Legal FAQs for REALTORS®
— Contracts and Forms
I've heard that a seller whose home is located in a municipal utility district, or MUD, is required to give a buyer special notices. What are the notices, and where can I find them?
A MUD is a political subdivision of the state that's authorized by the Texas Commission on Environmental Quality to provide water, sewage, drainage, and other services within its boundaries. The seller is required by the Texas Water Code to provide notice to a buyer that the property is located within a MUD prior to the buyer entering into a sales contract. The notice must provide information regarding the tax rate, bonded indebtedness, and fees, if any, of the MUD. Usually, the fact that the property is within a MUD should be fairly obvious to the seller because it will be listed on the tax bill that the county sends to the property owner. However, the seller will not always know what specific type of notice to provide to the buyer based on the requirements in the Water Code.
The seller must choose from three notices, based on the location of the MUD:
If the MUD is located within city limits, use the notice in 49.452(c) of the Water Code
If the MUD is not in city limits but within the extraterritorial jurisdiction of the city, use the notice in 49.452(b)
If the MUD is in neither, then use the notice in 49.452(d). You have two options for obtaining copies of the notices. MUDs are required to file these notices with their county property records office, so you may request a copy from the county. In addition, the MUD itself is required to keep the correct notice on hand and can provide a copy for a small administrative fee not to exceed $10.
To look up a district's information, including the contact information for the district's agent, use TCEQ's online database of utility districts.
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