By: Harris S.B. No. 1641
(In the Senate - Filed March 10, 2009; March 20, 2009, read
first time and referred to Committee on Business and Commerce;
April 23, 2009, reported favorably by the following vote: Yeas 7,
Nays 0; April 23, 2009, sent to printer.)
A BILL TO BE ENTITLED
AN ACT
relating to certain construction liens under the Texas Residential
Construction Commission Act; providing civil penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 420.002, Property Code, is amended to
read as follows:
Sec. 420.002. REQUIRED CONTRACT PROVISIONS. (a) In a
contract for the construction of a new home or an improvement to an
existing home required to be registered under Section 426.003, the
contract is not enforceable against a homeowner unless the
contract:
(1) contains the builder's name and certificate of
registration number; and
(2) contains the notice required by Section 420.001.
(b) A builder may amend a contract that does not comply with
this section to add the required provisions to avoid additional
civil penalties.
(c) When a builder amends a contract under Subsection (b),
the builder and the homeowner may not alter any other term or
condition of the contract.
SECTION 2. Chapter 420, Property Code, is amended by adding
Sections 420.0025 and 420.0026 to read as follows:
Sec. 420.0025. CIVIL PENALTY: FAILURE TO COMPLY WITH
REQUIRED CONTRACT PROVISIONS. (a) A person who violates Section
420.002 is liable for a civil penalty in an amount of not less than
$100 and not more than $500 for each violation, not to exceed an
aggregate amount of $5,000.
(b) Each day a violation of Section 420.002 continues
constitutes a separate violation for the purposes of this section.
(c) The attorney general may bring suit to recover a civil
penalty under this section.
(d) The amount of the civil penalty under this section must
be based on:
(1) the seriousness of the violation, including the
nature, circumstances, extent, and gravity of the violation;
(2) the history of previous violations;
(3) the amount necessary to deter a future violation;
(4) whether the violator demonstrated good faith,
including when applicable whether the violator made good faith
efforts to correct the violation; and
(5) any other matter that justice may require.
Sec. 420.0026. CERTAIN LIENS VALID. Notwithstanding
Section 420.002(a), a builder's failure to comply with Section
420.002 does not invalidate a lien of an entity that:
(1) provided third-party financing to a homeowner for
the construction of a new home or an improvement to an existing home
under a residential construction contract; or
(2) renewed and extended financing for a purpose
described by Subdivision (1).
SECTION 3. This Act takes effect September 1, 2009.
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