TL;DR
- An exemption from the ordinary Seller’s Disclosure Notice does not necessarily excuse the separate water-rights disclosure.
- For the non-condominium TREC contracts discussed in its FAQ, TREC says the disclosure is generally provided unless every applicable Paragraph 7I(3) statement is true.
- TREC’s Residential Condominium Contract (Resale) is excluded from the added Paragraph 7 language. That does not establish an exemption for every condominium transaction.
- Ask your agent to identify the governing contract provision. Take unresolved ownership, exception or legal-effect questions to a Texas attorney.
If you are preparing to sell a Texas home, including in the Austin area, an ordinary seller-disclosure exemption may leave another disclosure question unresolved. Check the water-rights provision separately before treating your disclosure review as complete. Otherwise, you could leave out information the applicable contract calls for. TREC’s FAQ explains the distinction.
Why the ordinary disclosure exemption does not settle the question
The Texas Real Estate Commission (TREC) distinguishes the statutory Seller’s Disclosure Notice—whose requirement comes from law—from the separate Seller’s Disclosure About Groundwater and Surface Water Rights. TREC explains that the water-rights disclosure requirement at issue comes from the TREC contract. An exemption under the ordinary notice’s rules therefore does not necessarily answer the separate contract question. Source: TREC FAQ.
TREC’s Form 61-0 has an effective date of July 1, 2026. Its stated purpose is to give prospective buyers relevant information about groundwater and surface-water rights associated with the property. That date identifies the form; it does not by itself determine whether a particular seller must provide it. Source: TREC form page.
An example: a seller believes the ordinary notice is exempt
Suppose an Austin-area seller believes an ordinary Seller’s Disclosure Notice exemption applies. The parties are using a non-condominium TREC contract containing Paragraph 7I(3). This is an illustrative assumption, not a determination that this seller qualifies for either exemption.
Skipping the water-rights disclosure solely because of that belief leaves the contract’s separate requirement unanswered. The useful comparison is between the seller’s circumstances and the actual statements in Paragraph 7I(3).
According to TREC, the disclosure is generally provided unless every applicable Paragraph 7I(3) statement is true. If every applicable statement is true, the contractual exception can change whether the disclosure is required. If an applicable statement is not true, the seller should not rely on that exception to skip the disclosure. If the exception or ownership is uncertain, obtain advice from a Texas attorney rather than treating uncertainty as an exemption. Source: TREC FAQ.
This separate review takes effort, but it helps the seller avoid omitting required information while recognizing an exception when it actually applies. For the buyer, “the ordinary notice is exempt” is a reason to check the water-disclosure provision, not a complete explanation for its absence.
What Austin-area buyers and sellers should check
The local application depends on the contract used in the Austin-area transaction. The supplied TREC guidance is statewide; it does not establish that every Austin sale uses the same form.
A seller using the non-condominium TREC contract described above and a seller using TREC’s Residential Condominium Contract (Resale) do not start with the same contract language. TREC says the latter is excluded from the added Paragraph 7 language. Identify that exact contract before relying on the exclusion; a property being called a condominium does not establish what contract governs its sale. Source: TREC FAQ.
Use this sequence while preparing a listing or reviewing an offer:
- Identify the actual contract. Ask the agent to point out its water-rights disclosure provision. This establishes which language you are reviewing.
- Check the exception separately. For the non-condominium TREC contracts discussed by TREC, read every applicable Paragraph 7I(3) statement. Do not substitute the ordinary Seller’s Disclosure Notice exemption for that review.
- Resolve uncertainty before relying on an exception. A Texas attorney should address unresolved ownership, exception or legal-effect questions. The answer can change whether the seller can rely on the exception.
- Carry the result into the transaction. If the applicable contract calls for the disclosure, ask the agent to identify its delivery requirements and track receipt. Receiving the form still leaves the buyer to review the information it contains.
For broader listing preparation, use the Austin Seller Strategy Checklist for a Smarter Sale alongside this separate contract check.
Frequently asked questions
Does the form prove who owns the water rights?
No. TREC says neither the contracts nor the disclosure definitively asks whether groundwater rights were severed, sold or leased. Do not treat a completed form as proof of ownership or of the absence of water rights. TREC directs sellers with questions about water rights they may own to a private attorney. Source: TREC FAQ.
Does a missing water-rights disclosure automatically let a buyer cancel?
The cited TREC guidance does not establish that outcome for a particular transaction. A Texas attorney would need to address the actual contract and circumstances before the buyer relies on a cancellation right or other legal consequence. This article provides general contract information, not a transaction-specific legal conclusion.
Sources
- TREC: Seller’s Disclosure about Groundwater and Surface Water Rights — Form 61-0, effective July 1, 2026; checked October 1, 2026.
- TREC: FAQs on the water-rights disclosure — published August 14, 2026; checked October 1, 2026.
Preparing an Austin-area listing or reviewing an offer? Contact Vladimir Baibus · ATXCasa, LPT Realty for help identifying the applicable disclosure provision and organizing the transaction’s disclosure checklist. Bring unresolved water-rights ownership or legal questions to a Texas attorney.