In a Texas land contract, the paragraph about water service is short and easy to skim. It says the property "may be located in a certificated water or sewer service area." It says "there may be special costs or charges" before service begins, and "there may be a period required to construct lines or other facilities." Then it tells the buyer to find out the rest.
That paragraph comes from Texas Water Code §13.257. In unincorporated Grayson County, the answer it leaves blank changes from one tract to the next. Two parcels with the same acreage, the same road frontage and the same list price can come with different first-meter costs, different limits on extra meters, and different capacity on the line at the road. A buyer never picks the provider. The utility that holds the certificated area picks the buyer.
Who Has to Hear About It, and When
The Public Utility Commission of Texas describes a certificate of convenience and necessity, or CCN, as the exclusive right of a retail utility to provide service in a defined geographic area. Once a tract sits inside one of those areas, that utility is the provider for it.
Under §13.257, a seller proposing to sell property in a utility service provider's certificated area must give the purchaser written notice. The notice has to be delivered before a binding contract is signed, either on its own or as an addendum or paragraph of the contract. If the seller never provides it, the purchaser may terminate. If it arrives late and the buyer closes anyway, the statute presumes the buyer has waived those rights.
The statute lists 11 exceptions. One of them matters most for country property. The notice requirement does not apply to a transfer of property that already receives water or sewer service from a utility service provider on the transfer date. So a farmhouse with an active meter can change hands without the notice. Bare pasture is where it comes up, and bare pasture is where none of the costs the notice warns about have been paid yet.
The notice also gives no dollar figure. Its own instruction is to "contact the utility service provider to determine the cost that you will be required to pay." Here is what that call turns up across the rural systems serving Grayson County.
The Posted Price of a First Meter
The Texas Water Development Board's Grayson County planning summary lists Luella SUD, Starr WSC, Pink Hill WSC, Two Way SUD, Kentuckytown WSC and Southwest Fannin County SUD among the systems in the county, and lists Mustang SUD as a water user group with Marilee SUD as its associated system. Their posted new-service costs, as of late October 2026, look like this:
| Utility | Office | Posted cost for standard residential service | Not included |
|---|---|---|---|
| Luella SUD | 36 L WSC Road, Sherman | $4,500 total: $3,200 improvement fee, $1,000 meter set, $100 CSI fee, $200 deposit | Road bore adds $1,000 |
| Starr WSC | PO Box 1043, Denison | $250 membership, $4,000 front-end capital contribution for a ¾-inch meter, $75 inspection fee | Larger meters cost more |
| Two Way SUD | 1201 Sherman Drive, Whitesboro | $5,950, including a $150 refundable deposit | Road bores and line extensions |
| Southwest Fannin SUD | 8046 W State Hwy 56, Savoy | $1,900 installation, $3,800 improvement fee, $200 deposit per service unit | Non-standard requests handled separately |
| Mustang SUD | 108 Pike Road, Gunter satellite office | Deposit varies by subdivision | Customer installs the service line from district facilities at its own expense |
Among the four utilities that post a full figure, a basic residential connection costs between $4,325 at Starr and $5,950 at Two Way. That gap of $1,625 has nothing to do with the land, and the posted figures do not cover getting a line to the tract. Two Way's posted price explicitly excludes road bores and water line extensions. Luella adds $1,000 if the road has to be bored.
Southwest Fannin's May 2026 policy spells out the condition behind its numbers. Standard residential service is a 5/8-inch meter on an existing pipeline that has capacity. Additional meters, larger meters, or additions to supply, storage or distribution count as non-standard service requests with their own requirements. So the table shows the lowest possible cost of getting water to a tract, not a quote.
Mustang SUD's place on the list reflects a change in the county's water map. A 2023 PUC filing records that the certificate once held by Gunter SUD passed to Marilee SUD and then to Mustang SUD. Mustang posted a revised rate order dated September 5, 2026. On older plats and in family records, the provider name may not match the utility that bills the tract today.
Meter Size and Meter Count Raise the Price Fastest
Acreage buyers often plan for more than a house: a barn with stock tanks, a shop, a guest quarters. Each of those can run into the posted rules.
At Starr WSC, the front-end capital contribution scales with meter size. It is $4,000 for a ¾-inch meter, $6,000 for 1-inch, $20,000 for 1½-inch, and $32,000 for 2-inch service. Moving from the smallest size to the 1½-inch meter multiplies the contribution by five.
Luella SUD posts a different kind of limit. Its new-service page allows one meter per dwelling. Its subdivision notice, issued under the Texas Water Code for CCN No. 10179, applies the district's Subdivision Policy to anyone who divides a tract into two or more lots for sale or development. It also applies to anyone who "requests more than two water service connections on a single contiguous tract of land." Under that policy, the district may require payment for an impact evaluation, fees for supply capacity, fees to reserve capacity, and the cost of any system improvements needed to serve the request. Luella is not required to extend service where the developer has not complied.
On a Luella-served tract, then, a third meter falls under the same written policy as a subdivision. Buyers who plan to split off acreage for family later, or who expect several metered buildings, have a reason to read that policy before the option period ends.
Capacity Is Decided on the Local Line
The Greater Texoma Utility Authority's FY2024 annual report, dated January 2025 and posted on the Grayson County website, said the region it serves had an ample water supply secured from Lake Texoma. The capacity limits that rural buyers run into sit in individual wells, pipes and storage tanks.
Pink Hill WSC's August 24, 2026 notice is the plainest current example. The corporation said "portions of the existing water system have reached their capacity to provide continuous and adequate water service" within its certificated area. Its board has applied for a USDA loan and grant. The planned work includes a 300-GPM water well, a 6-inch waterline along Highway 56, a 200,000-gallon elevated storage tank at the Mitchell Road well, and a 100,000-gallon ground storage tank at the Ward Neal well. The notice does not announce a moratorium or refusals. It does say Pink Hill will reevaluate rates in summer 2027 "to ensure the schedule is met for construction to start." As of that notice, the new capacity is still a funded plan.
Monthly rates have moved as well, and they now vary across these systems:
- Pink Hill WSC: The board voted on July 14, 2026 to set a $40 monthly meter charge, replacing a $30 charge, with usage tiers of $9, $10 and $14 per 1,000 gallons. The notice ties the increase to the September 15 bill. Its rates page gives an effective date of August 27, 2026.
- Starr WSC: At its August 14, 2025 meeting, the board approved a series of increases, citing costs for parts, chemicals and electricity, along with a failing well, a deteriorating pump station and a leaking ground-storage tank. The ¾-inch base rate went from $34 to $36, with tiers from $6.50 to $10.75 per 1,000 gallons.
- Luella SUD: New rates took effect February 1, 2026, with a $30.80 standard base rate and tiers from $4.48 to $8.40 per 1,000 gallons.
Livestock troughs, gardens and arena watering push a country property into the upper tiers. Starr's top tier is $10.75 per 1,000 gallons, Pink Hill's is $14, and Luella's is $8.40. Over years of ownership, the tier schedule can end up costing more than the one-time meter fee.
The Well Option Has Its Own Rules
Some buyers expect to drill a well if the meter is too costly. In Grayson County that goes through the Red River Groundwater Conservation District. New wells require registration and a Notice to Proceed. Non-exempt wells require permits, and new wells producing more than 17.36 gallons per minute need a production permit. All non-exempt wells must be metered. According to the district's homepage, those wells submit monthly meter readings on a quarterly cycle. The district's exempt categories include domestic wells, livestock wells, or wells under 27.7 GPM drilled before April 1, 2012. A well is a separate process with its own permits, fees and drilling costs.
Checking a Tract Before the Contract
Because the notice gives no figures, the useful work happens before an offer is signed:
- Enter the address or CCN number in the PUC's Water and Sewer CCN Viewer to find which provider holds the area.
- Call that utility with the parcel location and ask whether a line with capacity runs along the frontage, and whether a road bore or extension is needed.
- Ask about the meter size and meter count you plan to use, not just a single standard connection.
- Read the provider's subdivision or extension policy if you might ever divide the tract.
- If you are considering a well, review the Red River GCD registration rules.
This is general information, not legal or financial advice. A seller's disclosure obligations or a buyer's contract rights depend on the facts of each deal, so confirm them with a real estate attorney or other qualified professional.
Questions Buyers Ask
Does a tract with an existing house still need the CCN notice? The §13.257 notice requirement does not apply when the property already receives water or sewer service from a utility service provider on the transfer date. The statute lists other exceptions as well, including transfers between spouses and transfers through probate.
Does Two Way SUD serve only Grayson County? No. Its 2025 water quality report says it provides groundwater in Grayson and Cooke counties.
Are any of these utilities refusing new connections right now? None of their current posted notices announces a moratorium. Pink Hill WSC has said parts of its system are at capacity and that improvements depend on federal financing. On any specific parcel, the answer comes from the utility.
The water provider is part of what a buyer gets with a rural tract, along with the survey and the deed. At Bois D'Arc Realty, we check which utility serves a parcel, what its first meter will cost, and whether the line can carry what you plan to build before you commit to Grayson County land. Start Your Country Property Search with a broker who asks about water first.
