Good morning, everyone. We are here with our friend, Dr. Blake Bennett. He is going to break down the PIDs, talk about PIDs, give us great information and it’s going to add a lot of value to you and lower your stress level.
I think so. As we know, the PIDs have been kind of like something that we’ve all been challenged with finding out about them at closing. If your home is in a pit or a mud or a puddle or a sun or whatever it is, and it just kind of, you know, is something we are not all too familiar with and we feel a little uncomfortable. We don’t want to give wrong information.
So we’re going to discuss that today. We’re going to discuss the pit addendum. So it as of yesterday, it is a mandatory form that we must be using if the property is located in a PID. The second thing is we’re going to actually walk through step by step how to search for a pit, to search and see if your property is actually located in a pit. So you’re going to want to pay attention.
So first, let’s get started on the addendum. So we’re going to share the screen and bring over the addendum for the PIDS and show you what it looks like. So this is now in your zip forms and we’re going to be adding it to our template with some information in there that you may not know.
And we’re going to start talking about it right now. Go through it, tell us what we need to know because I’m looking at this and I, you know, I don’t, I don’t know. I don’t know any of these answers.
Well, you actually do. Shana, I mean, one of the questions that it asks you is what is the address of the property?
Ok. Oh, I hope I know that.
Hopefully, if you’re representing that property, you know the address. Hopefully you just got through typing in to get, you know, into your GPS so you can get there
There’s some other information on here that might be a little bit a little bit iffy on. I’m not for sure.
The first one that I want to point out is this form you’re required to say what law was used to create the PID itself. Was it Subchapter A, chapter three, seventy two of the local government code, or was it Chapter three? Eighty two of the local government code? Whenever I first saw this, I was thinking, why on earth are you asking this and who knows?
Why are you asking this to agents or sellers? I mean, either one of us?
We don’t know. The city may not even remember the beauty of it is Shauna. There’s 11 kids that are in Comal and Bear County that were created under Chapter three. Everything else in the state of Texas has been created under Subchapter A. Chapter three seventy two of the local government code perfect.
And you know what we’re going to do there, guys. We’re going to add that into our template so you know the proper one to use so you don’t have to overthink that.
That one’s that one’s easy. So we’ve got the address and we’ve got what law it was created under. Then we’ve got a we’ve got the form asks us to say whether it was created by the City Council or the County Commissioners Court who collects the pit assessments and that information.
We can find out we’re going to go over that in just a little bit. You know, there’s there’s a lot of I think that you’ll attest there’s a lot of sellers that may not know that their property is in a PID.
And here’s another issue that I see with this is. They’re going to ask somebody going to ask, well, how much is it? Absolutely. Which is it? And there’s nowhere on this form, you know, that says how much it is. So I see that to be an issue. So I see this, you know, we’re coming into this.
We’re responsible for filling this out. What if we put in the wrong information? Don’t worry,
There’s a caveat. Don’t worry. Don’t worry, the the law states that if the real estate agent in good faith filled this form out in good faith and there’s an error, it’s OK. It’s still applicable.
It’s still counts. Not a problem. There’s nothing that can come back on you. And ultimately your title company is going to find, yes, it’s in a pit and they’re going to have the buyer sign at closing. At least good title companies will sign at closing that. Yes, I understand I’m insipid. Ok. The only recourse that a buyer has if notice is not given before the contract is executed, they can get out and get all their money back.
It’s the same with lead based paint or any of these addendums. And the important thing is is that we are aware if it’s in this mud and you disclose it and that’s Pitt, Pitt, Pitt, Pitt and that you disclose it, that’s really the main thing that you have to worry with is that you bring awareness to your client and disclose it.
Right, exactly. And again, you may be representing someone that has no idea if they’re in a PID or not.
Yes, absolutely. So there’s what we’re going to show you as far as walking through step by step on how to fill this form out and a website that you can use to find the information. You can also use that website to find out is the property even in a PID?
Ok, so we should just make that something that’s a part of our process. So I’m going to close out the addendum, but I want you guys to go into zip forms. I want you to look at this addendum, become familiar with it. So you know what it says and what it reads, because you’re going to be asking someone to fill this out or sign it. So you need to have a general knowledge of what the form is about.
Ok. All right. So now we’re going to determine how we even look for these kids? How do we know if our property is located in a pit? So this is what we’re going to do right now, step by step on how to do it. So do you know of a property that maybe
Actually do have an address, right? I actually do, and I want to point this out. This is muni cap muni cap inc. Ok? They are. They are a repository for information on PIDS, and a lot of the cities up in Northeast Texas are using them.
And in fact, there’s cities across the state and across the U.S. that are that’s using muni cap to help collect the information and provide that information on individual properties.
And we can actually do a property search for an individual address through this website, and it’ll provide us so much information it’ll will help you out. How are you?
Sorry, I didn’t hear that. Now I believe that that you’re going to be sending out or you’re going to have available. I put together a step by step guide on how to use this website.
Yes, but and for fun, we’re going to go through this right now. Can I stop for one minute and back up? So this is strictly for PIDs, not muds. Exactly, not pads. None of the others. No, this is for PIDs.
Yes, just for kids are public improvement districts. Yes. And can you just give us a quick definition of what a PID is? You know where you would see a pit and why do they why did it use a pin for development?
Sure. PIDs are an assessment on a property. It’s not a tax, and that assessment helps to pay for an improvement on the property. And that improvement could be anything from development could be city sewer water lines coming in roads. It could be used to pay for additional police protection for an area.
So this is something that a developer will seek out from who they will.
They will petition the city.
Ok, so to try and say, Hey, we need the money. Maybe they don’t have the funds readily available to be able to start a development right?
Or the city doesn’t have the funds to bring the water lines in. And so the developer? Will say, OK, I will I will use my money and I will put those water lines in, but I want I want to be paid for it.
Of course I do. And so I’m willing to use a PID to repay me, say, over a 20 year time period. And that would be the developer
Who is going to make sure that it gets managed. It ensures that, yes, the developer is going to going to get paid for that, that assessment. Now there’s other kids that are used. Let’s say that you and your husband got together in your neighborhood and you talked enough people more than 50 percent of the owners in the neighborhood that you wanted.
Twenty four seven police protection in this neighborhood. Ok. You could petition the city to say we want that additional service. City would say, OK, it’s going to cost you.
And then you establish a PID to pay for that additional improvement for the area, you pay for it through an assessment on your property.
Ok, and is it something that you pay for and it goes away?
It can. Yes, there can be a there can be a defined life on a pier, generally 20 years, OK? And you could also the sense of where we want police police protection, it could be indefinite, right? It all depends on how the PID is
It’s not just a given that it goes away, it’s something that could be ongoing.
Exactly right. Now, most of the pins that we’re seeing up in Northeast Texas are for development. Most of the new permits are for to to pay for that infrastructure, right?
Right. Ok. All right. So let’s get started.
All right. Sounds good in the upper right hand corner, kind of hidden by our pictures. There is a thing for property search.
Yes, there is a property search. So it’s muni cap mew and I see a yes, you go to this website and you go to the property search button, which is what we’re doing right now.
Then you’re going to say, you know, that you understand the limitations you. This is their disclaimer. This is their legal disclaimer. Got it.
We understand what we’re doing.
Yes, continue the property search. Now you’re giving, you’re giving some information. So you’ve got searched the property you can search by owner name. You can search by the address. Exactly. Just just like a tax. I just happen to have an address here picked at random.
Fifty one. Forty two. Fitzgerald. Yes, I’m looking at my keyboard when I tie. It’s OK. Do you have to put in the the city? I hope,
It normally pops up at this point, OK? I may have given you the wrong address. I am very sorry on this, Aubrey. Ok, I think that I’ve given you the wrong address however we can.
We can come back. We can come back to the. What will happen is whenever you whenever you type in a correct address.
Ok, so if we do, can we? So if I put in my address,
Ok, here you go. You’ve started typing in some numbers and you can see you get a list, you get a list of here. Here are all these properties that are in a PID.
Let’s say that the very first one that you showed there was the one that you were looking for. That was the address. Yeah, click View.
Ok. This is a D.R. Horton home.
So you are home and you can see here. Here’s the most important information that goes Yes, it will help you.
Can you move our phone picture down so we can see that top? I don’t know if you can or not.
It provides everything that you need for the notice, all right. On this one page. Yes. Everything that you need for the notice is on here, OK?
And it got the insert name of Public Improvement District.
We’ll look at that name of district, the columns public improvement
District and notice that there’s a link there showing that you can. You can. Let’s click on it in a little bit, and I just want to point it out. That is a link. If you want to get the annual statement so you can see how they’re spending the money.
Oh, you can click there and you can get the annual statement. If you need the phone number for the PID, you can get it from that link that this is one of the best sites that I’ve seen. As far as everything looks the same. Everything, all the information is the same for every single PID.
Ok, but so we’ve got the name of the PID. Great. Perfect. The seller that we were representing had no idea that they were even in one. Now we have a name
My, you know, just thinking it says print property record card. I think that we should, if we find one of our properties is in a PID, this should be printed and put in the file because it has great information as far as how much this is. So the outstanding principal.
It shows that and it shows what the annual installments are.
It shows you what the annual what, how much it’s going to put the bill. You’re going to see January 1st twenty twenty one. Yes, January thirty first twenty twenty one. This tells you one of the most important questions that you said.
A buyer? Ok, I get this notice. Well, two thousand two hundred and thirty nine dollars will be due January, the 31st of twenty twenty one. Mm hmm. So it tells you exactly how much? Big question. If I was a buyer, that’s one of the main things.
That is a big question. And maybe. You would negotiate in that you want this paid off before as part of the deal, you could see that happening in the market right now, but you know, that’s over the course of a monthly payment. Maybe it’s not that much of an impact, but maybe it is.
Maybe it is. You know, when somebody stretched to the max, you know, it could add a significant amount and, you know, be detrimental.
Yes, this is another thing you guys that we need to think about when a lender is qualifying a buyer, you know, and they’re putting in all of their, you know, their debt to income ratios and all of that.
This could make or break a loan. It very well. It could really push them over that hump of not being able to qualify. Yes. So that’s really why this is, you know, I’m I’m happy because this has been such an issue for us and a confusing topic as well.
But this is a way that we can now get this out there when we’re looking at properties and not have it be a deal killer at the end. So I’m glad that this is a requirement now and that we’ve come up with a with a form for it.
Yes, it is nice that that this is available is required to be available to a to a potential buyer. But again, I have the I have more questions if you put this down in front of me, if I’m. Well, me too. I want to know how much it is.
That’s right. So that’s why I think if you put this in the file and you know this, yes, that’s going to be very helpful. What other questions would you have?
You know, it asked you what, what the name of the city or the city council that created the PID. It’s on this form. This one happens to be the city of Salina.
Mm hmm. We already know it was that Subchapter H Chapter three seventy two of the local government code was what created this PID. It gives you everything to fill out this form is on this one page.
That’s the beauty of what muni cap is put together. Now I did mention, if you’d like now, you click on the the link for what’s it? Ters, that’s a that’s a whole other TNT. Okay. If you want it.
No, no. I’m just looking at this. I’ve never seen this before, so I have a lot of questions too. Can you pay this off early?
Well, OK, that’s that’s a good question. Why don’t we click on the the the name of that PID?
Ok, let’s do this now.
Yeah, let’s let’s click on that one.
There we go. Ok. Ok, now this shows you all of the kids that are in the city of Salina, so all we need to do is go down to our. Let’s say that it was the creeks of legacy and click on the
For each phase would have would have or whatever, and each phase and each setback would have a different assessment.
Ok. And so the creeks of legacy, it gives you the project overview. This is why the pit was created. This is what happens. This is what the intent of that pit was. Go back.
They have a cliff notes, because I yes, knowing myself and other realtors, I don’t. And buyers and sellers, nobody reads anymore.
Right, Exactly. You can get you can get deep into it. But again, the nice thing about muni cap, everything is the same. And so once you find it on one form or once you find it in one place, every single PID is identical. Can you click on that frequently?
Ask questions right here. This link right here under no. They all have them. Oh, absolutely they do. Sorry.
All right, let’s do this one.
This one is great, this tells you, can you pay it off early? Absolutely. You can. Down at the very bottom, Shana. The very bottom of the second page is what I want to point out.
If you have any questions. There’s your phone number of the pit itself. Great. You can call them. Or you can call the city
The this live, should we call them and ask them a question?
It’ll be like one of the radio shows you just call up at random, right?
We’re going to do that next week. We’re just going to call people.
That’d be great. That’d be great. This this website is just wonderful for a pin. I will point out that just because a property is not located on this website does not necessarily mean it’s not in a PID.
So the city’s contract with muni cap to keep the information if a city is not contracted with muni cap, it’s not there.
Oh, so in that case, my suggestion? Go to the tax assessment, go to the tax statement itself. First, look on the tax statement,
But I didn’t believe these were on the tax statements, are they?
Yes, they can be. If the county is collecting for the bids, OK? I haven’t seen, I haven’t seen appeared in in Salina that is not collected through the county. Ok, so it will show up so it will be on your tax
Will be on the tax statement. Yes, PIDS can use outside sources to help collect the funds. In that case, it won’t be on your tax statement. Ok. Wow. Check minicab first, then check the tax statement. See if it’s on there.
It’s in a PID. Yes, and you know, it kind of goes back to when we’re searching for properties and you’re, you know, it’s always good to go and look at other properties that are in the subdivision.
Because I do that when I’m searching for a homeowners association, they may say, you know, hear what the dues are in their annual and you may go and see other properties that all have something different.
So if you’re getting mixed information, that’s a really a red flag that you need to keep searching and you need to keep looking.
So same thing if you’re like, I think this could be in a HUD, it doesn’t say it’s in a pot. I can’t find any PID. Sorry, I can’t find anything about it. Start looking at other properties and see if it was ever disclosed somewhere else that maybe you could find that information.
Yes, absolutely. And it can be. It can be scary. I know that a lot of a lot of real estate agents got worried whenever this notice came out. Don’t forget there is a new contract as well. The contract was updated to refer to this addendum.
Yeah, as of yesterday, it’s mandatory. We’ve had it in our in our zip forms. Updated So right, we have that. But you know, I’m curious, has anyone seen this form yet because it came out in September, if anyone has seen it yet, anybody used it.
I haven’t really heard anything about it. But as everything’s moving and getting developed north, we’re starting to see a lot more PIDS come into play.
Yes, they are really coming into play. Developers are using them for that infrastructure so that you can you can pay that infrastructure out over time versus paying it all up.
You know, I’ll be honest, I thought it was the other way around. I thought that the developer didn’t want to incur that cost.
So someone has to incur it and who and and the only the only group that can petition to create a PID are the people that own the land themselves. So the city cannot petition unless they own the property. You cannot have a city petition itself to create a bid.
Ok. So it has to be the landowners themselves, OK? And there are requirements as far as half of the landowners have to sign the petition to get it created.
Great. So it doesn’t matter if there’s one hundred thousand than on all this property and they all want to have a pig created or one.
Ok, if there’s one, then one hundred percent are signing the petition. So obviously as long as the cities game, it will be created.
Great. Well, this has been great information. We now have the addendum to use. Another thing I’m going to point out is I noticed here that it says something about interest collection costs, administrative costs, particularly collection costs.
If someone is not aware that they are in a bid and time years pass and they go to sell. There could be some pretty hefty collection fees there. I’ve seen that. We’ve actually seen that and the homeowner was devastated. They had no idea.
So we actually tried to negotiate that with the municipality. And it was I mean, it was years and years ago, but it was kind of a nightmare.
You look at the PID that we just randomly found in Salina. The annual assessment was twenty two hundred dollars. If I move in and I have an annual assessment of twenty two hundred and I don’t know that I’m in a PID, I don’t pay that assessment. I’m there five years. I’m there. Ten years.
Yeah, that’s 10 years is twenty two thousand dollars. If my math is right and that’s with no collection or interest interest.
So we can really get it could really generally be be an issue. So yes, but now we’re all aware and we know what to expect and what to do and how to find it, and it’s going to put you in the lead guy. So thank you. Thank you. Thank you for coming today.
You always are just a wealth of knowledge for us and we appreciate it so much. If you guys have any questions on this, let’s pick a time and let’s discuss it further. We may have more questions for you later, but for now, we’re going to close this out and you guys go and. Have a great day.
Sounds good. I’ll also point out, Shawna, that if you need any help by all means, get in touch with me. Yes, I’ll help you with your individual property searching for trying to find information.
Yes, it’s very good at that. We don’t want to abuse that. But if you ever get in a crunch and you need something, you know, he’s always available for us, which we really appreciate. All right. You guys have a great day. We’ll see you tomorrow.