Texas Real Estate Sales Agent ExamTexas Real Estate LawMedium
A buyer is interested in purchasing a property located within a municipal utility district (MUD). According to Texas law, what specific disclosure must the seller provide to the buyer regarding the MUD?
- AA statutory notice describing the MUD, its services, and the tax rate, provided before contract execution.
- BA detailed financial statement of the MUD's assets and liabilities.
- CA general statement that the property is in a MUD and may have additional taxes.
- DA verbal disclosure during property showing, followed by written confirmation at closing.
Show answer & explanationAnswer & explanation
Correct answer: A. A statutory notice describing the MUD, its services, and the tax rate, provided before contract execution.
Texas Water Code requires sellers of property in a MUD (or other special districts) to provide a specific statutory notice (Addendum for Property Subject to Mandatory Membership in a Property Owners Association) to the buyer before contract execution. This notice details the district's services, tax rates, and bond indebtedness.
Why the other options are wrong
- B. While important for due diligence, a full financial statement is not the required statutory disclosure itself.
- C. A general statement is insufficient; specific statutory language is required.
- D. Verbal disclosure is insufficient; it must be a specific written notice provided at a critical stage of the transaction.
MUD Disclosure (Texas)
A mandatory statutory notice required in Texas for properties located within a Municipal Utility District, informing buyers about the district's services, tax rates, and bond indebtedness.
- Required by Texas Water Code
- Must be provided before contract execution
- Details MUD taxes, services, and bonded indebtedness
Memory trick: Before you buy, know the hidden truths the law makes visible.