2023 Texas Statutes › Water Code › Title 2 - Water Administration › Subtitle B - Water Rights › Chapter 13 - Water Rates and Services › Subchapter G. Certificates of Convenience and Necessity › Section 13.257. Notice to Purchasers

Sec. 13.257.  NOTICE TO PURCHASERS.  (a)  In this section, "utility service provider" means a retail public utility other than a district subject to Section 49.452 of this code.
(b)  If a person proposes to sell or convey real property located in a certificated service area of a utility service provider, the person must give to the purchaser written notice as prescribed by this section.  An executory contract for the purchase and sale of real property that has a performance period of more than six months is considered a sale of real property under this section.
(c)  This section does not apply to:
(1)  a transfer of title under any type of lien foreclosure;
(2)  a transfer of title by deed in cancellation of indebtedness secured by a lien on the property conveyed;
(3)  a transfer of title by reason of a will or probate proceeding;
(4)  a transfer of title to or from a governmental entity;
(5)  a transfer of title to property located within the corporate limits of a municipality that is served by a municipally owned utility;
(6)  a transfer of title to property that receives water or sewer service from a utility service provider on the date the property is transferred;
(7)  a transfer of title by a trustee in bankruptcy;
(8)  a transfer of title by a mortgagee or beneficiary under a deed of trust who acquired the property:
(A)  at a sale conducted under a power of sale conferred by a deed of trust or other contract lien;
(B)  at a sale under a court judgment foreclosing a lien; or
(C)  by a deed in lieu of foreclosure;
(9)  a transfer of title from one co-owner to another co-owner;
(10)  a transfer of title between spouses or to a person in the lineal line of consanguinity of the transferor; or
(11)  a transfer of a mineral interest, leasehold interest, or security interest.
(d)  The notice must be executed by the seller and read as follows:  "The real property, described below, that you are about to purchase may be located in a certificated water or sewer service area, which is authorized by law to provide water or sewer service to the properties in the certificated area.  If your property is located in a certificated area there may be special costs or charges that you will be required to pay before you can receive water or sewer service.  There may be a period required to construct lines or other facilities necessary to provide water or sewer service to your property.  You are advised to determine if the property is in a certificated area and contact the utility service provider to determine the cost that you will be required to pay and the period, if any, that is required to provide water or sewer service to your property.
"The undersigned purchaser hereby acknowledges receipt of the foregoing notice at or before the execution of a binding contract for the purchase of the real property described in the notice or at closing of purchase of the real property.
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Date
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Signature of Purchaser
"Except for notices included as an addendum to or paragraph of a purchase contract, the notice must be executed by the seller and purchaser, as indicated."
(e)  The notice must be given to the prospective purchaser before the execution of a binding contract of purchase and sale.  The notice may be given separately or as an addendum to or paragraph of the contract.  If the seller fails to provide the notice required by this section, the purchaser may terminate the contract.  If the seller provides the notice at or before the closing of the purchase and sale contract and the purchaser elects to close even though the notice was not timely provided before the execution of the contract, it is conclusively presumed that the purchaser has waived all rights to terminate the contract and recover damages or pursue other remedies or rights under this section.  Notwithstanding any provision of this section to the contrary, a seller, title insurance company, real estate broker, or examining attorney, or an agent, representative, or person acting on behalf of the seller, company, broker, or attorney, is not liable for damages under Subsection (m) or (n) or liable for any other damages to any person for:
(1)  failing to provide the notice required by this section to a purchaser before the execution of a binding contract of purchase and sale or at or before the closing of the purchase and sale contract if:
(A)  the utility service provider did not file the map of the certificated service area in the real property records of the county in which the service area is located and with the utility commission depicting the boundaries of the service area of the utility service provider as shown in the real property records of the county in which the service area is located; and
(B)  the utility commission did not maintain an accurate map of the certificated service area of the utility service provider as required by this chapter; or
(2)  unintentionally providing a notice required by this section that is incorrect under the circumstances before the execution of a binding contract of purchase and sale or at or before the closing of the purchase and sale contract.
(f)  The purchaser shall sign the notice or the purchase and sale contract that includes the notice to evidence the purchaser's receipt of the notice.
(g)  At the closing of the purchase and sale contract, a separate copy of the notice with current information shall be executed by the seller and purchaser, acknowledged, and subsequently recorded in the real property records of the county in which the property is located.  In completing the notice to be executed by the seller and purchaser at the closing of the purchase and sale contract, any seller, title insurance company, real estate broker, or examining attorney, or any agent, representative, or person acting on behalf of the seller, company, broker, or attorney, may rely on the accuracy of the information required by this chapter that is last filed in the real property records by the utility service provider and the accuracy of the map of the certificated service area of the utility service provider.  Any information taken from the map is, for purposes of this section, conclusively presumed to be correct as a matter of law.  Any subsequent seller, purchaser, title insurance company, real estate broker, examining attorney, or lienholder may rely on the map of the certificated service area filed in the real property records by the utility service provider.
(h)  In completing the notice required to be given to a prospective purchaser before the execution of a binding contract of purchase and sale, any seller, and any person completing the notice on behalf of the seller, may rely on the information contained in the map of the certificated service area filed in the real property records by the utility service provider.  Any subsequent seller, purchaser, title insurance company, real estate broker, examining attorney, or lienholder may rely on the map of the certificated service area filed in the real property records by the utility service provider.
(i)  If the notice is given at closing as provided by Subsection (g), a purchaser, or the purchaser's heirs, successors, or assigns, may not maintain an action for damages or maintain an action against a seller, title insurance company, real estate broker, or lienholder, or any agent, representative, or person acting on behalf of the seller, company, broker, or lienholder, by reason of the seller's use of the information filed with the utility commission by the utility service provider or the seller's use of the map of the certificated service area of the utility service provider filed in the real property records to determine whether the property to be purchased is within the certificated service area of the utility service provider.  An action may not be maintained against a title insurance company for the failure to disclose that the described real property is included within the certificated service area of a utility service provider if the utility service provider did not file in the real property records or with the utility commission the map of the certificated service area.
(j)  Any purchaser who purchases real property in a certificated service area of a utility service provider and who subsequently sells or conveys the property is conclusively considered on the closing of the subsequent sale to have waived any previous right to damages under this section.
(k)  It is the express intent of this section that any seller, title insurance company, examining attorney, vendor of property and tax information, real estate broker, or lienholder, or any agent, representative, or person acting on behalf of the seller, company, attorney, vendor, broker, or lienholder, may rely for the purpose of completing the notice required by this section on the accuracy of the map of the certificated service area of the utility service provider filed in the real property records by the utility service provider.
(l)  Except as otherwise provided by Subsection (e), if any sale or conveyance of real property within the certificated service area of a utility service provider fails to comply with this section, the purchaser may file a suit for damages under Subsection (m) or (n).
(m)  If the sale or conveyance of real property fails to comply with this section, the purchaser may file a suit for damages in the amount of all costs related to the purchase of the property plus interest and reasonable attorney's fees.  The suit for damages may be filed jointly or severally against the individual or entity that sold or conveyed the property to the purchaser.  Following the recovery of damages under this subsection, the amount of the damages shall be paid first to satisfy all unpaid obligations on each outstanding lien on the property and the remainder of the damage amount shall be paid to the purchaser.  On payment of all damages respectively to each lienholder and the purchaser, the purchaser shall reconvey the property to the seller.
(n)  If the sale or conveyance of the property fails to comply with this section, the purchaser may file a suit for damages in an amount not to exceed $5,000, plus reasonable attorney's fees.
(o)  A purchaser may not recover damages under both Subsections (m) and (n).  An entry of a final decision awarding damages to the purchaser under either Subsection (m) or (n) precludes the purchaser from recovering damages under the other subsection.  Notwithstanding general or special law or the common law of this state to the contrary, the relief provided under Subsections (m) and (n) provides the exclusive remedy for a purchaser aggrieved by the seller's failure to comply with this section.  Any action for damages under this section does not apply to, affect, alter, or impair the validity of any existing vendor's lien, mechanic's lien, or deed of trust lien on the property.
(p)  A suit for damages under this section must be filed by the earlier of:
(1)  a date on or before the 90th day after the date the purchaser discovers:
(A)  the cost the purchaser is required to pay to the utility service provider to obtain water or sewer service;  or
(B)  the period required by the utility service provider to provide water or sewer service;  or
(2)  the fourth anniversary of the date the property was sold or conveyed to the purchaser.
(q)  Notwithstanding any other provision of this section to the contrary, a purchaser may not recover damages under this section if the person:
(1)  purchases an equity interest in real property and, in conjunction with the purchase, assumes any liens, including a purchase money lien;  and
(2)  does not require proof of title by abstract, title insurance policy, or any other method.
(r)  A utility service provider shall:
(1)  record in the real property records of each county in which the service area or a portion of the service area is located a certified copy of the map of the certificate of public convenience and necessity and of any amendment to the certificate as contained in the utility commission's records, and a boundary description of the service area by:
(A)  a metes and bounds survey certified by a licensed state land surveyor or a registered professional land surveyor;
(B)  the Texas State Plane Coordinate System;
(C)  verifiable landmarks, including a road, creek, or railroad line; or
(D)  if a recorded plat of the area exists, lot and block number; and
(2)  submit to the utility commission evidence of the recording.
(s)  Each county shall accept and file in its real property records a utility service provider's map presented to the county clerk under this section if the map meets filing requirements, does not exceed 11 inches by 17 inches in size, and is accompanied by the appropriate fee.  The recording required by this section must be completed not later than the 31st day after the date a utility service provider receives a final order from the utility commission granting an application for a new certificate or for an amendment to a certificate that results in a change in the utility service provider's service area.
Added by Acts 2001, 77th Leg., ch. 1068, Sec. 1, eff. Sept. 1, 2001.
Amended by:
Acts 2005, 79th Leg., Ch. 1145 (H.B. 2876), Sec. 12, eff. September 1, 2005.
Acts 2009, 81st Leg., R.S., Ch. 1004 (H.B. 4043), Sec. 1, eff. June 19, 2009.
Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600), Sec. 2.58, eff. September 1, 2013.
Acts 2013, 83rd Leg., R.S., Ch. 171 (S.B. 567), Sec. 58, eff. September 1, 2013.