Texas Fire Damage Property Law: What Changes at the State Line

What Texas Requires You to Disclose About a Fire

Texas Property Code section 5.008 obliges a seller of residential real property comprising not more than one dwelling unit to give the buyer a written notice of the property's condition, in the statutory form or one substantially similar. The form is a checklist, and among the conditions the seller must mark aware or not aware is previous fires. It sits alongside previous flooding, previous structural repair, and previous termite treatment as one of the handful of repaired conditions that remain disclosable even after the repair is complete.

The standard is knowledge, not investigation. Subsection (d) says the notice is completed to the best of the seller's belief and knowledge as of the date it is signed, and that indicating an item is unknown is itself compliance. You are not required to commission an engineer to characterise damage you cannot see.

Timing carries a remedy. Where the notice is not delivered as required, section 5.008(f) lets the buyer terminate the contract for any reason within seven days of receiving it. Failure to disclose a known material condition can also expose a seller to claims under the Deceptive Trade Practices Act and the statutory fraud provisions, which is why sellers who market a property as-is still complete the form honestly. As-is language allocates the cost of unknown defects. It does not license concealment of known ones.

The legislature added flood questions to the same form after Hurricane Harvey. Sellers now disclose whether the property sits in a FEMA-designated 100-year or 500-year floodplain, whether it lies in a reservoir flood pool, whether it has flooded, and whether flood insurance proceeds have been received. For a fire file in the Gulf Coast region these answers frequently matter more to a buyer's lender than the fire itself.

Does an As-Is Sale Remove the Texas Disclosure Duty?

Who Controls the Insurance Money, and the Clock They Are On

The Prompt Payment of Claims Act, Chapter 542 subchapter B of the Texas Insurance Code, imposes three deadlines on the carrier and attaches a statutory penalty when any of them is missed.

Two adjustments matter. Where the loss arises from a weather-related catastrophe, every deadline extends by 15 calendar days. And where the claim involves forces of nature, Chapter 542A supplies a different interest calculation that currently produces a lower rate than the 18 percent figure above. An ordinary house fire is neither, so the standard deadlines and the standard penalty apply.

What the statute does not do is decide who receives the cheque. That is contract, not code: the mortgagee clause in the policy typically gives the lender an interest in loss proceeds, and servicers customarily place them into a restoration escrow released against inspected construction progress. Where an owner intends to sell rather than rebuild, the servicer's escrow release process is usually the longest item on the schedule, and it is worth opening that conversation the same week the claim is filed.

What Is the Deadline in Texas for an Insurer to Accept or Reject a Fire Claim?

Public Insurance Adjusters: Licensing and the Fee Ceiling

A public insurance adjuster represents the policyholder rather than the carrier and is licensed by the Texas Department of Insurance under Chapter 4102 of the Insurance Code. Three provisions are worth knowing before signing anything.

• Section 4102.104 caps the total commission at 10 percent of the insurance settlement on the claim, however the fee is structured. An hourly rate, a flat fee, a percentage, or a combination all fall under the same ceiling, so stacked service charges that push the effective total past 10 percent are outside the statute.
• Subsection (e) prohibits a public insurance adjuster from signing or endorsing a payment draft or cheque on the insured's behalf, regardless of what authorisation the insured has given. Money moves to the policyholder, not through the adjuster.
• The engagement must run on a written contract, and licence status is verifiable through the Texas Department of Insurance before you sign.

A separate provision limits the fee where the carrier pays or commits in writing to pay policy limits within 72 hours of the loss being reported, which occasionally happens on a total loss. In that situation the percentage-of-settlement structure is not available to the adjuster at all.

Who Is Allowed to Sell Your Purchase Contract

Texas permits contract assignment without a real estate licence and then conditions it heavily on disclosure. Occupations Code section 1101.0045 allows a person to acquire an option or an interest in a contract to purchase real property and to sell or assign it, provided that person does not use the contract to engage in real estate brokerage and discloses the nature of the equitable interest.

The written disclosure requirement now sits at Property Code section 5.0205, redesignated from section 5.086 effective 1 January 2024 by Senate Bill 1577. The current rule runs in both directions: the assignor must disclose in writing to the potential buyer that it is selling only an option or assigning a contract and does not hold legal title, and must disclose to the property owner that it intends to sell the option or assign the contract. Acting in a brokerage capacity without a licence is a Class A misdemeanour under Occupations Code section 1101.351, and the Texas Real Estate Commission can also issue cease and desist orders and administrative penalties against unlicensed persons.

For a seller, the operative point is narrow and useful: if the person who signed your contract intends to assign it, the law requires them to tell you so in writing, before the fact. The absence of that disclosure is not a technicality. It is the statutory line between a lawful assignment and unlicensed brokerage.

Statewide Conditions That Shape a Texas Fire Sale

No State Transfer Tax

Texas does not impose a state real estate transfer tax. The transaction cost of moving title is the county clerk's recording fee and whatever the parties negotiate on title insurance and escrow. Because the fee is set at county level under Local Government Code section 118.011 and varies, it appears on each metro page rather than here.

Windstorm Coverage on the Coast

The Texas Windstorm Insurance Association, established under Insurance Code Chapter 2210, is the wind and hail insurer of last resort for 14 designated coastal counties and parts of Harris County. The Texas FAIR Plan Association under Chapter 2211 plays the equivalent role for residential property statewide where voluntary-market coverage is unobtainable. For an owner rebuilding rather than selling, eligibility for coverage in the designated catastrophe area generally depends on obtaining a windstorm certificate of compliance from the Texas Department of Insurance, which is inspected during construction rather than issued afterwards. This is the single largest regulatory difference between the coastal edge of the state and its inland side.

Asbestos Before Demolition

Demolition notification and survey duties come from the Texas Asbestos Health Protection Rules administered by the Department of State Health Services together with the federal NESHAP standard. Under the department's published decision tree, a single-family dwelling, or an apartment or condominium building of four or fewer units, demolished on its own falls outside both rule sets and needs neither a survey nor a notification. Where the structure is a public or commercial building, or where several buildings on one site are being taken down together, a survey is required and notification must reach the department at least ten working days before work begins.

How the Answer Varies Across Texas

The statutes above read the same in every county. Three regional differences change how they land.

The Gulf Coast band carries the windstorm layer described above, and the interaction of wind, flood and fire coverage on one property makes claims here slower and more contested than elsewhere in the state. The urban interior, including most of the Dallas–Fort Worth and Austin markets, has neither the windstorm regime nor the stricter municipal floodplain standards found on the coast, so a fire file there is closer to a straightforward construction question. Rural and unincorporated Texas often has no municipal building department at all, which removes the permitting variable and replaces it with a septic and water-well layer administered by the county and the Texas Commission on Environmental Quality.

The upper Gulf Coast is unusual in that it contains all three patterns inside one commuting radius. A property in Galveston County sits in the windstorm regime; a property in the City of Houston sits under a floodplain elevation standard stricter than the federal minimum; a property in unincorporated Harris County sits under county permitting that only began requiring residential permits in 2009. The service area index for the metro sets out which of those applies where.

Where the Texas Rules Land Differently Inside One Metro

Statute is uniform across Texas, but the office that administers it is not. Inside a single metropolitan area a fire-damaged property can fall under a home-rule city with zoning, a home-rule city without it, an unincorporated county, or all three at once. The pages below are organised by which regime governs the structure, because that is the variable that changes what an owner has to do.

Where the county is the permitting authority, there is no municipal building department in the chain at all: that regime, and the 2009 threshold that decides whether a house has permit history on file, is set out under Cypress and the wider Cy-Fair area, under unincorporated county permitting rules, and the same pattern reaches the outer subdivisions covered by Tomball, a city inside a larger county area. Two localities are split by a county line rather than a city limit, which changes the clerk and the fee: Spring, divided by a boundary that follows Spring Creek and Baytown, a city crossing into Chambers County.

Municipal zoning is the exception in this region rather than the rule, and it changes the rebuild question from cost to entitlement. It applies in Pasadena, a zoned city of post-war housing and in Pearland, a zoned city spanning three counties. Annexation produces the same result by a different route in Kingwood, a suburb inside the city limits, where city ordinances govern a community that predates its own annexation.

Elsewhere the private layer does more work than the public one. Deed restrictions and architectural committees govern rebuild appearance in Sugar Land, with master-planned sections with private review and in Missouri City, a city split across two appraisal districts. Special districts add their own tax and disclosure obligations in Katy, whose subdivisions inside utility districts carry their own tax. Coastal designation adds a windstorm inspection requirement in League City and the rest of Galveston County catastrophe-area property, and a different county entirely records deeds for Conroe and property north of the Montgomery County line.

The full index, with the permitting authority and recording office named for each, is on our service area index for the metro.

State-Scope Questions