Texas · Water Code §49.452Texas MUD notice (special taxing district)
If a Texas property is in a municipal utility district (MUD) or another water, sewer or drainage district financed by taxes or a standby fee, the seller must give the buyer the statutory notice – tax rate, bonds, standby fee, city overlap and purpose – before the contract is signed. Without it the buyer may terminate; but a buyer who receives it late and still closes is conclusively presumed to have waived that right. A current copy is signed again at closing and recorded.
What the notice discloses
District and tax
The district's name, its current property tax rate per $100 of value (or the projected rate) – districts may levy an unlimited tax rate to pay voter-approved bonds.
Assessments and bonds
Any assessment rate or amount; the bonds approved by voters and those issued, for water, sewer and drainage, roads, parks and other facilities.
Standby fee
A TCEQ-approved standby fee, which is a personal obligation of the owner at the time and a lien on the property.
City and purpose
Whether the district is in a city's extraterritorial jurisdiction or inside city limits (taxed by both), any strategic partnership agreement, and the facilities it provides – whose cost is not in the price.
Timing and consequences (§49.452)
Before the contract
Given before a binding contract is executed – separately or as an addendum or paragraph of the contract – and signed by the buyer. The district's own form should be used if it publishes one (TREC 59-0 otherwise).
Buyer may terminate
If the contract is signed without the notice, the buyer is entitled to terminate it.
Closing anyway
If the seller furnishes the notice at or before closing and the buyer elects to close, the buyer is conclusively presumed to have waived the right to terminate and other remedies under the section.
Recorded at closing
A separate copy with current information is signed by both parties at closing, acknowledged and recorded in the county deed records.
What the TC tracks
- Is the property in a MUD or similar district? Check the tax certificate or appraisal district before the offer.
- The signed notice in the contract package – ¶6E(3) of TREC 20-19 requires it before final execution.
- Public improvement districts (PIDs) use a different notice (Property Code §5.014) – TREC 59-0 is not for PIDs.
- A current notice for signing and recording at closing.
Questions about the Texas MUD notice
When must the MUD notice be given in Texas?
Before the buyer signs a binding contract, either separately or as part of the contract (Water Code §49.452(f)).
Can a buyer cancel if they did not get the MUD notice?
Yes, the buyer is entitled to terminate. But if the notice is furnished at or before closing and the buyer closes anyway, the right is conclusively waived.
Is the MUD notice recorded?
Yes. At closing a separate copy with current information is signed, acknowledged and recorded in the county deed records.
Is TREC 59-0 used for PIDs?
No. TREC 59-0 states it is not for public improvement districts; PIDs use the notice under Property Code §5.014.
Can a MUD tax rate change after closing?
Yes. The notice warns that the district sets tax rates annually and the information may change at any time.
Texas guides
Add the MUD notice to the deal's document checklist in ClosingCode – signed before the contract, and again at closing.
Start free trialSources: Texas Water Code §49.452 (statutes.capitol.texas.gov, read October 24, 2026); TREC No. 59-0 Notice to Purchaser of Special Taxing or Assessment District (02-12-2024); TREC No. 20-19, ¶6E(3).
General information, not legal advice. ClosingCode is software; it is not a law firm or brokerage, and it is not affiliated with TREC.