| 1 | 1 | | By: Harris S.B. No. 1641 |
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| 2 | 2 | | |
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| 3 | 3 | | |
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| 4 | 4 | | A BILL TO BE ENTITLED |
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| 5 | 5 | | AN ACT |
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| 6 | 6 | | relating to certain construction liens under the Texas Residential |
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| 7 | 7 | | Construction Commission Act; providing civil penalties. |
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| 8 | 8 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 9 | 9 | | SECTION 1. Section 420.002, Property Code, is amended to |
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| 10 | 10 | | read as follows: |
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| 11 | 11 | | Sec. 420.002. REQUIRED CONTRACT PROVISIONS. (a) In a |
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| 12 | 12 | | contract for the construction of a new home or an improvement to an |
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| 13 | 13 | | existing home required to be registered under Section 426.003, the |
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| 14 | 14 | | contract is not enforceable against a homeowner unless the |
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| 15 | 15 | | contract: |
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| 16 | 16 | | (1) contains the builder's name and certificate of |
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| 17 | 17 | | registration number; and |
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| 18 | 18 | | (2) contains the notice required by Section 420.001. |
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| 19 | 19 | | (b) A builder may amend a contract that does not comply with |
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| 20 | 20 | | this section to add the required provisions to avoid additional |
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| 21 | 21 | | civil penalties. |
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| 22 | 22 | | (c) When a builder amends a contract under Subsection (b), |
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| 23 | 23 | | the builder and the homeowner may not alter any other term or |
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| 24 | 24 | | condition of the contract. |
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| 25 | 25 | | SECTION 2. Chapter 420, Property Code, is amended by adding |
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| 26 | 26 | | Sections 420.0025 and 420.0026 to read as follows: |
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| 27 | 27 | | Sec. 420.0025. CIVIL PENALTY: FAILURE TO COMPLY WITH |
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| 28 | 28 | | REQUIRED CONTRACT PROVISIONS. (a) A person who violates Section |
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| 29 | 29 | | 420.002 is liable for a civil penalty in an amount of not less than |
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| 30 | 30 | | $100 and not more than $500 for each violation, not to exceed an |
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| 31 | 31 | | aggregate amount of $5,000. |
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| 32 | 32 | | (b) Each day a violation of Section 420.002 continues |
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| 33 | 33 | | constitutes a separate violation for the purposes of this section. |
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| 34 | 34 | | (c) The attorney general may bring suit to recover a civil |
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| 35 | 35 | | penalty under this section. |
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| 36 | 36 | | (d) The amount of the civil penalty under this section must |
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| 37 | 37 | | be based on: |
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| 38 | 38 | | (1) the seriousness of the violation, including the |
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| 39 | 39 | | nature, circumstances, extent, and gravity of the violation; |
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| 40 | 40 | | (2) the history of previous violations; |
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| 41 | 41 | | (3) the amount necessary to deter a future violation; |
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| 42 | 42 | | (4) whether the violator demonstrated good faith, |
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| 43 | 43 | | including when applicable whether the violator made good faith |
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| 44 | 44 | | efforts to correct the violation; and |
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| 45 | 45 | | (5) any other matter that justice may require. |
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| 46 | 46 | | Sec. 420.0026. CERTAIN LIENS VALID. Notwithstanding |
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| 47 | 47 | | Section 420.002(a), a builder's failure to comply with Section |
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| 48 | 48 | | 420.002 does not invalidate a lien of an entity that: |
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| 49 | 49 | | (1) provided third-party financing to a homeowner for |
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| 50 | 50 | | the construction of a new home or an improvement to an existing home |
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| 51 | 51 | | under a residential construction contract; or |
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| 52 | 52 | | (2) renewed and extended financing for a purpose |
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| 53 | 53 | | described by Subdivision (1). |
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| 54 | 54 | | SECTION 3. This Act takes effect September 1, 2009. |
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