UPDATE (August 18, 2023): Please read the latest update on changes to the MUD Notices to Purchaser HERE: https://www.harconnect.com/update-mud-notices-to-purchaser/
Published August 10, 2023:
Form HAR 400 is no longer applicable and has been discontinued.
Why? The Texas Legislature recently passed a series of laws, HB2815 and HB2816, changing the utility district or “MUD” notice of information process. The legal notice provisions used in form HAR 400 have been deleted by the recent legislation and are no longer the law. As those laws passed with a two-thirds majority, the changes went into effect immediately, June 18, 2023, rather than on September 1.
All information or “notice” concerning a district’s rates, services, bonds, etc., must be contained and posted on the district’s website for access by the public. As before, if a seller’s property is situated in a district, then the seller must deliver to the buyer the statutory notice for the buyer’s signature prior to final execution of the earnest money contract. The notice can be obtained from the district’s website which the new law requires of the district.
So, on behalf of your seller client, the listing agent will be tasked with obtaining a completed notice directly from the district. Seller’s obligation to deliver notice to the buyer can be found in paragraph 6.E.(3) and (11) or (12) in the TREC form sale contracts. Failure to timely obtain buyer’s signature prior to execution of the final purchase contract will allow the buyer to terminate the contract unless the notice is signed at or before closing (if closed it is presumed the buyer waived its right to terminate).
Delivery of the notice is accomplished upon execution of the notice by the buyer. Additionally, the seller must sign the notice too. Finally, as stated previously, a completed notice should be available on the district’s website. Additionally, a district is required to file the notice with the county property records, and also have a copy available upon request to it and payment of a fee up to $10.00, i.e., two other ways to obtain the notice.
If you have any questions or need assistance, email mlsqa@har.com.
UPDATE: A letter is being sent by TR Legal Counsel to MUDs in Texas to address the issue of MUDs in our area not being in compliance with the law. TR will also continue to push TCEQ, the state agency that oversees MUDs, to enforce compliance with statutory requirements.
Read the letter HERE.
Frequently Asked Questions
Q. Why was the Notice changed?
The Texas Legislature passed a law that reworded the disclosures, which now requires them to be made by a MUD.
Q. When did this new law go into effect?
It went into effect June 18, 2023.
Q. Where can the MUD Notice be found?
The new law places the burden on certain MUDs to post the Notice on their website, but many are yet to comply. Until then, you will need to contact the MUD directly for the Notice. You can search for MUD contact information on TCEQ’s website: https://www14.tceq.texas.gov/iwud/index.cfm. This link has also been added to the External Links widget in Matrix.
Q. How much can a MUD charge for a copy of the Notice?
They can charge up to $10 per request.
Q. Is the new MUD Notice required to be notarized?
There is no requirement under the Water Code to have the Notice to Purchasers notarized by the buyer or seller.
Q. Does this new law and the Notice affect my listing that is under contract?
Yes. Certainly, if the contract was executed on or after June 18, 2023. We advise discussing with your broker and seeking legal counsel to confirm if this change in the Notice applies to your contract.
