if a material defect is revealed.
- BThe buyer has no recourse as they signed the contract before receiving the disclosure.
- CThe buyer can terminate the contract for any reason within 7 days of receiving the notice.
- DThe buyer has 7 days to terminate the contract after receiving the disclosure, or before closing, whichever is earlier, without penalty.
Show answer & explanationAnswer & explanation
Correct answer: D. The buyer has 7 days to terminate the contract after receiving the disclosure, or before closing, whichever is earlier, without penalty.
Texas Property Code §5.008 grants the buyer a statutory right to terminate the contract within 7 days after receiving the Seller's Disclosure Notice, or prior to closing, whichever occurs first, if the notice is provided after the effective date of the contract. This termination right is without cause or penalty.
Why the other options are wrong
- A. This incorrectly limits the termination right to only if a defect is revealed; the right is available regardless of content.
- B. This is incorrect; Texas law provides specific remedies for late delivery of the disclosure.
- C. The termination right is not conditional on a material defect being revealed; it's a statutory right for late delivery.
Late Disclosure Termination Right
If a seller's disclosure notice is delivered after the effective date of a contract, the buyer has a statutory right to terminate the contract within 7 days of receipt, or prior to closing, whichever is earlier, without penalty.
- Applies if disclosure is delivered AFTER contract effective date.
- Buyer has 7 days from receipt to terminate.
- Or prior to closing, whichever occurs first.
- Termination is without cause or penalty.
Memory trick: Late disclosure, 7 days or close, buyer's choice, no woes.