By Samantha Fox, Ponderosa Advisors
House Bill 1221, recently signed into Texas law, requires sellers of residential real estate to disclose whether any part of a property is in a groundwater conservation district (GCD) or subsidence district. The law affects all transfers taking place January 1, 2016 or later.
It officially incorporates groundwater as an important component of real property, but the law expressly states that it does not apply “unless the seller has actual knowledge on the date of the notice that the real property is located” in a GCD, and does not “create any duty for any person to investigate to determine if the residential real property is located” in a GCD. So if you simply don’t know, you’re not required to find out.
Sellers are protected from having to do anything extra unless they know whether the property is in a GCD. Then they must disclose, and when they do, this is a welcome protection for the buyer, and it’s also good for the GCD, raising awareness about local groundwater development and protection.
But as always, if the seller doesn’t know something, buyer, beware. By not investigating this for yourself, you could be in for an unwelcome surprise after you close on a property. Five things to know before you purchase:
- If you intend to drill a water well on your newly acquired land and if the property is in a GCD, there may be requirements or restrictions to learn ahead of time. These rules can affect what you are able to do with the land, so it is important to understand them.
- There may be minimum well spacing requirements. Do you have enough property to drill a well? Has the area hit its wells per section limit? If you’re buying an existing well, are you in a good position because no more wells can be drilled around you? Every district has different rules, so it pays to check.
- Some districts have grandfathered the water wells that were drilled before the district was formed, and may permit new ones with a lower pump rate – in that case, you may want a property with a reliable well already on it. Even then, your historical well may be limited to its historic use, so you need to investigate past use.
- If your property isn’t covered by a GCD, you could find yourself in a situation like the Hays County folks last year, who narrowly avoided massive and unfettered extraction and export of their groundwater to nearby cities.
- Say your neighbor drills a large well and draws down your well’s water level. If you’re not in a GCD, or no permit is required by your GCD, you’ll have no notice of the potentially problematic well. If your GCD does require a permit, is your neighbor’s new well exempt from permitting? Are there nearby wells that have already been permitted and may affect the groundwater on your property? Does the GCD enforce production limits? Is your neighbor exempt from them? Know your risk.
If property you own is in a GCD, you have an opportunity --and some would say responsibility-- to be informed and involved in its rulemaking and operations. Groundwater districts exist for the protection of shared groundwater, to ensure long-term supply. Local citizens in Texas are involved and put in countless hours to deal with groundwater issues for their districts; local input is extremely valuable to GCDs. If groundwater hasn’t been on your radar, you may be in for some big surprises – some areas of Texas are in dire straits, water-wise. Go to Water Sage Texas for a quick and easy way to access important data and get informed.