Enforcement of option contract after death of a party

In Wells v. Dotson, 261 S.W.3d 275 (Tex. App.—Tyler 2008, no pet. h.), Decedent entered into a lease with an option to purchase with Lessee.  After Decedent’s death, Lessee notified Executor that he wanted to exercise the option to purchase.  Decedent’s heirs threatened to sue Executor if he deeded the property to Lessee and thus Lessee sued for specific performance of the option provision of the contract under Texas Probate Code § 27.  The trial court granted summary judgment in favor of Lessee.

The appellate court reversed.  The court explained that § 27 applies only “to circumstances in which a person has sold property or has entered into a bond or other written agreement to make title to that property and dies without having conveyed title.”  Id. at 280.  Because the granting of an option is not the sale of property or an agreement to sell, Lessee’s claim for specific performance did not fall within the purview of § 27.

Moral:  Enforcement of an option contract after the death of one of the parties is not available under Probate Code § 27.  However, enforcement of the option contract may be available on other grounds.