The bill amends the Property Code to clarify the status of trust funds related to construction contracts. Specifically, it introduces a new subsection (a-1) to Section 162.001, stating that funds reserved for the construction or repair of single-family homes, duplexes, triplexes, or quadruplexes for residential purposes are not considered trust funds under this chapter. Additionally, it modifies Section 162.003(a) to specify that beneficiaries of trust funds include those who provide labor or materials for improvements, with a distinction made for funds reserved under Section 53.101.

Furthermore, the bill adds Section 162.034, which mandates that courts award reasonable attorney's fees and costs to beneficiaries who prevail in actions against trustees under this chapter. The changes apply only to construction contracts entered into on or after the effective date of the Act, which is set for September 1, 2025.

Statutes affected:
Introduced: Property Code 162.001, Property Code 162.003 (Property Code 162)