The bill amends Section 53.101 of the Property Code to modify the time period during which owners must reserve funds for mechanic's lien claimants under construction contracts. Specifically, it introduces a new Subsection (a-1) that requires owners to reserve the 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. This replaces the previous requirement of reserving funds for 30 days after the completion of the work.

Additionally, the bill clarifies that 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 existing law prior to the amendments.

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