Texas AG Obtains Court Order Forcing Cameron County Developer To Bring Colonia Into Compliance

Tierra Linda Gardens developer must remedy lack of utilities on 26 lots

November 26, 2007 -- AUSTIN – Texas Attorney General Greg Abbott announced that he has obtained a temporary injunction against the developer of Tierra Linda Gardens, a residential subdivision in Cameron County that lacks basic utilities.

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Under the terms of the injunction, Manuel J. Montemayor and his company, MG Joint Venture, have until Dec. 20 to bring the subdivision into compliance with the state’s colonias prevention laws. Montemayor either must cancel each purchase agreement and refund buyers’ deposits and payments or, alternatively, obtain plat approval from local officials and install or bond sewer and water services on the lots already sold.

“The court’s decision requires this border-area developer to comply with state law by providing basic water and wastewater services to residential lot purchasers,” Attorney General Abbott said. “The Office of the Attorney General will continue working with local officials to enforce colonias prevention laws. We are committed to protecting border residents’ health and safety by investigating and prosecuting unlawful housing developments.”

The Office of the Attorney General (OAG) took legal action against Montemayor in October after he unlawfully subdivided a tract into 26 approximately half-acre lots for residential use without obtaining the Cameron County Commissioners Court’s approval. The local officials’ approval is necessary to ensure that electrical, water and wastewater services will be available on property and that the land is not situated in a flood-prone area. Montemayor falsely advertised the lots on a billboard that claimed the lots included “all utilities.”

The OAG’s investigation revealed that Montemayor sold at least two lots for about $15,000 and $17,000 each at 13 percent interest. Montemayor stood to make more than $300,000 had he sold each lot in the subdivision and hundreds of thousands of dollars more in interest.

The case against Montemayor is one of three South Texas colonias cases recently pursued by the OAG. Earlier this month, Attorney General Abbott took legal action against rural housing project developer Aurora Graham, of Mercedes, for failing to obtain plat approval or to install or bond sewer and water services on residential lots she sold in the Gallegos Subdivision, near Los Fresnos.

In 2006, Attorney General Abbott concluded a similar case in Cameron County against Eric Solis, who sold lots in the Toribio Estates subdivision without obtaining plat approval or installing or bonding water and wastewater services.

In Texas, residential subdivisions near the U.S.-Mexico border that lack adequate water or wastewater services are commonly referred to as colonias. Most colonias lie outside city limits or in isolated areas of a county and lack basic infrastructure.

In 1995, the Texas Legislature strengthened colonias prevention laws. The new laws enhanced platting, selling and utilities requirements for residential land sales outside city limits in any county within 50 miles of the Texas-Mexico border. The laws also required that residential subdivision developers either install water and sewer service facilities or provide a financial guarantee to cover the utilities’ cost if the installation is not completed by a promised date. Local officials will not approve the subdivision until that infrastructure is created or the required bond is paid.

Earlier this year Sen. Eddie Lucio, Jr., supported a measure that provides the Office of the Attorney General with additional resources to fight colonia developments.

Before purchasing residential property outside the city limits, border area home buyers should check with county officials to determine whether the property was legally subdivided and whether the developer has made the necessary arrangements to supply water and wastewater infrastructure. Developers that violate Texas platting laws are subject to civil penalties of up to $15,000 per lot.

The Office of the Attorney General’s Colonia Geographic Database stores geographic and descriptive data on more than 1,800 colonias. To access the database, or for more information regarding Attorney General Abbott’s colonias-prevention efforts, visit the “Texas-Mexico Border” page on the Attorney General’s Web site at www.oag.state.tx.us.

Consumers can also file complaints with the Attorney General against developers or sellers who fail to provide water and wastewater services, or who subdivide land without first obtaining necessary county approval. Complaints can be filed on the Attorney General’s Web site or by calling (800) 252-8011.

Source: Texas Attorney General