Texas Wholesaling Law: Occupations Code 1101.0045 + Telemarketing Regime (Bus. & Com. Code ch. 302/304)

State: Texas | Bills: Occupations Code 1101.0045 and Property Code 5.0205 (equitable-interest disclosure, from SB 2212, 2017; 5.0205 was redesignated from 5.086 by SB 1577, effective January 1, 2024), plus the telemarketing regime in Business and Commerce Code ch. 302 (registration) and ch. 304 (no-call), as amended by SB 140 (2025) | Effective dates: disclosure rule September 1, 2017; telemarketing regime April 1, 2009, with SB 140 amendments September 1, 2025; all in effect today | Applies to: any assignment or sale of an equitable interest in Texas real property (Rule 1); outbound calls and texts to Texas numbers (Rule 2) | Bottom line: You can still wholesale in Texas without a license. Disclose your equitable interest in writing to both the buyer and the owner, and sell your own contract position, not someone else's property. The telemarketing rules are older than SB 140 and regulate the phone: cold calling and texting can require registration, bonding, and no-call compliance, though whether they reach a buy-side cold call is untested.

Texas has TWO separate rules that members mix up constantly. Rule 1 governs the deal. Rule 2 governs the marketing. Keep them apart in your head.

What the Law Says (Plain English)

Rule 1: The Deal. Equitable-Interest Disclosure (Occupations Code 1101.0045 and Property Code 5.0205, since 2017)

Texas is one of the few states that wrote wholesaling INTO the law as a permitted activity. An equitable interest is what you own once you sign a purchase contract: not the house, just the contractual right to buy it. Under 1101.0045(a) you may acquire an option or an interest in a purchase contract and then sell or assign it without a real estate license, if two conditions hold:

1. You do not use the contract to engage in real estate brokerage. That is the actual statutory condition (1101.0045(a)(1)). "Brokerage" is defined elsewhere in the code as acting "for another" (Occ. Code 1101.002), so selling your own contract rights is principal activity and needs no license, while negotiating between a buyer and a seller who are not you, or marketing someone else's property, is brokerage and does need one.
2. You disclose the nature of your equitable interest in writing. Two statutes stack. Occ. Code 1101.0045(a)(2) requires you to "disclose in writing the nature of the equitable interest to any seller or potential buyer." Property Code 5.0205 separately requires written disclosure, before you contract to sell or assign, to BOTH the potential buyer (that you are selling only an option or assigning an interest and do not have legal title) AND the owner (that you intend to sell an option or assign an interest). The buyer must understand you are selling a contract position, not a house you own.

Miss the disclosure and you lose the safe harbor entirely: the statute deems selling or assigning without disclosing the nature of your interest to be "engaging in real estate brokerage" (1101.0045(b)), which for an unlicensed person is unlicensed brokerage, enforced by the Texas Real Estate Commission.

Rule 2: The Marketing. Cold Calls and Texts (Bus. & Com. Code ch. 302 and ch. 304)

Texas has regulated phone marketing since 2009, in two chapters of the Business and Commerce Code. This is the part members most often misattribute to SB 140. It is older than SB 140.

• Chapter 302 is the registration regime. A "seller" may not make a telephone solicitation to a Texas number without a registration certificate from the Secretary of State (302.101). Getting one means a $200 filing fee (302.106), a $10,000 security (surety bond, letter of credit, or certificate of deposit; 302.107), and quarterly salesperson addenda (302.105). Section 302.001(7) defines a telephone solicitation as "a call or other transmission, including a transmission of a text or graphic message or of an image, initiated by a seller or salesperson to induce a person to purchase, rent, claim, or receive an item."
• Chapter 304, the Texas Telemarketing Disclosure and Privacy Act, is the no-call (DNC) regime. No telemarketing calls to numbers on the Texas no-call list more than 60 days after they appear (304.052), plus caller-ID rules (304.151).

What SB 140 actually changed in 2025 is narrow. It did not build the registration or DNC regime. It did two things: (1) it swept texts, SMS, and images into the definition of "telephone solicitation" and struck the word "telephone" before "call," so a plain "call" and a text now both count (302.001(7)); and (2) it made a violation of ch. 304 a false, misleading, or deceptive act under the Deceptive Trade Practices Act, with a private right of action (new 304.2581, effective September 1, 2025). Chapter 302 violations were already a DTPA violation under 302.303.

Does any of this even reach a wholesaler's BUY-side cold call? Genuinely untested. The ch. 302 registration trigger keys on a "seller or salesperson" soliciting someone to "purchase, rent, claim, or receive an item" (302.001). A wholesaler cold-calling to BUY a house is arguably neither a "seller" nor inducing the homeowner to "receive an item." The ch. 304 no-call rules, which turn on an "unsolicited telephone call" to a consumer, more plausibly reach a cold call to buy. Both chapters plausibly apply, and no Texas regulator or court has resolved it for buy-side wholesaler outreach. A federal court in Arizona held that offers to buy are not solicitation under the federal TCPA, but that interprets federal law only. Treat cold outreach as covered and comply, but know the edge is untested.

If you keep doing cold outreach to Texas numbers, register with the Secretary of State, post the $10,000 security, scrub the Texas and national no-call lists, and keep records. The full checklist is below. This applies no matter where the caller sits: an overseas calling agency dialing Texas numbers still puts liability on you.

What You CANNOT Do

Under Rule 1 (the deal):

• Sell or assign a contract without written disclosure, to both the buyer and the owner, that you hold only an equitable interest and not legal title
• Advertise the house as if you own it ("House for sale, $180K, call me") with no disclosure. Without the disclosure the statute deems the activity to be engaging in real estate brokerage (1101.0045(b))
• Negotiate deals between other parties for a fee. That is acting "for another" (the broker definition, Occ. Code 1101.002) and requires a license no matter what you disclose

Under Rule 2 (the marketing), unless registered and compliant:

• Cold call or cold text skip-traced Texas numbers, including ringless voicemail, dialers, and SMS blasts
• Call a number that has been on the Texas no-call list for more than 60 days (304.052)
• Text anyone without prior express written consent (this is a federal TCPA rule, not Texas ch. 302/304, but it applies on top)
• Outsource the calls overseas and assume the law no longer applies. It does, because the message lands in Texas and you profit from it

Note on calling hours: Texas ch. 302 and ch. 304 set NO time-of-day limit. The 8 a.m. to 9 p.m. quiet-hours rule that applies to your calls comes from FEDERAL law, the Telemarketing Sales Rule (16 C.F.R. 310.4(c)), measured at the called party's local time. Do not tell yourself Texas sets the hours; the federal rule does.

What You CAN Still Do

• Wholesale by assignment, license-free, with written disclosure. Texas remains one of the friendliest states in the country for the deal itself
• Market your contract, not the property. "Assignable purchase contract for sale" instead of "house for sale"
• Run inbound marketing without touching the telemarketing regime. Direct mail, Facebook ads, Google PPC, pay per lead, SEO, TV, radio, billboards. The ch. 302 definition requires a call or transmission "initiated by a seller or salesperson," so when the seller contacts you first there is no solicitation, and you can negotiate freely from there
• Door knock and meet face to face. Both chapters regulate calls and electronic transmissions (a "call or other transmission" in ch. 302; a "telephone call" in ch. 304), not in-person contact, so door knocking is outside their text
• Keep cold calling IF you register and comply with the full checklist below
• Call your existing and former customers. Chapter 304 exempts calls made in connection with an established business relationship (304.004(2)), and ch. 302 exempts soliciting a former or current customer if you have operated under the same business name for at least two years (302.058)

The Loopholes

1. The Statutory Safe Harbor Itself (Clean)

Rule 1 is a loophole written into law. Disclose the equitable interest in writing to both the buyer and the owner, do not use the contract to broker for another, and unlicensed wholesaling is expressly permitted. Cost: one paragraph of disclosure language in your paperwork. The statute (1101.0045 and 5.0205) requires only that the disclosure be "in writing." It prescribes no exact wording, no separate document, no font size, no signatures, no waiting period, and no deal cap.

2. Market the Contract, Not the Property (Clean, paired with disclosure)

Selling or assigning without disclosing the nature of your interest is what the statute deems to be unlicensed brokerage (1101.0045(b)). So advertise what you actually own: an assignable contract. Never list the property itself as if you were the owner or an agent.

3. Inbound Marketing Escapes the Telemarketing Regime Entirely (Clean)

The ch. 302 definition requires a call or transmission "initiated by a seller or salesperson." When the homeowner initiates (calls the number on your mailer, fills out your ad's form), there is no solicitation, and ch. 304's no-call rules only reach an "unsolicited" call. This is the structural answer for most members: shift budget from cold outreach to direct mail, PPC, Facebook ads, and pay per lead, and the telemarketing regime never applies to you. Cost: inbound marketing is more expensive per lead than cold calling.

4. Door Knocking, Referrals, and B2B Outreach (Gray, but well grounded)

In-person outreach is outside both chapters on their text: ch. 302 reaches only a "call or other transmission" and ch. 304 only a "telephone call," neither of which covers knocking on a door. Outreach to real estate agents and attorneys also has a statutory hook: ch. 304 does not apply to a call between a telemarketer and a business unless the business says it does not want the calls (304.004(3)). These readings are well grounded now, but the buy-side coverage question above is still untested, so keep it professional and get an attorney's sign-off before scaling a door-knocking or agent-outreach machine.

5. Register and Comply (Clean, the brute-force path)

Cold calling and texting stay legal for registered, compliant operators. If cold outreach is your engine, this is the honest path, and the compliance burden itself will thin out your competition. See the checklist below.

What does NOT work:

• Relying on the Arizona federal TCPA ruling. It interprets federal law; the Texas chapters stand on their own.
• Hiding behind an overseas call center. Liability lands on you.
• Claiming the ch. 302 "isolated transaction" exemption (302.061). It covers a one-off solicitation "not done in the course of a pattern of repeated transactions." A cold-calling business is the opposite of isolated, so it does not protect you.
• Claiming the ch. 304 "state licensee" exemption (304.004(5)). It applies only to a person licensed by a state agency (and even then only with no autodialer and a face-to-face closing). An unlicensed wholesaler is not a state licensee, so it does not help.

If You Keep Cold Calling or Texting: The Compliance Checklist

Practical checklist drawn from Texas ch. 302/304 and the overlapping federal rules. Where a step is federal, not Texas, it is flagged:

1. Register and bond (ch. 302). File the registration statement with the Texas Secretary of State (the SoS prescribes the form), pay the $200 filing fee (302.106), post the $10,000 security as a surety bond, letter of credit, or certificate of deposit (302.107), and renew annually (302.104). File the quarterly salesperson addenda (302.105)
2. Build an internal do-not-call list. Honor every opt-out immediately, verbal or written, and keep opt-out records at least 5 years
3. Scrub before every campaign against the National DNC Registry and the Texas no-call list (kept by the Public Utility Commission; ch. 304), and document when and how you scrubbed. The Texas list bars calls to a number that has been on it for more than 60 days (304.052)
4. Follow the federal calling hours. Texas ch. 302/304 impose NO time-of-day limit. The 8 a.m. to 9 p.m. window comes from the FEDERAL Telemarketing Sales Rule (16 C.F.R. 310.4(c)), measured at the called party's local time. Program your dialer or CRM to block everything outside it
5. Identify yourself properly. First and last name, business name, that you are calling about buying their property, and a callback number that reaches a live person
6. Get prior express written consent before texting (federal TCPA). Consent language must include clear agreement to receive texts, message and data rate disclosure, and opt-out instructions (Reply STOP). Keep the consent proof
7. Keep records at least 5 years: every call and text, consent records, DNC scrubs, opt-outs
8. Train your team (VAs, cold callers, acquisitions) on DNC compliance, opt-outs, and disclosures, and have them sign a compliance acknowledgment
9. Audit monthly. Review call logs, text campaigns, and random call recordings; update your process when rules change
10. Manage the risk. Carry E&O insurance that covers telemarketing claims and use call tracking software to document consent, because private DTPA lawsuits (302.303 for ch. 302, 304.2581 for ch. 304) are the real threat

Penalties If You Violate It

The telemarketing regime (ch. 302 and ch. 304). These are two separate doors, and the page used to blur them:

• Attorney General civil penalty, up to $5,000 per violation (ch. 302). Making telephone solicitations without the required registration lets the Attorney General sue for a civil penalty of up to $5,000 for EACH violation (302.302), plus an injunction (302.301). At up to $5,000 each, a 1,000-number blast is up to $5,000,000 in AG civil penalties alone. Violating the injunction adds up to $25,000 per violation and $50,000 total (302.302(b))
• Class A misdemeanor for knowingly soliciting without registering (302.251). This is real, in the statute, not single-sourced
• Private DTPA lawsuits, SEPARATE from the AG penalty. A ch. 302 violation is a false, misleading, or deceptive act under the Texas Deceptive Trade Practices Act (302.303, in the statute since 2009), and SB 140 made a ch. 304 violation a DTPA violation too (304.2581, effective September 1, 2025). That opens a private right of action with treble (triple) damages for knowing conduct. The homeowner sues you directly; no regulator needed
• No-call (DNC) penalties (ch. 304). Calling a number on the Texas no-call list carries an administrative or AG civil penalty of up to $1,000 per violation, rising to up to $3,000 per violation if wilful or knowing (304.251, 304.252). A consumer on the no-call list who is called more than once has a narrow private action for up to $500 per wilful violation (304.257)

Do not conflate the two: the Attorney General pursues the $5,000 (ch. 302) and $1,000/$3,000 (ch. 304) civil penalties; private plaintiffs pursue DTPA damages. They stack, they do not substitute.

Occupations Code 1101.0045 and Property Code 5.0205 (the deal):

• Failure to disclose kills the safe harbor and converts the deal into unlicensed brokerage. The statute deems selling or assigning without the disclosure to be "engaging in real estate brokerage" (1101.0045(b)), enforced by the Texas Real Estate Commission, plus DTPA exposure if the conduct misled anyone

Required Disclosure Language

Texas mandates the CONTENT of the equitable-interest disclosure, not any exact script. Two statutes stack:

• Occupations Code 1101.0045(a)(2): you must "disclose in writing the nature of the equitable interest to any seller or potential buyer."
• Property Code 5.0205: before you enter a contract to sell an option or assign an interest in a purchase contract, you must disclose in writing to (1) "any potential buyer that the person is selling only an option or assigning an interest in a contract and that the person does not have legal title to the real property," and (2) "the owner of the real property that the person intends to sell an option or assign an interest in a contract."

So the required content is: that you hold only an equitable interest or option and not legal title, and that you are selling or assigning that contract position, disclosed in writing to BOTH the buyer and the owner, before you enter the contract to sell or assign. No statute prescribes exact wording, a font size, a separate document, or signatures. Put it in plain writing in your contract and assignment paperwork and deliver it before signing.

Quick Reference

This is an analysis, not legal advice. Confirm your deal structure and your outreach system with a Texas real estate attorney, especially before running any cold call or SMS campaign.

Sources: the Texas statutes themselves, quoted above (Occupations Code 1101.0045; Property Code 5.0205, redesignated from 5.086 by SB 1577; Business and Commerce Code ch. 302 and ch. 304, as amended by SB 140), plus a third-party industry report, the Google deep research report, and Chico report 1.2 for the Texas section.