What is a Municipal Utility District (MUD)

By
Real Estate Agent with Results Realty
http://actvra.in/4lh8

When we moved to Texas 10 years ago from another state we had never heard of a MUD district.  If you live in Texas, especially the  Houston area long it doesn't take long to get acquainted with municipal utility districts.  A Municipal Utility District (MUD) is a political entity created under Texas State law, specifically, Chapter 54 of the Texas Water Code.  Since most of our subdivisions in Northwest Harris County and Southeast Montgomery County are in an unincorporated part of the county we typically get our water through MUD districts.  A MUD is similar to a small town however the MUD is limited to providing water, sewage, drainage and a few other services within the MUD boundaries.  There are over 1500 MUD districts in the state of Texas.

How does a MUD work? 

The Board of Directors is publicly elected and they control all the affairs of the MUD.  The MUD is subject to the Texas Commission of Environmental Quality.  As a public servant the board establishes policies in the interest of its constituents.  A MUD may adopt and enforce all charges, fees and taxes to provide the district facilities and services.

How will I be taxed?

MUD tax rates vary according to property values and debt requirements.  MUD rates generally decline as the MUD area is built out.  I have found a large difference in MUD rates.  I have seen them as low as .25 per 100 house value and as high as $2.00 per 100 house value.  Typically the newer subdivisions are going to have a little higher MUD tax as they have not had the time to build out.  As the subdivision gets more established the tax starts coming down.  I have come to the conclusion that having a little higher MUD tax is part of the cost associated with being in a newer area.

Is there any way around being in a MUD?

You could buy out in the country and be on your own well and septic.  Another option would be to buy in a country subdivision that has community water and then have your own septic.  However then you have to deal with well and septic issues.  I have also learned recently that the community water fee is usually higher than the water charge in a MUD but the good news is there is no MUD tax with this option.  The other option is to buy in a town but then you have an extra city tax.  I guess long story short you have to pay for your water somehow, whether through a MUD, community water or well & septic.

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Show All Comments
Rainer
97,765
Danny Smith
DISCOVER TEXAS HOMES - Round Rock, TX

Good One! Ha!

I bet a lot of folks never heard of this! Did you know that the minimm size of a MUD is 200 acres? Did you know that the average sales price of homes has to be $140,000 or more?  

Can you name the following?

  1. PUD 
  2. WUD
  3. SUD
February 09, 2007 03:21 AM #1
Rainer
13,787
Margie Kaplan
MK Luxury Homes & Condos, Houston Luxury Homes - Houston, TX
Broker, CRS, CIPS, CLHMS, CNHS, TRC
Nice article and very informative. Most buyers have no idea what MUD is.
April 02, 2007 11:04 PM #2
Anonymous
Anonymous
Paul Morgan

There is much more to MUD's than this brief article. Very few residents are concerned about the activities of their MUD. In many MUDs the meeting is held several miles from the district, making it difficult for taxpayers to participate. A lot of MUDs hold their meeting in the middle of the work day presenting another roadblock to resident participation.  Directors of MUDs do not have to be residents of the district. They can own a "director's lot". This is a very small piece of property within the MUD. The MUD elections are very low key, usually run by the district's attorney with no oversite by the county the MUD is in. The official notice for a meeting of the MUD I live in is on a small sign at the sewage treatment plant. The sign is 30 feet from the road and not noticeable. Because taxpayers don't care, districts can get away with this.

October 23, 2009 08:32 PM #3
Rainmaker
639,898
Marchel Peterson
Results Realty - Spring, TX
Spring TX Real Estate E-Pro

This past was written quite some time ago but I can't disagree with anything you said.  I ran for our local MUD district a number of years ago.  The developer did not want me on the board and ran me and my family through the mud. 

October 23, 2009 09:58 PM #4
Anonymous
Anonymous
agapee lukomides

living in houston for 17 yrs i can describe this shenanigan so called MUD or other wise "HIGH SEAS ROBERY" at best, it starts in Austin and ends whereever u live,shame on the high end politicos in this state who can't  see other places or nations in todays times.but again the remind me with diapers and for the same reason, u have to change them so often.

January 17, 2010 04:28 AM #5
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Rainmaker
639,898

Marchel Peterson

Spring TX Real Estate E-Pro
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