Didn’t Get the Seller’s Disclosure? A Texas Buyer’s Right to Terminate

Most Houston buyers get the Seller’s Disclosure Notice with the rest of the paperwork, skim it for anything alarming, and move on. What almost nobody knows is that the contract gives them a seller’s disclosure right to terminate that has nothing to do with the option period, costs nothing to use, and refunds the earnest money in full. It only comes up when the disclosure shows up late or never shows up at all, which happens more often than you’d think. Here’s how that right works, what the notice is actually telling you, and how I read one before a client writes an offer.

The short version: Paragraph 7B of the Texas contract has three boxes. If you’ve already received the disclosure, box one is checked and nothing further happens. If you haven’t, box two gives the seller a set number of days to deliver it — and if it never arrives you may terminate any time before closing, earnest money refunded. If it does arrive late, you get 7 days from the day you receive it to terminate for any reason at all. That is a second exit, entirely separate from your option period.

What the notice is, from the buyer’s side of the table

The Seller’s Disclosure Notice is the form where a seller writes down what they know about the house — the systems, the past repairs, the flooding history, the insurance situation. Texas Property Code §5.008 requires it from the seller of a single dwelling unit, delivered to the buyer on or before the effective date of the contract. If you want the seller’s-eye view of what goes on it and who’s exempt from providing one, I wrote that up in what Texas sellers actually have to disclose.

Read the box printed in capitals at the top of the form before you read anything else. It tells you exactly how much weight the document carries:

“THIS NOTICE IS A DISCLOSURE OF SELLER’S KNOWLEDGE OF THE CONDITION OF THE PROPERTY AS OF THE DATE SIGNED BY SELLER AND IS NOT A SUBSTITUTE FOR ANY INSPECTIONS OR WARRANTIES THE BUYER MAY WISH TO OBTAIN. IT IS NOT A WARRANTY OF ANY KIND BY SELLER, SELLER’S AGENTS, OR ANY OTHER AGENT.”

Knowledge, as of a date, and no warranty. A seller has a duty to disclose what they know. Nothing obligates them to go find out. So a page of unchecked boxes can mean the house is sound, or it can mean the seller bought it in 2022 and genuinely has no idea what happened in 2017. Those two situations look identical on paper, and the form will not help you tell them apart. That’s what your option period is for.

The seller’s disclosure right to terminate, in Paragraph 7B

Paragraph 7B of TREC form 20-19 handles delivery of the notice, and it’s one of the few paragraphs where the buyer holds every card. There are three boxes and only one gets checked.

Box 1 — you already have it. The overwhelming majority of Houston transactions. The listing agent attaches the disclosure to the MLS entry, you read it before you write, and the box confirms receipt. No clock starts because nothing is outstanding.

Box 2 — you don’t have it yet. This is the one worth understanding. The seller fills in a number of days to deliver it, and the contract then says, in language worth quoting exactly:

“If Buyer does not receive the Seller’s Disclosure Notice, Buyer may terminate this contract at any time prior to the closing and the earnest money will be refunded to Buyer. If Seller delivers the Seller’s Disclosure Notice, Buyer may terminate this contract for any reason within 7 days after Buyer receives the Seller’s Disclosure Notice or prior to the closing, whichever first occurs, and the earnest money will be refunded to Buyer.”

Those two sentences carry different rights. If the disclosure never comes, your exit stays open all the way to closing. If it comes late, a fresh 7-day window opens on the day you receive it, and inside that window you can terminate for any reason at all. The reason does not have to be anything you read on the form. You could terminate because the disclosure was perfectly clean and you simply changed your mind about the house. The earnest money comes back either way.

Box 3 — the seller isn’t required to provide one. Estate sales, foreclosures, some transfers between family members, and never-occupied new construction. If this box is checked, confirm the exemption actually applies, and treat the inspection as carrying more weight than usual, because you’re buying without the seller’s knowledge written down anywhere.

How this differs from your option period

Buyers conflate these constantly, and they are genuinely different tools. The option period is Paragraph 5B: you pay a negotiated option fee, you get an unrestricted right to terminate within the days you negotiated, and notice is due by 5:00 p.m. on the last day. It costs money and it expires quickly. I covered how to count those days in how the Texas option period actually works.

The 7B right costs nothing, isn’t negotiated, and runs on its own clock — one that doesn’t even start until the disclosure lands in your hands. On a transaction where the seller is slow with paperwork, it is entirely possible for your option period to expire while a live 7B right is still sitting there unused. That’s the scenario worth remembering, because at that point most buyers believe they have no way out, and they’re wrong.

How I read a disclosure before we write

Here’s what I do, and it takes about fifteen minutes.

• Read Sections 5 through 9 as one story. Insurance coverage, claims filed, proceeds received, flooding history, federal aid. Each is a separate question and together they either corroborate each other or they don’t. A filed claim with no corresponding repair is the sort of gap worth asking about directly.
• Check whether “wholly” or “partly” is marked on the floodplain questions. On plenty of Houston lots the back fence sits in the floodplain and the slab doesn’t, and “partly” changes what you’re buying. The full walkthrough is in how to read the flood questions on a Texas disclosure.
• Treat “unknown” as a question, not an answer. It’s a legitimate response, and on an inherited or investor-owned house you’ll see a lot of it. Every one of them is something your inspector should look at harder.
• Note the date the seller signed it. The disclosure speaks as of that date. If it was signed eight months ago and the house has been through a Houston summer since, ask whether anything has changed.

None of this replaces an inspection, and it isn’t meant to. What it does is tell your inspector where to spend their time, and tell you which questions to ask while you still have a way out of the contract that costs you nothing.

If the disclosure is late, do this

Say the delivery deadline passes and nothing arrives. Ask for it in writing, so the date of the request is documented. If it then shows up, note the date you received it and count seven days forward — that’s your window, and it’s the whole window. If it never shows up, you keep the right to terminate all the way to closing, though I would not leave that sitting unused while you spend money on an appraisal and an inspection.

One practical note: a termination under 7B is a notice, and notices under this contract need to be delivered the way the contract requires. Have that five-minute conversation with your real estate agent and your title company early, so nobody is improvising on the last afternoon.

Last updated: August 2026 · Paragraph references are to TREC form 20-19, adopted May 4, 2026 and mandatory for Texas license holders beginning July 1, 2026; disclosure references are to the Texas REALTORS® Seller’s Disclosure Notice, form TXR 1406 (06-15-26). This is general information about the contract forms, not legal advice. For a specific property and a specific deadline, talk with your title company or a Texas real estate attorney. The current promulgated forms are posted at TREC.

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