Summary of the New Law Changes Regarding Public Improvement Districts

?Recently, the Texas Legislature has been active, enacting a variety of new laws and changes to existing laws. Public Improvement Districts (PID) are one such area being impacted.?House Bill 1543 amends certain sections of the Local Government Code and the Property Code to provide for notice of PID in the property records and to require a seller to provide notice to a buyer when real property is located in a PID. This is not entirely unexpected, as the new PID notice requirement is similar to that for municipal utility district (MUD) notices. Prior to the execution of a contract, the notice should be given to the prospective buyer.?Additionally, a separate copy of a statutory notice with current information is to be signed by the seller and buyer in front of a notary and recorded in the property records where the property is located.

The Property Code has been amended to require a person who proposes to sell or otherwise convey real property that is located in a PID to provide written notice to a Buyer of the obligation to pay a PID. Similar to exceptions for a Seller's Disclosure Notice, you do not have to for transfers related to foreclosure sales and those by a fiduciary in connection with a probate administration. The notice is to be given by the seller to the prospective buyer before the execution of a binding contract of purchase and sale, either separately or as an addendum or paragraph of a purchase contract. The TREC has adopted a new addendum to address this requirement.

In the event a buyer does not receive the Notice, it is entitled to terminate the contract.?However, if the seller furnishes the notice at or before closing the purchase and sale contract and the buyer elects to close even though the notice was not timely furnished before execution of the contract, it is presumed that the buyer has waived all rights to terminate the contract or recover damages. The buyer is required to sign the notice. At closing, a separate copy of the notice required by Section 5.014 with current information shall be signed by the seller and buyer in front of a Notary Public and recorded.

Of note, if any sale of real property within a PID is not made in compliance with Section 5.014, 5.0141, 5.0142, or 5.0143 of the Property Code, the buyer may institute a suit for damages. A suit for damages under this section must be brought not later than the earlier of the 90th day after the date the buyer receives the first public improvement district annual assessment installment or tax notice; or the fourth anniversary of the date the property is sold or conveyed to the purchaser.

I hope you have found this information helpful.?If you have been thinking about selling and would like to know what you could sell your home for in this hot market, give me a call at 214-454-6969. Homes are selling well above list price with multiple offers and full appraisal waivers.

Sherry Cabrera, 214-454-6969?[email protected]?