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

Additionally, the bill introduces a new requirement that owners must pay 50 percent of the reserved funds no later than the day described in the new time frame. The changes apply only to contracts entered into on or after the effective date of the Act, which is set for September 1, 2025, ensuring that contracts established before this date will continue to be governed by the existing law.

Statutes affected:
Introduced: Property Code 53.101 (Property Code 53)
House Committee Report: Property Code 53.101 (Property Code 53)