By Charles Porter, Ph.D. May 01, 2026

It can be said that water renders land its value in almost all areas of Texas. As our drought-plagued state struggles with substantial thirst issues, real estate with an ample supply of fresh, potable water often sells at higher prices—sometimes many multiples higher—than land without adequate water.

Yet most Texans are confused about water rights. In the vast majority of real estate transactions, water rights are undisclosed. That is changing.

The Texas Real Estate Commission has taken the lead to educate buyers and sellers about the water rights, regulations, and availability of water on a property before the conveyance of such property. After years of work by the TREC Broker-Lawyer Committee, the Texas Alliance of Groundwater Districts, the Texas Water Association, the Texas Alliance of Land Brokers, and others, all the promulgated contracts now include notices about water. The revised forms are mandatory as of July 1, 2026.

What changed in the contracts?

TREC has added a water notice paragraph to its promulgated contracts. The water notice paragraph may appear in different locations in the various contracts, but the wording remains the same. It includes a general disclosure about water rights, followed by three options for whether the buyer has or will receive the separate, new Seller’s Disclosure About Groundwater and Surface Water Rights (TREC 61-0) form.

Note that all five statements in Section 3 must be true to check the box that the seller will not deliver the new notice form.

What is the purpose of the new Water Notice?

The separate, new Seller’s Disclosure About Groundwater and Surface Water Rights is a three-page form that starts with definitions, followed by a series of disclosures related to groundwater, wells, and surface water. The form only requires sellers to state what they are aware of in relation to water rights, so that if they are not aware of the information asked in the form, they can specify that they are not.

The notice is intended to provide disclosure about the rights of the seller to surface water and groundwater on the property, so that a potential buyer is aware of the water rights affecting the property. State law requires that all material facts about a property are disclosed. However, since there was no form that specifically asked about water rights, many sellers failed to disclose such information. This duty to disclose any material defect—including a material defect concerning water rights—is shared by sellers and their real estate agents.

Today, assessing the water characteristics of any particular property presents unique challenges to buyers, sellers, lessors, and lessees. The water scarcity predicted in our future requires potential buyers to consider a variety of assessment criteria that previously were less-often considered. The new form is intended to assist in alleviating these challenges and give an assessment of the water rights affecting the property.

Above all else, keep this in mind: Unless you are an attorney or hydrological engineer, you are barred from interpreting laws, rules, and regulations about water.

However, it is your duty under TREC rules as a fiduciary to your clients to make clients aware of the requirement to disclose information about water rights using the new seller’s water disclosure form. This includes recommending that clients seek expert advice when appropriate.

These new contract provisions are vital to your clients, and they place Texas at the forefront of one of our most critical modern issues!

Determining a water right in Texas depends on which of three geological containers holds the water

The first container is surface water or water that flows on the surface of the ground in a watercourse, which is a natural or artificial channel through which water flows, such as a river, stream, lake, bay, or gulf. The State of Texas owns the water in a watercourse, held in trust for the citizens of the state. The Texas Commission on Environmental Quality (TCEQ) regulates use of surface water in Texas by a system of water rights. The TCEQ essentially oversees the administration of water rights through 15 regional water authorities and four watermasters.

Surface water rights in Texas are fully allocated and have been for years. The decades-long implementation of the Water Rights Adjudication Act of 1967 clarified individual surface water rights for agricultural, industrial, municipal, and other specific uses.

The second geological container is known as diffused surface water or rainwater that runs off your roof or over the surface of your land without flowing in a stream or channel. The water in this container is owned by the landowner, who may collect it without regulation. Keep in mind that each inch of rain that lands on one acre of ground brings 27,154 gallons of water!

The third container is groundwater, or water held underground in aquifers and pools. Ownership of groundwater in Texas was debated for many decades, but in 2011, the Texas Legislature passed a bill that recognizes that a landowner owns the groundwater below the surface of the landowner’s land as real property.

Groundwater is regulated by 101 groundwater conservation districts (GCDs) within the framework of Chapter 36 of the Texas Water Code. Not all of Texas is under the jurisdiction of a GCD, either because there is little groundwater available or the local community does not desire to create a GCD. These districts are formed by local election but can be formed by the TCEQ or by the Legislature.

Charles Porter, Ph.D. , is an author, Texas real estate broker, and testifying water-rights and real estate expert named in over 600 cases. He has written Water Rights in the United States: A Guide Through the Maze and Sharing the Common Pool: Water Rights in the Everyday Lives of Texans, among many other books and papers on water rights.