Disclosure and Special Notice Updates

Here’s a breakdown of several important updates in regards to Consumer Protection Notices, Seller Disclosure Notices, and Buyer Special Notices.

Revision to the Consumer Protection Notice

Real estate brokers, sales agents, inspectors, and easement or right-of-way (ERW) agents must provide the Consumer Protection Notice by posting it online and at their place of business. The notice will be updated to remove the reference to the real estate inspection recovery fund. If you link to the form on TREC’s website, you will not have to update your online notice. If you do not link to the form on their website (e.g., you have a PDF version or host the form on your own website), you will have to ensure it is updated September 1.

New Fuel Gas Piping Disclosure

The Seller’s Disclosure Notice is now requiring a seller to disclose the type of piping used for gas supply lines—black iron pipe, copper, or corrugated stainless steel tubing. The Texas REALTORS® Seller’s Disclosure Notice has been updated with an revision date of 7-10-23 and is available in the Zipform and Instanet Forms Library. The TREC and MetroTex Seller’s Disclosure forms are pending update and should be available in your forms library soon.

New Disclosure Requirements for Wholesaling

Wholesaling is a model in which an individual enters into a contract to buy real estate and then sells their contractual interest in the property to a third party prior to closing. A license is not necessary as long as the wholesaler discloses the nature of their interest to potential buyers and do not otherwise engage in real estate brokerage activity without a license. A bill passed during the legislative session and effective January 1, 2024, requires wholesalers to disclose their interest in the property in writing to both buyers and sellers.

Legal Update: MUD and Buyer Special Notices

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 a buyer a notice to purchasers indicating that 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.

The 88th Texas legislature made changes that went into effect June 18, 2023, that modify the content of the notice to provide more clarity to purchasers. MUDs are also now required to make the notice available online.

The revised notice separately lists the property tax and property assessments levied against the property for greater clarity. The revision also lists the amounts of bonds that have been issued by the MUD categorized by the type of facility the bonds will be used for: water, sewer, and drainage facilities; road facilities; parks and recreational facilities; and other facilities. Additionally, the notice must contain a disclosure informing the buyer that the information in the notice is subject to be changed by the MUD at any time and to contact the district directly for information on any proposed or pending changes.

You have a few options for obtaining copies of the notices. Beginning on June 18, 2023, MUDs were required to make the notice available on their websites. Additionally, MUDs are required to file these notices with their county property records office, so you may request a copy from the county. Lastly, the MUD is required to keep the correct notice on file and can provide a copy for an 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.