Special Laws Prohibit Sales of Some Border-Area Residential Lots

Property owners, brokers, and salespersons along the Texas-Mexico border need to be aware of special laws that forbid advertising and selling a rural residential lot that lacks water and sewer facilities or that has not been platted.

In the past decade, the Texas Legislature has adopted a number of laws to address problems of "colonias," substandard residential subdivisions without proper infrastructure. One such law, Subchapter B of Chapter 232 of the Texas Local Government Code (sections 232.021-232.043), contains special requirements for subdividing, advertising, selling, and connecting utilities to residential subdivision lots. Under amendments effective Sept. 1, 1999, Subchapter B applies to virtually any subdivision with two or more residential lots outside city limits in 28 Texas counties near the Texas-Mexico border (specifically, those counties that have any part within 50 miles of the border). Beginning Sept. 1, 2003, Subchapter B does not apply to a subdivision in which each lot is 10 acres or larger.

Section 232.040(b) provides that a lot -- even a platted lot -- may not be sold if its water and sewer services do not meet minimum state standards, unless the lot has been platted or replatted in accord with Subchapter B (thereby providing financial guarantees for those utility services). The only exception is if the lot owner resides on the lot and is not the subdivider or an agent of the subdivider who created the lot. Thus, sellers and their agents (including brokers and salespersons) need to know that before a residential lot may be sold or offered for sale, it must generally have adequate water and sewer service either installed or financially guaranteed (through platting or replatting under Subchapter B). This includes an on-site sewage facility, if needed.

Section 232.035(a) forbids the sale of a lot, by either the subdivider or the subdivider's agent, if the lot has not been platted as required by Subchapter B. A violator faces substantial civil penalties: a minimum of $10,000 for each lot sold or offered for sale. If a rural residential lot is not shown on a subdivision plat properly approved and filed for record with the county, an agent should be sure that the seller is not the subdivider who created the lot before becoming involved in a transaction.

Under section 232.021(9), selling includes offering to sell. Therefore, it is illegal to offer for sale or advertise a lot that may not legally be sold. Under section 232.033(a), every advertisement (other than a small "for sale" sign on the lot) must accurately describe the availability of water, sewer, gas, and electric utilities.

Utility services and connections to lots in border-area counties are subject to restrictions by both cities and counties. Municipal restrictions in Local Govt. Code sec. 212.012 apply within city limits and city extraterritorial jurisdictions (ETJ's). County restrictions under section 232.029 of Subchapter B apply to residential lots outside city limits. City and county planning departments may be able to provide information on the platting or utility status of a lot.

The 28 counties covered by Subchapter B are: Brooks, Brewster, Cameron, Crockett, Culberson, Dimmit, Duval, Edwards, El Paso, Hidalgo, Hudspeth, Jeff Davis, Jim Hogg, Kenedy, Kinney, La Salle, Maverick, Pecos, Presidio, Starr, Sutton, Terrell, Uvalde, Val Verde, Webb, Willacy, Zapata, and Zavala.

Revised: May 06 2010