Texas Seller's Disclosure Notice Exemptions: The 11 Transfers Exempt Under Property Code § 5.008(e)

Texas Property Code § 5.008(e) lists eleven categories of real property transfers that fall outside the Seller's Disclosure Notice requirement entirely — on these transfers, the seller doesn't have to complete or deliver TREC Form 55-1 (or a notice substantially similar to it) at all, because the underlying transfer itself is exempt from § 5.008. This is a statute-level exemption list, not a TREC form provision — the companion guide to TREC 55-1 covers what's on the notice; this page covers when the notice isn't required in the first place. This page describes what the statute says. It is not legal advice. Whether a specific transaction fits one of these categories is a fact question — consult a Texas real estate attorney before relying on an exemption to skip the disclosure notice.

What creates the duty to disclose in the first place

Under § 5.008(a), a seller of "residential real property comprising not more than one dwelling unit" in Texas must give the purchaser a written notice — either the form prescribed by the statute or one substantially similar that contains, at minimum, all the same items. The eleven exemptions in subsection (e) work by exempting the underlying transfer, not by exempting particular sellers or particular defects. If a transaction fits one of the eleven categories, § 5.008 doesn't apply to that transfer at all — there's no notice to complete, no items to check, nothing to deliver.

The 11 exempt transfers under § 5.008(e)

Section 5.008(e) states: "This section does not apply to a transfer:" followed by eleven numbered categories. Quoted directly from the statute:

1. Court order or foreclosure sale. A transfer "pursuant to a court order or foreclosure sale."
2. Bankruptcy trustee. A transfer "by a trustee in bankruptcy."
3. Borrower to lender (deed in lieu). A transfer "to a mortgagee by a mortgagor or successor in interest, or to a beneficiary of a deed of trust by a trustor or successor in interest" — the borrower deeding the property back to the lender.
4. Lender reselling foreclosed/REO property. A transfer "by a mortgagee or a beneficiary under a deed of trust who has acquired the real property at a sale conducted pursuant to a power of sale under a deed of trust or a sale pursuant to a court ordered foreclosure or has acquired the real property by a deed in lieu of foreclosure" — the lender reselling property it already took back through foreclosure or a deed in lieu.
5. Estate, guardianship, conservatorship, or trust administration. A transfer "by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust."
6. Co-owner to co-owner. A transfer "from one co-owner to one or more other co-owners."
7. Spouse or lineal relative. A transfer "made to a spouse or to a person or persons in the lineal line of consanguinity of one or more of the transferors."
8. Divorce or legal separation. A transfer "between spouses resulting from a decree of dissolution of marriage or a decree of legal separation or from a property settlement agreement incidental to such a decree."
9. Government transfers. A transfer "to or from any governmental entity."
10. New, never-occupied construction. A transfer "of a new residence of not more than one dwelling unit which has not previously been occupied for residential purposes."
11. Dwelling value under 5% of property value. A transfer "of real property where the value of any dwelling does not exceed five percent of the value of the property" — for example, raw land or a ranch where a small structure is incidental to the property's overall value.

Two related, but different, provisions in the same section

Two other parts of § 5.008 are sometimes confused with the (e) exemption list but work differently — they don't exempt the transfer, they narrow what a required notice has to cover or when it must arrive:

• § 5.008(c) — no duty on death or HIV/AIDS status. Even on a transfer where the disclosure notice is otherwise required, "a seller or seller's agent shall have no duty to make a disclosure or release information related to whether a death by natural causes, suicide, or accident unrelated to the condition of the property occurred on the property or whether a previous occupant had, may have had, has, or may have AIDS, HIV related illnesses, or HIV infection." This is a carve-out of specific subject matter from an otherwise-required notice — not a transfer-level exemption.
• § 5.008(f) — delivery timing and the buyer's termination right. On a transfer where the notice is required, "the notice shall be delivered by the seller to the purchaser on or before the effective date of an executory contract binding the purchaser to purchase the property." If a contract is signed without the seller providing the notice, "the purchaser may terminate the contract for any reason within seven days after receiving the notice." That termination right doesn't come up on an (e)-exempt transfer, because no notice was ever required to trigger it.

Why this matters for a TC or listing agent

On a routine owner-occupant resale, § 5.008(e) rarely comes up — the notice is required and the checklist in TREC 55-1 governs. The exemptions matter on the transaction types where they show up repeatedly: estate sales (exemption #5), builder sales of spec homes (exemption #10), REO or bank-owned listings (exemptions #3 and #4), and family transfers like a parent deeding a house to an adult child (exemption #7). Confirming which exemption applies — and documenting why — is a fact-specific legal determination. This page describes the statute's categories; it does not tell you whether a specific file qualifies.