Buying on Lewisville Lake: What Can Go Wrong

The Three Things the Corps Says to Check Before Closing

The U.S. Army Corps of Engineers publishes specific guidance for buyers of property adjacent to Lewisville Lake. Most buyers and even many agents have never read it. The Corps identifies three items that must be checked before purchasing to determine whether the land is suitable for your intended use:

• 1. Check whether the upper extent of the flowage easement and the Government property line are identified. The survey should show both. If they are not identified, contact the Lewisville Lake Office before closing, not after. These lines determine what you can and cannot do on your property near the water.
• 2. Contact the local city or county Environmental Health Department to determine whether a septic system can be installed if the property is not connected to a municipal sewer system. Many older lakefront properties were built with septic systems that were adequate under original regulations but may not meet current standards for replacement or expansion.
• 3. Verify whether the property contains any structures located on land subject to the flowage easement and whether those structures are authorized. Unauthorized structures on easement land create title problems, potential removal orders, and complications with any future permit applications.

These are not bureaucratic technicalities. They are the three most common sources of expensive surprises on Lewisville Lake closings. The Lewisville Lake Office can address all three items. Their address is 1801 N. Mill St., Lewisville, TX 75057, and they can be contacted before, during, and after your contract period.

The Government Property Line and Flowage Easement

Two different lines define the federal government's interest in the land around Lewisville Lake, and they are not the same line. The Government Property Line marks the edge of land that the federal government owns outright -- land purchased when the reservoir was built in the 1950s. The flowage easement extends beyond the Government Property Line in some areas and grants the Corps the right to flood the land and remove structures if necessary for reservoir operations, even though the landowner holds title to the surface.

Your survey should identify both lines clearly. If it does not, order a new survey that does -- and have it reviewed by a Texas-licensed surveyor and an attorney familiar with federal reservoir easements before closing. Properties where any improvements (including the boathouse, any outbuildings, decks, or fencing) encroach onto the easement area without documented Corps authorization are potentially subject to removal at the Corps's discretion. This is rare in practice, but it is a real risk that affects title insurance and future use of the property.

Boathouse Permit Due Diligence

For properties with existing boathouse structures, the permit due diligence is separate from and in addition to the standard real property due diligence. Before closing on any Lewisville Lake property with a boathouse:

• Contact the Lewisville Lake Office and confirm that the boathouse has a current, active permit. Ask for the permit number and expiration date.
• Ask the Corps whether there are any outstanding violations, compliance issues, or modification approvals pending on that structure.
• Have a qualified marine contractor inspect the structure for condition, safety, and compliance with the permit conditions. The Corps will conduct their own inspection when you apply for a new permit, but you want independent knowledge of the structure's condition before you commit to the purchase.
• Understand what happens if the structure fails the Corps inspection after closing. Because you cannot build a new dock, a failed inspection leaves you with an unusable structure on federal land. Negotiate accordingly -- either require a Corps inspection as a contingency before closing, or price the risk into your offer.

School District and MUD Verification

Lewisville Lake properties span four school districts and numerous Municipal Utility Districts. The school district serving a property is not always the district for the city in which it sits -- boundaries at city edges sometimes assign properties to adjacent districts. Confirm the school district directly with the Denton Central Appraisal District or the relevant appraisal district office, using the specific property's account number. Do not rely on the listing agent's representation or the city name alone.

MUD overlays add to your property tax bill and are not always disclosed prominently in listings. The Texas Property Tax Code requires MUD notices to buyers, but they can get buried in contract disclosure documents. Ask specifically whether the property is within a Municipal Utility District before signing a contract, and get the full MUD rate if so.

HOA and Deed Restriction Review

Many Lewisville Lake communities have deed restrictions even without formal HOAs. These restrictions may limit boat storage, external modifications, fencing height near the water, and other uses that lakefront buyers commonly want. Deed restrictions run with the land and are enforceable by neighbors, not just the HOA. Review the deed restrictions for any Lewisville Lake property you are under contract on before the option period expires.

For communities with active HOAs, request the following documents during your option period: the current HOA budget, the reserve fund balance and reserve study, any pending or recently levied special assessments, and the HOA rules regarding boat storage, dock use, and vacation rentals. An underfunded HOA reserve is a direct financial liability for every homeowner -- the funding gap will eventually be covered by a special assessment, and you want to know about it before you close, not when the letter arrives.

Flood Zone and Insurance Discovery

Run a FEMA flood zone check on the property before the option period expires. If the property is in Zone AE, get flood insurance quotes during the option period -- not after closing. Flood insurance premiums for AE-zone lakefront properties can be significant, and knowing the cost before closing allows you to factor it into your total carrying cost calculation. If the property does not have a current elevation certificate, consider ordering one during the option period -- it costs $400 to $700 and can significantly affect the flood insurance premium you are quoted.

Water and Sewer System Verification

Older lakefront properties on Lewisville Lake -- particularly those built in the 1960s and 1970s on the north shore communities of Shady Shores, Hickory Creek, and Corinth -- may have septic systems rather than municipal sewer connections. Confirm which system serves the property and, if septic, have the system inspected and pumped during the option period. A septic system inspection is separate from the standard home inspection and should be performed by a licensed septic inspector, not the general home inspector. Failed or oversized septic systems on lakefront properties can cost $15,000 to $40,000 to repair or replace.

Title Insurance and Lakefront Exceptions

Standard title insurance commitments on lakefront properties typically include exceptions for Corps of Engineers easements and flowage easements. Read those exceptions carefully. Some title policies specifically exclude coverage for claims arising from the federal easements -- meaning if the Corps exercises its easement rights and requires removal of a structure, your title policy may not cover the loss. Discuss the easement exceptions with your title officer and understand what you are and are not insured against before closing.