MUD, PID and HOA disclosures for sellers
A home in a MUD, PID or HOA comes with statutory notices the seller owes the buyer, and several are due before the contract is finally signed, not after. Missing one can give the buyer the right to terminate, and the current TREC contract says so in plain language.
This explains how home selling works in Texas. It is not legal advice and it is not tax advice. Kyle is a Realtor. For advice about your own situation, talk to an attorney or a tax professional.
If your house is in Celina, Prosper, parts of Frisco, or one of the newer developments around Little Elm, there is a decent chance you are in a MUD, a PID, or both, plus an HOA. Most sellers know their tax bill looks different from a friend’s in Plano. Fewer know that each of those things comes with paperwork they personally owe the buyer, on a clock, before the contract is finally signed.
This is not a small technicality. Getting it wrong can give the buyer a way out.
First, know what you are actually in
Before anything else, find out. A lot of people are not sure, and the tax bill alone will not always tell you cleanly.
The authority is the district and the city, not a real estate website. For a MUD, the district’s own service plan and the city or county finance pages have the current rate. For a PID, the levying city or county has the exact assessment amount for your specific property, and the annual installment is approved every year in what the statute calls the annual service plan update.
I am not going to print a rate here. MUD and PID numbers differ community to community and sometimes lot to lot, and any range I gave you could be wrong for your address. Call the city, or ask me and I will pull it for your specific property.
MUD, and why the notice comes before signing
A municipal utility district is its own taxing entity. It borrowed money to put water, sewer and drainage in the ground before the rooftops arrived, and it levies a tax rate to pay that debt back. That rate sits on top of city, county, school and hospital district taxes.
In practice that means the MUD notice should be sitting with your listing, ready to go out with an offer. If your agent is scrambling to find it after you have accepted, that is backwards.
PID, which is a different animal entirely
People lump PIDs in with MUDs and they are not the same thing.
A public improvement district is not a separate taxing entity. It is a city or county levying an assessment against your specific property to pay for improvements in the district. The important practical difference is that a PID assessment can usually be paid off in full, while a MUD tax rate is simply a rate you pay every year.
Texas Property Code 5.014 sets out the notice, and the required language is blunt on purpose. It names the levying municipality or county, the district, and the chapter it was created under, either Subchapter A of Chapter 372 of the Local Government Code or Chapter 382. Then it says, in capital letters on the form:
“AN ASSESSMENT HAS BEEN LEVIED AGAINST YOUR PROPERTY FOR THE AUTHORIZED IMPROVEMENTS, WHICH MAY BE PAID IN FULL AT ANY TIME. IF THE ASSESSMENT IS NOT PAID IN FULL, IT WILL BE DUE AND PAYABLE IN ANNUAL INSTALLMENTS THAT WILL VARY FROM YEAR TO YEAR DEPENDING ON THE AMOUNT OF INTEREST PAID, COLLECTION COSTS, ADMINISTRATIVE COSTS, AND DELINQUENCY COSTS.”
It also warns that failing to pay may result in penalties and interest, or a lien on and the foreclosure of the property. That is the statute’s own wording, not mine.
The timing rule is strict. Section 5.0141 says the notice goes to the prospective buyer before the execution of a binding contract, either separately or as an addendum or a paragraph of the purchase contract. If a contract gets signed without it, the buyer is entitled to terminate for any reason, not later than the seventh day after they receive the notice.
TREC publishes form 53-0 for this, the Addendum Containing Notice of Obligation to Pay Improvement District Assessment. There is also form 59-0, the Notice to Purchaser of Special Taxing or Assessment District.
One update worth flagging. The 2025 legislative session amended both the PID notice statute and the annexation notice statute, effective September 1, 2025. If you are working from a form or a checklist older than that, get a current one.
HOA, and the clock that actually causes late closings
If your property is subject to mandatory membership in a property owners association, you owe the buyer notice of that too, under Texas Property Code 5.012. The contract reproduces the statutory language in Paragraph 6E(2). One detail from the statute that shows how seriously it is taken: the second paragraph of that notice, the one about assessments and foreclosure, has to be in bold print and underlined.
The bigger practical issue is the resale certificate, and this is where deals slip.
Under Texas Property Code 207.003, once the association receives a written request from you, your agent, the buyer, the buyer’s agent, or the title company acting for either of you, and verifies the requester’s authority, the association has ten business days to deliver:
- A current copy of the restrictions applying to the subdivision
- A current copy of the association’s bylaws and rules
- A resale certificate prepared no earlier than the sixtieth day before it is delivered
And there are caps on what they can charge. No more than $375 to assemble, copy and deliver that package, and no more than $75 to prepare and deliver an update to a resale certificate.
If they blow the deadline, you are not stuck. Section 207.004 gives the owner a real remedy.
You send a second request, by certified mail return receipt requested or hand delivered with a receipt. If the association still fails to deliver before the fifth business day after that second request, you may seek any combination of a court order compelling the information, a judgment of not more than $5,000, court costs and reasonable attorney’s fees, and a judgment letting you deduct those amounts from future regular or special assessments. You can also give your buyer an affidavit stating that two written requests were made and the association did not deliver.
Almost nobody uses that. Most people just wait and get anxious. Knowing it exists changes the tone of your second phone call.
Ten business days is two calendar weeks, and management companies are not always fast. Request it the week you list. Not the week you go under contract.
Who is exempt
The PID notice has its own exemption list in section 5.014(c), and it tracks the ones on the other seller notices. Transfers under a court order or foreclosure, by a bankruptcy trustee, to a lender, by a fiduciary administering a decedent’s estate, guardianship, conservatorship or trust, between co-owners, to a spouse or direct relative, to or from a governmental entity, and transfers of only a water, mineral, leasehold or security interest.
There is also a rule people miss: a purchase contract with a performance period of less than six months counts as a sale requiring the notice. A short-fuse deal does not get you out of it.
The estate exemption comes up here for the same reason it does on the property condition disclosure. If you are an executor selling an inherited house in a PID, you may be exempt from delivering that notice. It is still worth delivering, because a buyer who finds out about an assessment after closing is a buyer with a grievance, exemption or not.
Why this matters more in some cities than others
Celina had 1,057 single-family homes on the market in July 2026. That is more inventory than McKinney, in a city a fraction of the size, and a lot of it is new construction where districts are common.
If you are selling a resale house in a place like that, you are already competing with builders. A buyer comparing your house to a new build is going to look hard at the total monthly cost, and district taxes are part of that whether you bring them up or not. The version where you have the numbers ready and explain them plainly beats the version where the buyer discovers them from a lender three weeks in and starts wondering what else you did not mention.
If this happens: you find out mid-contract that the PID notice never went out
What is actually true
This is fixable, but the clock is real. Under 5.0141 the buyer can terminate for any reason not later than the seventh day after they receive the notice. Delivering it late starts that window rather than closing it.
Your options
What I would do
Get it delivered today and get proof of delivery. Waiting does not shrink the window, it just moves it later into your contract, closer to closing, where a termination costs you the most. And do not try to paper over it. Paragraph 22 already told the buyer this is grounds to terminate.
If this happens: the HOA has not produced the resale certificate and closing is next week
What is actually true
This is one of the most common causes of a delayed closing in North Dallas, and it is usually the management company, not the buyer or the lender.
Your options
What I would do
Do the second request in writing the moment you are worried, because the remedy in 207.004 only exists if you actually made two documented requests. Then amend the closing date with TREC form 39-11 rather than letting the date pass. Missing a closing date puts you in default under Paragraph 15, and being right about whose fault it was does not undo that.
Where this fits
These notices are part of the larger pile of things you owe once you are selling, and most of them have to be handled before you list rather than after you accept. The main seller’s guide covers the rest of the timeline, and the seller’s disclosure notice covers the property condition form, which is separate from all of this.
If you are not sure which districts your house sits in, that is a five minute question and worth asking before your house goes live rather than while you are under contract.
Frequently asked questions
A MUD is a municipal utility district, its own taxing entity that builds and runs water, sewer and drainage, and it levies a property tax rate on top of your other taxes. A PID is a public improvement district, where a city or county levies an assessment against your specific property to pay for improvements. A MUD is a tax rate. A PID is an assessment that can often be paid off in full.
Yes. Texas Property Code 5.014 requires the seller to give a written notice, and 5.0141 requires it before the binding contract is executed. If it was not given, the buyer may terminate for any reason not later than the seventh day after they receive it.
Before the contract is finally executed. Paragraph 6E(3) of the TREC contract states that Chapter 49 of the Texas Water Code requires the seller to deliver and the buyer to sign the statutory notice about the district's tax rate, bonded debt and standby fee prior to final execution of the contract.
Ten business days after a written request under Texas Property Code 207.003. They may charge no more than $375 to assemble, copy and deliver the documents, and no more than $75 to prepare and deliver an update.
Send a second written request by certified mail return receipt requested or hand delivery. If they still fail before the fifth business day after that, Texas Property Code 207.004 lets the owner seek a court order, a judgment of up to $5,000, court costs and attorney's fees, and permission to deduct those amounts from future assessments.
Keep reading
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Sources
Questions about your own sale?
Every house is different. If you want this applied to yours, reach out and I will walk you through it.
Contact Kyle