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If you are a party to a contract for deed in Texas, you may be wondering what happens if one of the parties wants to cancel the agreement. A cancellation of contract for deed in Texas can be a complex process, but understanding some key information can help make it smoother. In this article, we will take a closer look at what a contract for deed is, reasons for a cancellation, and the steps involved in the cancellation process.

What is a Contract for Deed?

A contract for deed, also known as a land contract or an installment sale agreement, is a legal agreement where the seller finances the sale of a property to the buyer. In a contract for deed, the buyer makes payments to the seller over a set period until the purchase price is paid in full. During this time, the buyer holds equitable title while the seller retains legal title to the property. Once the purchase price is paid in full, the seller transfers the legal title to the buyer.

Reasons for Cancellation

There are several reasons why a party to a contract for deed may want to cancel the agreement. These reasons may include:

1. Breach of Contract: If one of the parties does not fulfill their obligations under the contract, such as making the required payments or maintaining the property, it can be grounds for cancellation.

2. Mutual Agreement: The parties may mutually agree to cancel the contract if they believe it is in their best interests to do so.

3. Non-Delivery of Deed: If the seller fails to deliver the deed to the property, the buyer may cancel the contract.

4. Failure to Record: If the contract for deed is not properly recorded or filed with the county, either party may be able to cancel the agreement.

Steps for Cancellation

To cancel a contract for deed in Texas, the party seeking cancellation must:

1. Review the Contract: Review the contract to determine the specific procedures for cancellation.

2. Provide Notice: The party seeking cancellation must provide written notice to the other party of their intent to cancel the contract.

3. File a Notice of Cancellation: The party seeking cancellation must file a Notice of Cancellation of Contract for Deed with the county in which the property is located.

4. Obtain a Release of Lien: Once the cancellation is complete, the buyer may need to obtain a Release of Lien from the seller, which will allow them to obtain legal ownership of the property.


As you can see, a cancellation of contract for deed in Texas can be a complex process. Understanding the reasons for cancellation and the steps involved can help make the process as smooth as possible. If you are considering cancelling a contract for deed, it may be wise to consult with an experienced real estate attorney to ensure that your rights are protected.