Tex. Prop. Code Ann. §§ 223.001–223.007 § 223.003
AGREEMENTS AND RULES.
Operative Text
Sec. 223.003. AGREEMENTS AND RULES. (a) An agreement for the purchase of an interest in a managing entity must disclose to the purchaser that the agreement is for the purchase of an interest in the entity and not in any residential property itself.(b) The purchase agreement and any other agreement or rules governing the residential arrangement or the ownership interest in the entity may not require that a dispute concerning the arrangement or interest be brought before a tribunal other than a court established under the laws of this state or the United States. Added by Acts 2025, 89th Leg., R.S., Ch. 1096 (H.B. 4211), Sec. 1, eff. June 20, 2025.
Under Texas Property Code § 223.003, when someone buys an interest in a managing entity tied to a residential arrangement, the purchase agreement must clearly disclose that the buyer is acquiring an ownership stake in the entity itself — not a direct interest in any real property. Additionally, no agreement or rules governing the arrangement may force disputes into a private tribunal; any dispute must be eligible to be heard by a Texas state court or a federal court. This provision, effective June 20, 2025, establishes baseline transparency and access-to-courts protections for these types of residential arrangements.
Plain English — not legal advice.
Operators and managing entities subject to Tex. Prop. Code § 223.003 generally ensure that all purchase agreements for ownership interests contain a clear, prominent disclosure stating that the buyer is purchasing an interest in the entity — not in the underlying real property. Compliant operators also review their agreements and governing rules to confirm that no clause channels dispute resolution exclusively to a private arbitration body or non-judicial tribunal, since any such clause would conflict with this provision. Maintaining updated agreement templates that reflect these requirements is a common practice for operators working with residential arrangements under Chapter 223.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Tex. Prop. Code § 223.003 provides important protections for individuals entering residential arrangements through a managing entity: the purchase agreement must tell you upfront that you are buying into the entity, not acquiring a direct property interest. Equally significant, no agreement or set of rules can strip away your right to bring a dispute before a Texas state court or a federal court. If you believe an agreement you signed violates § 223.003 — for example, by omitting the required disclosure or by mandating a private tribunal — tenant-rights organizations and legal aid resources can help you understand the general options available under this provision.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 28, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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