Chambers County v. TSP Development, Ltd
In Chambers County v. TSP Dev., Ltd., 63 S.W.3d 835, 838 (Tex. App.-Houston 14th Dist. 2001, pet. denied), the issue was whether a contract pertaining to the sale of land was an option contract or a contract for sale, the latter of which would confer standing on a party to raise a takings claim under the Private Real Property Rights Preservation Act. Chambers County, 63 S.W.3d at 837 (citing TEX. GOV'T CODE ANN. 2007.001-.045 (Vernon 2000)) .
The act allows a person with legal or equitable title to land to sue for a taking. Id. at 837-38 (citing TEX. GOV'T CODE ANN. 2007.002(2) (Vernon 2000)).
In concluding the contract was an option contract and not one for sale, the court relied on several characteristics of the contract. First, the only remedy to the seller on default of the buyer was retention of the deposit. Id. at 839.
Second, the language of the contract was prospective. Id.
That is, the contract said, "Seller agrees to sell and Buyer agrees to buy . . ." instead of "Seller(s) 'sells and agrees to convey . . . .'" Id.
Third, the contract left open various terms of sale for future determination. Id. at 839-40.
Fourth, the contract stated throughout that time was of the essence and contained clauses stating that if the land was not purchased before a specific date, an additional deposit would be required. Id. at 839-40.
The court added that "time being of the essence is a hallmark of the option contract." Id. at 840 (citing Smith v. Hues, 540 S.W.2d 485, 488 (Tex. Civ. App.-Houston 14th Dist. 1976, writ ref'd n.r.e.)).
After finding the contract was an option contract, the court concluded the buyer did not have equitable title and, thus, had no standing to bring his suit. Id.