Texas Senate Bill SB2073

Texas 2017 - 85th Regular

Caption

Relating to a mechanic's or materialman's lien for retained funds under certain construction contracts.

Impact

The bill changes how retained funds are treated under Texas property law, particularly in construction contracts. By ensuring that a lien for retained funds has equal priority with other secured claims, the bill aims to protect contractors effectively when payment for their services is withheld. This adjustment seeks to balance the power dynamics between homeowners, contractors, and financial institutions by clarifying the rights of contractors when it comes to claiming funds that have not been paid.

Summary

SB2073, relating to a mechanic's or materialman's lien for retained funds under certain construction contracts, introduces significant amendments to Chapter 53 of the Property Code. This bill specifically addresses the procedures and rights associated with claims for retained funds that contractors may not receive due to withheld payments. It establishes guidelines regarding the priority of liens for retained funds, ensuring that these claims hold equal weight to other liens associated with financing agreements on the property, unless otherwise specified by law.

Contention

Notable points of contention surrounding SB2073 include concerns from stakeholders about the implications of prioritized liens on the availability of funding for homeowners. Critics argue that prioritizing such claims could complicate financing for projects, potentially reducing incentives for financial institutions to underwrite loans for home improvements. Additionally, while the bill aims to protect contractors, some view the legislation as potentially overwhelming and confusing, fearing that it lacks provisions for educational outreach to affected parties regarding their rights and obligations under the new law.