The New TREC Water Disclosure: What Texas Agents Need to Understand Before Checking Paragraph 7(I)
Texas agents are still getting comfortable with the contract forms that became effective July 1, 2026. One of the biggest sources of confusion is the new Seller’s Disclosure About Groundwater and Surface Water Rights, TREC Form 61-0. This form is also called the “Water Disclosure” form.
That confusion about this new form is understandable. The form is similar in appearance to the familiar Seller’s Disclosure Notice. But it is a very different form that works in its own way. Its subject matter is unfamiliar to many residential agents. Some of the questions require information that sellers may never have considered, and the new contract language creates an important decision about whether the disclosure must actually be delivered to the buyer.
The issue is significant enough that the TREC Broker-Lawyer Committee has already received multiple questions and comments about the form. At its July 10, 2026 meeting, the committee discussed future clarification concerning certain terms used in the form as well as the need for additional educational resources for license holders. So we are certain to see more developments concerning this form and water disclosure in general.
But for now, for listing agents, the safest approach with this new form is to be proactive and build the Water Disclosure form into the listing process.
Start With the New Form and the Revised Contract
TREC Form 61-0, Seller’s Disclosure About Groundwater and Surface Water Rights, became effective for mandatory use on July 1, 2026. Its purpose is to provide prospective buyers with information concerning groundwater and surface-water rights associated with the property.
The newest revision to the One to Four Family Residential Contract (Resale), TREC No. 20-19, also became effective July 1, 2026. In that newly revised version, Paragraph 7(I) addresses the Seller’s Water Disclosure. It requires the parties to select one of three alternatives concerning delivery of the Water Disclosure form. Either: the seller has already delivered it as of the Effective Date, or the seller has not delivered it but will within an agreed number of days, or the seller is not required to provide the form to the buyer because all five of the listed statements in the contract form are true.
That is the first important distinction, and one we need to keep in mind:
The Water Disclosure form is the seller’s disclosure of their knowledge about about water and water rights. Paragraph 7(I) of the purchase contract determines how that disclosure is handled in the transaction and whether the completed water rights form is given to the buyer.
Those are related steps, but they are not the same thing.
Do Not Treat the Water Disclosure Like the Seller’s Disclosure Notice
Agents already know that the traditional Seller’s Disclosure Notice required by Texas Property Code §5.008 has statutory exemptions, or circumstances where the Seller’s Disclosure Notice is not required to be given. Paragraph 7(B) of the TREC resale contract even includes a specific checkbox stating that the seller is not required to furnish the Seller’s Disclosure Notice under the Texas Property Code.
But the Water Disclosure is different, and paragraph 7(I) works differently.
Neither the Water Disclosure form nor Paragraph 7(I) in the contract provide any exemption for an executor, administrator, trustee, fiduciary, builder, or other type of seller. In fact, as things stand right now, none of the statutory exemptions for the Seller’s Disclosure Notice apply to the Water Disclosure.
Instead, Paragraph 7(I)(3) of the purchase contract states that the seller is not required to deliver the Seller’s Water Disclosure – but only when all five factual conditions stated in the contract are true. Those conditions concern the seller’s awareness (or lack of awareness) of wells, ponds, lakes or water tanks, surface-water rights, severed or leased groundwater rights, and whether the property receives water only from an identified public or private water supplier. If any of the five statements in Paragraph 7(I)(3) of the purchase contract are not true, then the Water Disclosure must be given.
An executor may be exempt from providing a Seller’s Disclosure Notice under the Property Code, but being an executor does not, by itself, satisfy Paragraph 7(I)(3). The same is true of a trustee.
In addition, the fact that a home is new construction does not itself eliminate the water-disclosure issue. TREC applied the water-disclosure changes across its applicable contract forms, including the new-home forms. In fact, the only type of property for which TREC has promulgated a purchase contract that does not require the Water Disclosure is a residential condominium. For every other promulgated contract form, the parties must address the Water Disclosure.
Practical takeaway
Do not attempt to carry the exemption rules from the Seller’s Disclosure Notice over to the Water Disclosure form. They are different forms, governed by different legal and regulatory provisions, and they answer different questions.
A Listing-Side Best Practice: Always Have the Seller Complete the Form When You Take the Listing
Nothing in Paragraph 7(I) says that every completed Water Disclosure form must be delivered to the buyer. In fact, Paragraph 7(I)(3) expressly contemplates transactions in which delivery is unnecessary because all five conditions listed in the contract form are satisfied.
But that does not mean the listing agent should wait until the contract is being written to start asking the questions.
A much cleaner brokerage practice – and the one I recommend – is to have the seller complete and sign the Water Disclosure form during the listing process, even when it later turns out that the seller is not required to deliver it to the buyer as part of the transaction.
But why have the seller complete the form if they later will not have to provide it to the buyer?
Because the disclosure gives the seller a structured way to address the very facts that determine whether delivery of the Water Disclosure form will be required. The form assembles the facts on which the seller and listing agent will base their decision on whether to provide the form or not.
Among other things, the form asks if:
- Any portion of the property is located in a Groundwater Conservation District or subsidence district;
- The seller is aware of one or more water wells on the property;
- Wells are in use or are no longer in use;
- Water comes from a well located on another property;
- A well relies on groundwater rights from outside the property;
- Groundwater rights have been severed, sold, or leased;
- The seller owns associated surface-water rights; and
- A pond, lake, or water tank exists on the property.
Having the seller work through those questions before an offer arrives makes the decision of whether to provide the Water Disclosure form to the buyer much easier to evaluate. It requires the seller to provide the raw facts in writing that will determine whether the form is required in the purchase transaction.
To be clear, TREC does not mandate that every seller must complete the Water Disclosure form. But my recommendation to all listing agents is to have the seller complete the form as part of the seller’s listing “homework,” whether or not the seller and listing agent ultimately decide the form must be given to the buyer. It’s far better to have the completed form and not need it than to need the form and have to scramble to get it from the seller.
The Seller Answers the Questions — Not the Agent
The Water Disclosure form is a disclosure of the seller’s knowledge concerning groundwater and surface-water rights as of the date the seller signs it. That means the listing agent should resist the temptation to turn the form into an interview in which the agent supplies the answers. The information must come from the seller.
For example, an agent should not tell the seller:
“You should mark ‘No’ here.”
or
“This property is on city water, so none of this applies.”
The seller is the one who must make the disclosure.
The agent’s role is different. The agent can explain the purpose of the form, identify the information the form requests, provide appropriate factual resources, and encourage the seller to obtain legal or technical assistance when necessary.
That distinction becomes especially important when the questions move beyond obvious physical conditions and into matters such as ownership of groundwater rights, severances, leases, permits, or surface-water rights.
The form itself warns that water rights can be complex, that sellers may not have complete knowledge of them, and that a specialized water-rights attorney should be consulted when the parties need to determine the extent or application of water rights or if there is any intention to reserve, except, or separately convey them.
Agents Can Help Sellers Locate Groundwater District Information
One question on Form 61-0 asks whether any portion of the property is located within a Groundwater Conservation District or subsidence district and, if so, asks for the district and its website. While the agent cannot answer that question for the seller, that does not require the agent to leave the seller completely on their own.
The Texas Water Development Board maintains an official map of confirmed Groundwater Conservation Districts and provides district information and links. As of its current published information, Texas has 98 confirmed groundwater conservation districts covering nearly 70% of the state.
A listing agent can provide that map as a factual resource and encourage the seller to use it when completing the form. By providing the map and explaining how it works, the agent can give the seller the information needed to answer the question without overstepping and making the disclosure in place of the seller.
“No Well” Does Not Automatically Mean “No Form”
Another potential mistake is focusing only on whether the property has a water well. The Water Disclosure form addresses much more than just the presence of water wells on the property.
Paragraph 7(I)(3) of the purchase contract requires all five of its conditions to be true before that option applies.
For example, the seller must also lack any awareness of a pond, lake, or water tank; lack any awareness of specified surface-water rights; lack any awareness that groundwater rights have been severed, sold, or leased; and the seller must state that the property must receive water only from an identified municipality, MUD or other special district, water supply corporation, or private water supply company.
So the seller and listing agent should ask more than just:
Does the property have a well?
Instead, the better question is:
Based on the information in the Water Disclosure form, can every condition in Paragraph 7(I)(3) truthfully be satisfied?
That is a much better checklist for agents to keep in mind.
An Inactive or Abandoned Well Still Counts
The form asks whether the seller is aware of one or more water wells on the property and then separately asks about wells that are currently in use. The form then asks about wells that are not currently in use and have been capped, covered, plugged, or abandoned. Paragraph 7(I)(3)(a) likewise refers to a water well on the property “in use or not in use.”
So an old well does not disappear from the analysis merely because it is inactive. If there is any water well on the property, whether in use or not, whether active or inactive, then the answer to the question should be – yes, there is at least one water well on the property.
That is an important question to include in listing conversations, particularly on older homes, acreage properties, rural tracts, and properties that were converted from well water to another water source. Or in situations where a third party might be leasing water rights for their own purposes, such as mineral extraction operations (frakking), AI data centers, etc.
Delivery Timing Can Create a Buyer Termination Right
The Water Disclosure also deserves attention because delayed delivery can have contractual consequences.
Under Paragraph 7(I), the parties can indicate that:
- the buyer has already received the disclosure;
- the buyer has not received it, and the seller will deliver it within an agreed number of days after the Effective Date; or
- delivery is unnecessary because all five conditions in Paragraph 7(I)(3) are true.
If the parties use the second option and the buyer does not receive the disclosure, Paragraph 7(I) provides the buyer a contractual termination right anytime before closing. If the Water Disclosure is delivered at any time after the Effective Date, the buyer generally has seven days after receipt—or until closing, whichever occurs first—to terminate for any reason and receive back the earnest money.
That creates an obvious transaction-management lesson:
If the Water Disclosure will be required, obtaining it during the listing process and providing it before the contract is signed is much better than discovering after contract execution that the seller still needs to complete it.
A document that could have been handled before the listing went active can otherwise create a new post-contract deadline and a new termination window for the buyer.
Do Not Assume Every Question Has Already Been Settled About Water Disclosure
The form is new, the notion of disclosing water rights in residential real estate transactions is new, and some practical questions remain under discussion.
At its July 2026 meeting, the Broker-Lawyer Committee received comments and questions concerning Form 61-0 and identified several matters for possible future review, including:
- The meaning of “water tank” on the property;
- Whether streams should be addressed differently; and
- The meaning of “receives” within the disclosure requirements.
The committee also discussed the need for additional educational resources for license holders. So the confusion is real, and the relevant committee at TREC is aware of it. Nonetheless, confusing situations probably will come up as agents integrate the new form into their transactions. When that happens, fall back on the actual text of the form and your broker’s guidance. The worst thing to do is try to wing it and make things up as you go along.
A Practical Listing Workflow
For listings involving a TREC contract that contains Paragraph 7(I) (that is – anything other than a residential condo), consider adding the following process to your listing checklist:
- Ask the seller to complete the Water Disclosure form during the listing process.
- Explain that the seller—not the agent—provides the answers based on the seller’s knowledge.
- Provide factual resources, such as the TWDB Groundwater Conservation District map, when helpful.
- Have the seller identify any water wells on the property, including inactive or abandoned wells, and regardless of what the water is (or was) used for.
- Do not assume that city or public water automatically eliminates the disclosure requirement.
- Review the completed information before an offer arrives so the appropriate Paragraph 7(I) choice can be addressed when the contract is prepared.
- If the form is delivered, preserve the completed disclosure and evidence of delivery in the transaction file.
- Escalate questions concerning water-right ownership, severances, reservations, leases, or legal interpretation to the appropriate attorney.
By establishing and using an identifiable and repeatable process concerning water rights and the new Water Disclosure form, agents can eliminate sources of confusion and potential trouble for their sellers, themselves, and their brokers.
The Broker-Review Test
Imagine reviewing the listing file on a given property six months later.
Could you determine:
- What information the seller provided concerning water and water rights?
- Whether a well or other relevant water feature was disclosed?
- Why the contract treated the Water Disclosure form as deliverable or not deliverable? Required or not required?
- If the form was delivered, when and how the buyer received it?
- Whether an unresolved legal question was appropriately escalated rather than answered by the agent?
If the file answers those questions without relying on the agent’s memory, the process is doing what it should.
The Bottom Line
The new Water Disclosure should not be treated as simply another page to attach to every contract, or a form to ignore when a seller is exempt from the traditional Seller’s Disclosure Notice.
It is its own disclosure, with its own subject matter, and with its own treatment under Paragraph 7(I).
For listing agents, the best practice is to address the Water Disclosure form at the time the listing is signed and definitely before the property goes under contract. Let the seller disclose the seller’s knowledge. Give the seller appropriate factual resources. Do not supply the seller’s answers. Then use the completed information to help the parties address Paragraph 7(I) correctly when an offer is prepared.
Getting that process right at the listing stage is much easier than trying to reconstruct the answers after the contract has already created a delivery deadline and a potential termination right.
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About Michael Hughes
Michael Hughes is a Texas real estate attorney, broker, educator, and former Managing Broker for eXp Realty Texas, where he oversaw compliance operations for nearly 10,000 agents statewide.
With more than 20 years of legal experience and over a decade in Texas real estate brokerage, Michael helps agents navigate contracts, compliance, risk management, and transaction systems through First Rate Agent and Advantage TC.
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