A broker or seller who receives an inspection report is charged with knowledge of the information in the report. This is true even if the broker or seller does not open the report or disagrees with the information contained in the report. If an inspection report reveals material defects, the seller and the broker are obliged to disclose those defects to subsequent potential buyers.

The seller and broker may choose to disclose the defects orally, but that may be imprudent since no record of the disclosure would exist. The seller and broker may instead summarize the defects in a written communication to the subsequent buyer, but that may create a risk if the information is omitted.

Instead, the seller and broker should provide a copy of the report to the subsequent potential buyer along with the seller’s disclosure notice, thereby providing all of the information the seller and broker have with regard to the condition of the property. The Texas REALTORS® Seller’s Disclosure Notice (TXR 1406) instructs the seller to identify and attach copies of previous inspection reports received in the past four years. The association’s notice cautions the buyer against relying on previous reports as a reflection of the current condition of property and suggests that the buyer employ an inspector of the buyer’s choice to inspect the property.

A seller, landlord, or agent who fails to satisfy lead-based paint disclosure requirements can be sued for triple the amount of damages and may be subject to civil and criminal penalties.

Any broker or sales agent receiving compensation from the seller or landlord—either directly or through the listing broker—is considered an agent for purposes of lead-based paint disclosure requirements.

Yes. The seller must sign first because the seller has the obligation to provide information to the buyer regarding any known lead-based paint and/or lead-based paint hazards, as well as any records and reports pertaining to lead-based paint and/or lead-based paint hazards that the seller may have.

The prospective buyer must have this information when deciding whether to conduct a risk assessment or inspection for the presence of lead-based paint or lead-based paint hazards. Note that this seller’s disclosure must be made before any contract for the purchase of a residential dwelling built before 1978 is executed by the buyer.

No. The seller’s disclosure-notice requirements in Section 5.008 of the Texas Property Code only apply to sellers of residential real property composed of “not more than one dwelling unit.” Although not required to provide the statutory notice, a seller must still disclose known material defects concerning the property, making it a good idea for the owner of a duplex to provide the notice for each side of the duplex.

Any seller should review the seller’s disclosure notice and consider the advantages of disclosing information about the property’s condition before an offer is made. The notice can be a significant risk-reduction tool.

Section 5.008 of the Texas Property Code requires the disclosure notice be provided to a buyer on or before the effective date of the contract. If the seller does not furnish the notice on or before the effective date, Paragraph 7B(2) of the One to Four Family Residential Contract (Resale) (TXR 1601) allows for the parties to stipulate how many days the seller has to provide the notice. However, a seller who provides the notice after the effective date gives the buyer the opportunity to terminate the contract for any reason within seven days after receiving the notice—or if the seller never delivers the notice, at any point prior to closing—and receive a return of his earnest money.

No. Agents have a duty to disclose material facts they know about the property, but they are not required to do additional research for the purpose of making disclosures on properties they represent. Furthermore, agents should not help sellers fill out the seller’s disclosure notice, because doing so can increase their liability and the liability of their broker.

Yes, both forms comply with Texas statutory requirements related to seller’s disclosure.

The TREC form is essentially a copy of the statutory minimum information required in Section 5.008 of the Texas Property Code. The Texas REALTORS® Seller’s Disclosure Notice (TXR 1406) has added provisions that provide more information for buyers and is designed to serve as a risk-reduction tool for sellers.

MUD is a political subdivision of the state that’s authorized by the Texas Commission on Environmental Quality to provide water, sewage, drainage, and other services within its boundaries. The seller is required by the Texas Water Code to provide a buyer a notice to purchasers indicating that property is located within a MUD prior to the buyer entering into a sales contract. The notice must provide information regarding the tax rate, bonded indebtedness, and fees, if any, of the MUD.

The 88th Texas legislature made changes that went into effect June 18, 2023, that modify the content of the notice to provide more clarity to purchasers. MUDs are also now required to make the notice available online.

The revised notice separately lists the property tax and property assessments levied against the property for greater clarity. The revision also lists the amounts of bonds that have been issued by the MUD categorized by the type of facility the bonds will be used for: water, sewer, and drainage facilities; road facilities; parks and recreational facilities; and other facilities. Additionally, the notice must contain a disclosure informing the buyer that the information in the notice is subject to be changed by the MUD at any time and to contact the district directly for information on any proposed or pending changes.

You have a few options for obtaining copies of the notices. Beginning on June 18, 2023, MUDs were required to make the notice available on their websites.

Additionally, MUDs are required to file these notices with their county property records office, so you may request a copy from the county. Lastly, the MUD is required to keep the correct notice on file and can provide a copy for an administrative fee not to exceed $10.

To look up a district’s information, including the contact information for the district’s agent, use TCEQ’s online database of utility districts.

During the 87th Texas Legislature, a change in law passed that requires landlords to give notice to prospective residential tenants if the landlords are aware that the rental dwelling is located in a 100-year floodplain or whether the rental dwelling has flooded at during the past five years.

Texas REALTORS® created the Addendum Regarding Rental Flood Disclosure (TXR 2015) to satisfy the required disclosure. Use of the form is mandatory starting January 1, 2022, but you may use the form immediately. Here are answers to questions about the new form.

When must the addendum be provided?

The Addendum Regarding Rental Flood Disclosure applies to landlords, who are required to provide the addendum to a tenant at or before the execution of the lease.

Can I fill out and sign the addendum on behalf of the landlord?

Agents and brokers should not help landlords fill out the addendum because doing so can increase their liability. Also, brokers and agents have a duty to disclose material facts they know about the property but are not required to do additional research for the purpose of making disclosures on properties they represent.

Is the addendum required if the property is not in a 100-year floodplain and has never flooded?

Yes. Landlords can indicate in the addendum that they are not aware that a dwelling is located in a 100-year floodplain or that they are not aware that the dwelling has flooded at least once within the last five years. However, a landlord is not required to disclose on the addendum that the landlord is aware that a dwelling is located in a 100-year floodplain if the elevation of the dwelling is raised above the 100-year floodplain flood levels in accordance with federal regulations.

Do I have to provide the addendum when extending a lease or when a lease automatically renews to a month-to-month?

No. The addendum is required to be given on or before the execution of the lease. The lease extension form is an amendment to the lease, and the renewal is automatic, meaning there are no later executions of a lease in either instance. However, if there is an existing lease that renews or is extended after the effective date of the notice requirement (January 01, 2022), the landlord should provide the Addendum Regarding Rental Flood Disclosure at that time, since that would be the first time it would be given.

If a new lease is signed between the same landlord and tenants and the addendum waprovided with a previous lease, does the landlord need to provide another addendum if nothing has changed?

Yes. Because a new lease is being executed, the addendum should be provided irrespective of whether the previous information has changed.

The term “100-year floodplain” is defined as any area of land designated as a flood hazard area with a 1% or greater chance of flooding each year by the Federal Emergency Management Agency (FEMA) under the National Flood Insurance Act of 1968. FEMA maintains a flood map on its website that is searchable by address, where a landlord can determine if a dwelling is located in a flood hazard area.

Flooding is defined as general or temporary condition of partial or complete inundation of a dwelling caused by any of the following:

• the overflow of inland or tidal waters

• the unusual and rapid accumulation of runoff or surface waters from any established

• water source such as a river, stream, or drainage ditch

• excessive rainfall.

What happens if the landlord fails to provide the addendum and the dwelling floods?

Section 92.0135 of the Texas Property Code states that if the landlord fails to provide the required notice and a tenant suffers a substantial loss or damage to their personal property, then the tenant may terminate the lease by giving a written notice of termination to the landlord no later than 30 days after the date the loss or damage occurred. Substantial loss means that the cost of repairing or replacing the personal property equals 50% or more of the personal property’s market value when the flooding occurred. However, the termination would not affect a tenant’s liability for delinquent, unpaid rent or other sums owed to the landlord before the date the lease was terminated by the tenant.

See the new addendum in the Blank Forms section of texasrealestate.com.

Yes. A bill passed during the 87th Texas Legislative Session does not generally exempt landlords of temporary residential leases from providing a disclosure notice about whether the landlord is aware that the dwelling is located in a 100‐year floodplain or that the dwelling has flooded within the last five years.

The new Landlord’s Floodplain and Flood Notice (TREC 54-0), or another similar form that meets statutory requirements, can be provided along with the revised Seller’s Temporary Residential Lease and the Buyer’s Temporary Residential Lease in order to meet that statutory disclosure requirement.

Yes. According to the Texas Property Code, sellers aren’t required to disclose deaths on the property that resulted from natural causes, suicide, or an accident unrelated to the property’s condition. However, murder does not fall into these categories.

Your seller can use the Texas REALTORS® Seller’s Disclosure Notice, which includes a question about deaths other than those caused by natural causes, suicide, or an accident unrelated to the property’s condition, and provides space for the seller to explain her answer. A seller may want to voluntarily disclose any death on the property since a buyer may learn the information from another source.

Yes. Although certain types of sellers, like administrators or executors of an estate, are not required to provide a seller’s disclosure notice to prospective buyers, the exemption does not apply to heirs. An heir must provide a completed seller’s disclosure notice, but may answer unknown if the heir does not have knowledge of information required by the notice. Failure to provide a completed seller’s disclosure notice may entitle the buyer to certain remedies, like terminating the contract.

Yes. The One to Four Family Residential Contract (Resale) (TXR 1601) provides that if the notice is not received, the buyer can terminate at any time prior to closing and the earnest money will be refunded.

Yes, sellers are required by law to disclose any known material information about the property’s condition—even if those conditions are revealed after the completion of the seller’s disclosure notice. While the Texas Property Code does not create a continuing duty or obligation to update the Seller’s Disclosure Notice, if information in the notice is no longer true, the seller may have a common-law duty to correct any misstatements or false impressions. The Texas REALTORS® Update to Seller’s Disclosure Notice (TXR 1418) form can be used to provide the newly discovered property information to prospective buyers.

No. Despite the request, it is up to your buyers whether they would like to send a copy of the inspection report to the listing agent or seller. A listing agent or seller who receives an inspection report is charged with knowledge of the information in the report, even if the listing agent or seller doesn’t open it. If the report reveals material defects, the seller and the listing agent are obligated to disclose those defects to subsequent potential buyers.