Title insurance might not be available for the surface water right involved in the transaction. Also, if there is no surface acreage associated with the surface water right being acquired, a survey might not be involved, unless a separate surface use agreement or easement is required.
Checklist for Acquiring Surface Water Right
1.General description of surface water right and associated property: [address or description, e.g., property known as [specify], consisting of [specify] acres] and the water rights permit(s) or certificate(s) of adjudication associated with the surface water right
2.Seller: [name of seller]
4.Where the surface water right, and any associated property, is located: [city, county]
5.Texas Commission on Environmental Quality information:
a.Type of water permit(s):
b.Copy of permit(s)
6.Other governmental approvals required for transfer of surface water rights: [other than the TCEQ, e.g., Public Utility Commission, Railroad Commission]
7.What, if any, separate surface use agreement or easement(s) will be required to access and develop the surface water right?
8.Purchase price, including any specific value (dollar amount) allocated to the surface water: $[amount]
9.Amount of earnest money: $[amount]
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Include the following if title insurance is available for the surface water right involved in the transaction. |
10.Title company/escrow agent:
11.Number of days after the effective date for Seller to have title commitment and UCC search delivered to Buyer: [number]
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Include the following if surface acreage is associated with the surface water right being acquired, if a separate surface use agreement or easement is required, or a survey is otherwise involved. |
12.Number of days after the effective date for Buyer or Seller (as applicable) to deliver updated survey: [number]
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Modify and include the following as applicable. |
13.Number of days for Buyer to deliver title objections, to run after Buyer has received all of the following: title commitment, UCC search, and Seller’s survey or current survey: [number]
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Include the following if title insurance is available for the surface water right involved in the transaction. |
14.Number of days after Buyer sends notice of title objections that Seller has to respond to Buyer’s title objections: [number]
15.Number of days after Seller’s deadline to respond to Buyer’s title objections for Buyer to waive its objections or terminate the contract based on Seller’s failure to cure title objections to Buyer’s satisfaction: [number]
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Continue with the following. |
16.Number of days after the effective date for Buyer to inspect the property, including site of the water source, including wells, storage, treatment and conveyancing systems: [number]
17.Number of days after the effective date for Seller to deliver Seller’s records, including copies of surface water permits, well reports, water quality analysis, etc., to Buyer: [number]
18.Percentage of purchase price for casualty damage to be material, if applicable: [percent] percent
19.Closing Date: [actual date, written in the format MM/DD/YYYY, or number of days after the end of the inspection period for the transaction to close]
20.Contract contingencies (similar to shortfall in surveyed acreage):
a.If the permit is not approved for transfer of ownership, or amendment if required, what are the remedies?
b.If the permit is approved for transfer of ownership, or amendment if required, but the volume of water allowed to be produced is reduced, or new special conditions are imposed, how does that affect the purchase price or remedies?
21.Conditions precedent to closing:
a.Must the permit transfer be preapproved by TCEQ?
b.Must any permit amendment be preapproved by TCEQ?
c.If other agency approvals are contemplated, must those approvals be a condition precedent to the obligation to close?
i.Any remedies, besides waiver, for failure to approve?
ii.Can closing be delayed or continued? If so, for how long?
iii.If closing is delayed, should additional earnest money be required to “go hard”?
22.Maximum amount of Buyer’s liquidated damages that Seller owes Buyer upon Seller’s default if Buyer does not elect to enforce specific performance: $[amount]
23.Number of days after Seller’s breach of contract that Buyer must initiate action for specific performance: [number]
24.Contact information for Buyer and any additional parties to notify in the following format:
[Name]
[Address]
[Telephone]
[E-mail address]
With copy to:
[Name]
[Address]
[Telephone]
[E-mail address]
25.Contact information for Seller and any additional parties to notify in the following format:
[Name]
[Address]
[Telephone]
[E-mail address]
With copy to:
[Name]
[Address]
[Telephone]
[E-mail address]
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Include the following if title insurance is available for the surface water right involved in the transaction. |
26.Contact information for the title company/escrow agent in the following format:
[Name]
[Address]
[Telephone]
[E-mail address]
With copy to:
[Name]
[Address]
[Telephone]
[E-mail address]
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Continue with the following. |
27.Contact information for the TCEQ “Permit Writer” (if known) in the following format:
[Name]
[Address]
[Telephone]
[E-mail address]
With copy to:
[Name]
[Address]
[Telephone]
[E-mail address]