The bill amends Section 53.101 of the Property Code to modify the time period during which funds must be reserved for the benefit of mechanic's lien claimants under construction contracts. Specifically, it replaces the previous requirement of reserving funds for "30 days after the work under the contract is completed" with a new provision that mandates the owner to reserve these funds for a period ending on the earlier of the 31st day after the completion of the work or the 61st day after either a certificate of occupancy is issued or the improvement is first used for its intended purpose.

Additionally, the bill introduces a new Subsection (a-1) that outlines these updated timeframes for fund reservation. The changes will only apply to contracts entered into on or after the effective date of the Act, which is set for September 1, 2025. Contracts established before this date will continue to be governed by the previous law.

Statutes affected:
Introduced: Property Code 53.101 (Property Code 53)