To sell part of a Texas tract that secures a loan, you generally need the lender to agree to release its lien on that piece so the buyer gets clear title. The split may also need a plat and a new survey, and the part sold can owe rollback tax if its use changes.
Selling a few acres off a larger tract sounds simple until you remember the loan. When you borrowed, the lender took a lien on the whole property, not on the part you plan to keep. A buyer of the piece you are selling will want it free of that lien. Getting there takes the lender's cooperation, a clean legal description and, in many places, a plat.
This guide explains the statewide rules: why the lender is involved, how a partial release fits into a sale, when Texas law requires a plat, and how property taxes treat the piece you sell. If your land is in Tarrant, Dallas, Collin or Denton County, our DFW guide to selling part of mortgaged land covers the local plat offices and recording requirements.
Why selling a piece involves the whole loan
Read the transfer clause in your deed of trust first. In the standard Texas deed of trust used for loans sold to Fannie Mae and Freddie Mac (Form 3044), Section 19 says that if all or any part of the property is sold or transferred without the lender's prior written consent, the lender may require immediate payment in full. If the lender uses that right, it must give a notice allowing at least 30 days to pay.
Federal law backs that kind of clause. The Garn-St Germain Act, at 12 U.S.C. 1701j-3, defines a due-on-sale clause as one that lets a lender call the loan if all or any part of the property is sold or transferred without its consent, and it lets lenders enforce those clauses, subject to listed exceptions.
Not every land loan uses Form 3044. A farm loan, a commercial loan or a seller-financed note may use different language. Whatever form you signed, the safe assumption is that the lender has a say before any part of the land changes hands.
Documents to pull before you call anyone: your note, your recorded deed of trust (look for the transfer or due-on-sale section and any release provision), your recorded deed, any survey, and your appraisal district record. If your loan documents mention partial releases, read that language closely.
The buyer needs clear title to its piece
The TREC land contract assumes the seller can deliver clean title. Under paragraph 9B of TREC No. 9-18, the seller signs a general warranty deed showing no exceptions beyond those the contract allows, and no liens may remain that are not paid from the sale proceeds, other than loans the buyer agreed to assume. Releasing existing liens, including the recording fees, is a seller expense under paragraph 12A(1)(a).
When you sell the whole tract, the title company pays off the loan at closing and the lender releases its lien. When you sell only part, a full payoff may not make sense. The usual answer is a partial release: a recorded document in which the lender releases its lien on the piece being sold while keeping it on the rest.
A partial release is the lender's decision
The standard Texas deed of trust does not promise a partial release. Section 27 of Form 3044 says the lender will provide a release upon payment of all sums secured. Anything less than a full payoff is a request, and the lender can say yes, say no or set conditions. Your own loan documents may say otherwise, so check them.
Call your loan servicer before you sign a contract. Questions worth asking:
- Will you consider a partial release for this piece of the property?
- What payment toward the loan will you require in exchange, if any?
- Will you need an appraisal of the land that remains as collateral?
- What legal description or survey do you need for the release?
- What fees apply, and how long does approval usually take?
- Who prepares and records the release document?
Get the lender's answers in writing. Many sellers then make the sale contract contingent on receiving the release, so they are not bound to close if the lender refuses. A Texas real estate attorney can draft that condition.
Does dividing the land require a plat?
Selling a piece is a division of your tract, and Texas plat law turns on where the land is and how big the pieces are.
- Inside a city or its extraterritorial jurisdiction (ETJ). Local Government Code Section 212.004 requires a plat when an owner divides a tract into two or more parts. That applies even when the division is made by a metes and bounds deed or a contract for deed. It does not include parts larger than five acres when each part has access and no public improvement is dedicated.
- Outside city limits. Section 232.001 lets the county require a plat for a subdivision. Section 232.0015 lists cases where a county cannot require one, including when all the lots are more than 10 acres and nothing is dedicated to public use; when the land will be used mainly for agriculture; when four or fewer parts go to relatives within the third degree; and when one part is kept and the other goes to a buyer who will subdivide it further.
Plat review has deadlines. Under Section 212.009, a city must approve, approve with conditions or disapprove a filed plat within 30 days, or it is approved, subject to listed extensions. Property Code Section 12.002 bars using a subdivision's description in a deed or contract until the plat is approved and recorded, though a contract may be made expressly contingent on plat approval.
Skipping a required plat has a practical cost. Section 212.012 bars cities and utility providers from connecting water, sewer, electric, gas or other service to land without a certificate showing the plat rules were met. A buyer who cannot get utilities will not close.
Survey the piece you are selling
The part you sell needs its own legal description. Unless it is already a platted lot, that usually means a metes and bounds description from a registered professional land surveyor. The same description should appear in the contract, the lender's partial release and the deed.
Under paragraph 6C of 9-18, the parties choose who orders and pays for the survey. Paragraph 3D lets the price adjust per acre if the surveyed acreage differs from the contract figure, and either side may terminate if the price adjustment is more than 10%. TREC's Farm and Ranch Contract (No. 25-17) is generally used for rural land described by metes and bounds, which fits many partial-tract sales.
Property taxes on the part you sell
If the land has an agricultural or open-space valuation, selling part of it raises three tax questions.
- Rollback on the piece. Under Tax Code Section 23.55(d), if the use changes on only part of a parcel, the additional tax applies only to that part. It covers the three years before the year of the change.
- Who pays. Paragraph 13B of 9-18 puts rollback on the buyer if the sale or the buyer's use causes it, and on the seller if the seller's own use before closing causes it. You can agree to a different split.
- Reapplying. The buyer of the piece generally files a new application under Section 23.54(e). Your remaining land keeps its valuation only if it still meets the use requirements on its own.
The contract for vacant land also needs the bold-faced tax notice in Property Code Section 5.010, unless a separate paragraph says who pays any additional taxes.
A workable order of steps
- Read your deed of trust and call the lender about a partial release.
- Find out whether the division needs a plat and from which office.
- Order a survey of the piece you plan to sell.
- Ask a Texas real estate attorney about making the contract contingent on the lender's release and, if needed, plat approval.
- Open title so the commitment shows what must be released.
- At closing, record the deed and the partial release together.
For the broader land sale process, see selling vacant land in Texas and how to sell land fast. Browse more in our land guides.
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Frequently asked questions
Can I sell part of my land while it still has a mortgage?
Often, but the lender has to cooperate. The standard Fannie Mae and Freddie Mac Texas deed of trust lets the lender demand full payment if all or any part of the property is transferred without its written consent, so the usual path is a lender-approved partial release.
Does my lender have to give me a partial release?
Not under the standard Texas deed of trust, which promises a release when all sums secured are paid. Releasing part of the land before then is up to the lender unless your own loan documents say otherwise.
Do I need a plat to sell off part of my tract?
It depends on location and size. In a city or its ETJ, a plat is generally required unless every part is over five acres with access and no public dedication. Outside cities, counties cannot require one in listed cases, such as when every lot is over 10 acres with no public dedication.
Will selling part of my ag land trigger rollback on all of it?
No. Tax Code Section 23.55(d) says that when the use changes on only part of a parcel, the additional tax applies only to that part.
Sources
- Fannie Mae/Freddie Mac Texas Deed of Trust, Form 3044 (Sections 19 and 27)
- 12 U.S.C. 1701j-3, Preemption of due-on-sale prohibitions
- Texas Real Estate Commission, Unimproved Property Contract TREC No. 9-18 (paragraphs 3D, 6C, 9B and 12A)
- Texas Local Government Code, Chapter 212 (Secs. 212.004, 212.009 and 212.012)
- Texas Local Government Code, Chapter 232 (Secs. 232.001 and 232.0015)
- Texas Property Code, Chapter 12 (Sec. 12.002)
- Texas Tax Code, Chapter 23 (Secs. 23.54 and 23.55)
- Texas Property Code, Chapter 5 (Sec. 5.010 additional tax notice)
General information, not legal or tax advice. Talk to a Texas attorney or CPA about your situation.