Changes to the texas mud disclosure process
Change is here!
An important part of the listing process is checking the tax records to confirm which taxing authorities must be disclosed to potential buyers. Agents in the Houston area have had the ease of a dedicated MUD disclosure form (HAR 400) until now - change is here!
So what do we do now?
Per the new legislation, all of the information for the district - the rates, bonds, services, etc must be on the district’s website for the public. Also, the district’s statutory notice must be obtained from the district by the listing agent/seller. There may be up to a $10 fee to obtain the notice. You can find the MUD’s contact information through TCEQ’s website at https://www14.tceq.texas.gov/iwud/index.cfm It is still mandatory to provide the notice, signed by the sellers to be executed by the buyer PRIOR to the contract execution. Otherwise, the buyer has the ability to terminate the contract at any time up until closing.
How can we make this process easy?
As a Texas Transaction Coordinator, our goal is to streamline the listing process for our listing agents and sellers as much as possible. Here is how the MUD disclosure process would flow:
1. Check tax reports (Matrix Tax, Realist. Local County Appraisal District, or CAD) for the property’s tax authorities. Identify all MUD districts associated with the listing. It is a good idea to check more than one tax source as some update more often than others.
2. Search each MUD (sometimes a property has more than one!) on the TCEQ website for the website and contact information
3. Obtain any downloadable statutory notices available from websites, and have the seller(s) sign
4. Reach out to any MUD district to send a copy of the notice, if it is not available online. There are a few MUD districts that will charge up to 10 dollars to send the notice to the seller - decide in advance how the fee will be handled. There are also a few MUD districts that will only release the notice to the seller, not the listing agent.
5. Once all MUD notices have been received and signed, it is best practice to upload them to your MLS in the attachment sections (along with the seller disclosure and all other important documents) for ease of the buyer's agent.
6. This step is very important. Make sure the buyer has signed the statutory notice(s) before the seller executes the resale contract.
While these steps may seem a little more involved than before, the trick is to not rush the listing process and set your listing up for success before you go live. Short on time, but not on tasks? Consider talking to a Texas Transaction Coordinator from Freedom Real Estate Services to help lighten your listing load. Listing Coordination is one of the many services we offer to our clients to help them reclaim their precious time.