A Bill filed in the Texas House of Representatives seeks to add new sections to the written Disclosures that the Seller of residential property must furnish to buyers. This notice, called the “Seller’s Disclosure Notice” is already required under Section 5.008 of the Texas Property Code.
Under the proposed legislation, HB 2422, the information required to be disclosed will be supplemented to provide TWO categories of information concerning water associated with the property.
A. Information concerning water service to the property, including the following:
- The name of the entity who regulates the water supply.
- The name of the entity responsible for billing the homeowner for water use.
- Whether there are any excessive water use fees or water use pricing tiers applicable to the property; and
- The name of the entity responsible for maintaining the water service line to the property.
B. Information about the groundwater and surface water rights conveyed with the property.
To facilitate disclosure of water rights to be conveyed, HB 2422 proposes to add a new section 5.0131 to the Texas Property Code. Here’s the text of the proposed section 5.0131:
SECTION 2. Subchapter A, Chapter 5, Property Code, is amended by adding Section 5.0131 to read as follows:
Sec. 5.0131. NOTICE OF GROUNDWATER AND SURFACE WATER RIGHTS.
(a) This section applies only to the sale of a fee simple interest in residential real property located in this state comprising not more than one dwelling unit and land on which the dwelling is located.
(b) A seller of residential real property to which this section applies shall provide the purchaser of the property with a written notice describing the groundwater and surface water rights conveyed with the property.
(c) The Texas Real Estate Commission shall develop and publish the form for the written notice required under Subsection (b). The form must require the seller to disclose information concerning:
(1) whether the conveyance of the property includes any groundwater rights;
(2) whether the conveyance of the property includes any surface water rights;
(3) whether there are any water wells located on the property; and
(4) if the property is located in a groundwater conservation district or a subsidence district, the name and any relevant information concerning the applicable district.(d) The notice must be delivered by the seller on or before the effective date of an executory contract binding the purchaser to purchase the property. If a contract is entered without the seller providing the notice as required by this section, the purchaser may terminate the contract for any reason not later than the seventh day after the effective date of the receiving of the notice.
(e) The appropriate use of forms published by the Texas Real Estate Commission under this section constitutes compliance with this section.
The Bill was filed by Rep. Vikki Goodwin (D- Austin) on February 4, 2025.
I believe that this legislation is warranted. As water rights become increasingly valuable, it is important for prospective buyers to have a complete understanding to the property’s access to water, and the available water supply sources.
I hope that this Bill gets referred to committee and gains some traction so that the proposed additions to the Seller’s Disclosure Notice eventually become law.
