Coastal files look like any other Texas resale until you get into the details. Then there are extra notices the statute requires, insurance that can’t be bound without a certificate, flood questions the lender will ask whether or not the seller did, and, often, a buyer who’s closing on a rental from three hours away.
None of it is hard. It just has to be started on day one instead of discovered the week of closing. Here’s what we track on Galveston, Bolivar Peninsula and Gulf Coast files.
The coastal addenda
Two statutory notices apply to coastal property in Texas, and TREC promulgates an addendum for each: the Addendum for Coastal Area Property and the Addendum for Property Located Seaward of the Gulf Intracoastal Waterway.
- Coastal area property. When the property adjoins and shares a boundary with tidally influenced waters, the Texas Natural Resources Code requires a notice about coastal area property to be included in the contract. The TREC resale contract’s statutory notices (Paragraph 6.E) point you to it.
- Property seaward of the Gulf Intracoastal Waterway. Property located seaward of the GIWW needs a separate notice covering the public’s right to use the beach and the effects of erosion. On the island and the peninsula, that’s a lot of listings.
Because these are required by statute, we confirm them at intake, when we’re reading the executed contract, not at the closing table. If an addendum is missing, the time to fix it is before anyone has relied on the contract.
Windstorm coverage and certificates
Along the Texas coast, standard homeowner’s policies often exclude wind and hail, so coverage comes from the Texas Windstorm Insurance Association (TWIA) or a private carrier.
What trips files up is the certificate of compliance. The Texas Department of Insurance issues it after a windstorm inspection shows the structure, or a later repair, meets the windstorm building code. Coverage can depend on it. If the house was re-roofed, added onto or repaired without one, the buyer’s agent and the insurance agent need to know now, not five days before funding.
What we track:
- Whether the seller has windstorm certificates for the home and any later work
- The buyer’s windstorm quote and binder, alongside the homeowner’s policy
- The lender’s insurance requirements, so the binder matches what underwriting needs
Flood: disclosures, elevation and insurance
Flood comes up on nearly every coastal file.
- Seller’s disclosure. The Texas seller’s disclosure asks about flood insurance, prior flooding, flood claims and whether the property is in a floodplain. Make sure it’s complete and delivered.
- Elevation certificate. It drives the flood premium. If the seller has one, get it into the file early. If not, the buyer may want one ordered.
- Flood insurance. In a special flood hazard area with a federally backed or regulated loan, the lender will require it. A new NFIP policy normally has a waiting period, but a policy bought in connection with making the loan can take effect at closing, so coordinate the timing with the lender.
- Rentals. Texas landlords have to give tenants a flood disclosure in residential leases, so if there’s a long-term tenant, ask for the lease and its disclosure. TREC publishes a Landlord’s Floodplain and Flood Notice for this.
Rental properties and out-of-town buyers
A lot of Galveston buyers are buying a second home or a rental, and many of them don’t live nearby.
- Existing bookings. Short-term rentals often have guest reservations on the calendar past closing. The contract should say what happens to them and to any deposits.
- Management agreements. If a rental manager is in place, find out whether the agreement transfers or ends, and on what notice.
- Registration and taxes. Rentals may carry local registration and hotel occupancy tax accounts. In the City of Galveston, short-term rentals register through the Park Board. The buyer will need their own.
- Remote signing. Out-of-town buyers often sign by mail-away or remote online notarization. Line it up with the title company early, especially if a spouse or entity is signing too.
A coastal checklist
At intake on a coastal file, we add these to the standard contract-to-close checklist:
- Coastal area and seaward-of-the-GIWW addenda: needed? signed?
- Windstorm certificates for the home and later work
- Windstorm and homeowner’s quotes and binders
- Elevation certificate and flood quote
- Seller’s disclosure flood answers complete
- Leases, flood disclosure to tenants, bookings, management agreement
- Remote signing plan with the title company
If you work coastal files and want someone running that list for you, that’s what we do on every Galveston and Houston-area file.
