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We have 3.5 acre (1.4 ha) land on our primary residence in Travis county area in central Texas. My neighbor has expressed interest in buying an acre (0.4 ha) from us that is backing out to them.

We think this is a fair ask as we are not using that part of land and we have good relationship with the neighbor.

Can this be done without a subdivision process? i.e. Without city or county permissions as I know there is a 2 acre (0.8 ha) lot size limit for properties with well water, which we have.

They are planning to get a surveyor and redraw the plot to show us exactly what will be theirs and what we will be left with. We will also ensure deed is drawn via title. We are also planning to talk to our mortgage lender about this plan.

Is there anything else we should look into? Is there anything in the process I may have overlooked?

Appreciate the collective guidance!

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    These are strictly speaking legal questions. You should seek legal advice on this from a lawyer familiar with the laws and ordinances of your area. I'd strongly suggest making a formal inquiry to your local county planning office. It can be surprising how complicated these rules can be.
    – StephenG - Help Ukraine
    Mar 30 at 9:48

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You might consider leasing it to them.

It depends what they want it for. If they want to build on it, or need a larger lot to satisfy some city ordinances, leasing won't work. But if they want it to expand their backyard, or raise alpacas on it, or grow crops, then they only need to lease it from you. You would need to check with your municipal government and/or a lawyer, but you should be able to do that without subdividing the lot. Leases can be for a very long time if you need - ten years, or even a hundred if you like. A lease would also preclude the need for a loan - they can pay every year for the use of the land.

The downside would be the limits on what can be done on the leased land, and a certain amount of complication when one of you sells.

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Can this be done without a subdivision process? i.e. Without city or county permissions as I know there is a 2 acr lot size limit for properties with well water, which we have.

If they are getting a loan, then expect that their lender will want all the paperwork complete. That means all the paperwork filed with the local government. The lender doesn't want to discover a year later that the new owner doesn't really have the title to the land.

That means the local government will make sure that the new pair of properties meet all the zoning requirements. That would include lot size. It could be done with the right paperwork, or it could require a public hearing. Check with the local government for the required steps.

If they aren't getting a loan, then they should still ask for a subdivision to protect their investment. It will also protect you both when one of you decides to sell their part to somebody else.

We are also planning to talk to our mortgage lender about this plan.

Your lender will care. They gave you a loan based on the land and any structures. Changing that will alter the value of the property. They may reject it, or they could require a new appraisal before making a decision.

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Your best course of action is to contact a lawyer in your county that is familiar with and experienced in real estate law. They can advise with what is possible, and assist with the necessary requirements, drawing up necessary legal paperwork, and offer guidance. Lawyers aren't cheap, but their experience is worth the cost to make sure it's done right. You and your neighbor can probably even split the bill, since you both appear to want the same goal without conflict so there shouldn't be a need for each of you to have your own lawyer.

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    This is a common-enough thing to do that any experienced lawyer likely has fill-in-the-blank templates for all the paperwork and could knock it out fairly quickly once the survey is complete. They might charge a lot per hour, but it shouldn't take them very long at all. Some might even do it for a flat rate.
    – bta
    Mar 29 at 18:27
  • And of course, after all is said and done, come back to Law.SE and upload a detailed list of steps/forms so that future readers can benefit!
    – JonathanReez
    Mar 30 at 15:40

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