buyers of contractor rights become construction trust beneficiaries

The text as introduced · 249 words

89R2055 CS-F

By: Harless
H.B. No. 2226

A BILL TO BE ENTITLED

AN ACT

relating to the beneficiaries of trust funds paid or received in

connection with an improvement on specific real property.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 162.003(a), Property Code, is amended to

read as follows:

(a) A person who is an [ An ] artisan, laborer, mechanic,

contractor, subcontractor, or materialman who labors or who

furnishes labor or material for the construction or repair of an

improvement on specific real property in this state , or the

assignee of that person, is a beneficiary of any trust funds paid or

received in connection with the improvement.

SECTION 2. Subchapter A, Chapter 162, Property Code, is

amended by adding Section 162.0031 to read as follows:

Sec. 162.0031. BENEFICIARY'S ASSIGNMENT OF INTEREST IN

UNPAID TRUST FUNDS. An assignment by a beneficiary of the

beneficiary's interest in unpaid trust funds under this chapter may

not be enforced unless:

(1) the assignment is:

(A) made in writing not earlier than the date the

assignee has paid the beneficiary in good and sufficient funds for

the assignment; and

(B) not made as part of the beneficiary's

construction contract; and

(2) the assignee is a beneficiary, trustee, or

property owner under the contract for the construction or repair of

an improvement on real property in connection with which the

payment of trust funds is made.

SECTION 3. This Act takes effect September 1, 2025.