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Texas Laws | Property Code
PROPERTY CODE
TITLE 4. ACTIONS AND REMEDIES

(c) A subcontractor who receives a payment under Subsection (b) or otherwise from a contractor in connection with a contract to improve real property shall pay each of its subcontractors the portion of the payment, including interest, if any, that is attributable to work properly performed or materials suitably stored or specially fabricated as provided under the contract by that subcontractor, to the extent of that subcontractor's interest in the payment. The payment required by this subsection must be made not later than the seventh day after the date the subcontractor receives the contractor's payment. (2376)

Added by Acts 1993, 73rd Leg., ch. 479, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. 805, Sec. 1, eff. Sept. 1, 1999. (2377)

Sec. 28.003. EXCEPTION FOR GOOD FAITH DISPUTE; WITHHOLDING. (2378)(Text)

(a) If a good faith dispute exists concerning the amount owed for a payment requested or required by this chapter under a contract for construction of or improvements to a detached single-family residence, duplex, triplex, or quadruplex, the owner, contractor, or subcontractor that is disputing its obligation to pay or the amount of payment may withhold from the payment owed not more than 110 percent of the difference between the amount the obligee claims is due and the amount the obligor claims is due. A good faith dispute includes a dispute regarding whether the work was performed in a proper manner. (2379)

(b) If a good faith dispute exists concerning the amount owed for a payment requested or required by this chapter under a contract for construction of or improvements to real property, excluding a detached single-family residence, duplex, triplex, or quadruplex, the owner, contractor, or subcontractor that is disputing its obligation to pay or the amount of payment may withhold from the payment owed not more than 100 percent of the difference between the amount the obligee claims is due and the amount the obligor claims is due. A good faith dispute includes a dispute regarding whether the work was performed in a proper manner. (2380)

Added by Acts 1993, 73rd Leg., ch. 479, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. 805, Sec. 2, eff. Sept. 1, 1999. (2381)

Sec. 28.004. INTEREST ON OVERDUE PAYMENT. (2382)(Text)

(a) An unpaid amount required under this chapter begins to accrue interest on the day after the date on which the payment becomes due. (2383)

(b) An unpaid amount bears interest at the rate of 1-1/2 percent each month. (2384)

(c) Interest on an unpaid amount stops accruing under this section on the earlier of: (2385)

(1) the date of delivery; (2386)

(2) the date of mailing, if payment is mailed and delivery occurs within three days; or (2387)

(3) the date a judgment is entered in an action brought under this chapter. (2388)

Added by Acts 1993, 73rd Leg., ch. 479, Sec. 1, eff. Sept. 1, 1993. (2389)

Sec. 28.005. ACTION TO ENFORCE PAYMENT. (2390)(Text)

(a) A person may bring an action to enforce the person's rights under this chapter. (2391)

(b) In an action brought under this chapter, the court may award costs and reasonable attorney's fees as the court determines equitable and just. (2392)

Added by Acts 1993, 73rd Leg., ch. 479, Sec. 1, eff. Sept. 1, 1993. (2393)

Sec. 28.006. NO WAIVER. (2394)(Text)

(a) Except as provided by Subsection (b), an attempted waiver of a provision of this chapter is void. (2395)

(b) A written contract between an owner and a contractor for improvements to or construction of a single-family residence may provide that the payment required under Section 28.002(a) be made not later than a date that occurs before the 61st day after the date the owner receives the payment request. Notwithstanding Section 28.004(b), an unpaid amount under contract subject to this subsection that allows payment later than the date otherwise required under Section 28.002(a) bears interest at the rate of 1-1/2 percent each month. (2396)

Added by Acts 1993, 73rd Leg., ch. 479, Sec. 1, eff. Sept. 1, 1993. (2397)

Sec. 28.007. LEGAL CONSTRUCTION. (2398)(Text)

(a) This chapter may not be interpreted to void a contractor's or subcontractor's entitlement to payment for properly performed work or suitably stored materials. (2399)

(b) Nothing in this statute shall be interpreted to change the rights and obligations set forth in Chapter 53, Property Code. (2400)

Added by Acts 1993, 73rd Leg., ch. 479, Sec. 1, eff. Sept. 1, 1993. (2401)

Sec. 28.008. EXCEPTION FOR FAILURE OF LENDER TO DISBURSE FUNDS. (2402)(Text)

The date of payment required of the owner pursuant to Section 28.002(a) shall change from the 35th day after the date the owner receives the payment request to the fifth day after the date the owner receives loan proceeds, in the event that: (2403)

(1) the owner has obtained a loan intended to pay for all or part of a contract to improve real property; (2404)

(2) the owner has timely and properly requested disbursement of proceeds from that loan; and (2405)

(3) the lender is legally obligated to disburse such proceeds to the owner, but has failed to do so within 35 days after the date the owner received the contractor's payment request. (2406)

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