the legislature enacted some new rules last year. I have not studied them, so you will want to confirm this info. My understanding is that lease options are still perfectly ok. What changed are the notice /procedural requirements when the option holder goes into default. The purpose of the law was to put lease options and seller-financing on the same page. It used to be much easier to get a defaulting lease option holder out. now is it is similar to taking back a seller-financed property.
The new law in TX covers any “executory agreement” -land contract or lease/option where the agreement does not transfer title to the buyer within 6 months. With all executory agreements, there’s a requirement that the underlying lender give permission, which basically makes it impractical, since most lenders wouldn’t give their permission.
It is not illegal to simply transfer title to the buyer and take back an wraparound AITD (All inclusive trust deed), since it is not an executory contract.