| 1 | 1 | | 87R5258 BEE-F |
|---|
| 2 | 2 | | By: Romero, Jr. H.B. No. 1679 |
|---|
| 3 | 3 | | |
|---|
| 4 | 4 | | |
|---|
| 5 | 5 | | A BILL TO BE ENTITLED |
|---|
| 6 | 6 | | AN ACT |
|---|
| 7 | 7 | | relating to the survival of a mechanic's retainage lien after the |
|---|
| 8 | 8 | | foreclosure of a lien securing a construction loan. |
|---|
| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|---|
| 10 | 10 | | SECTION 1. Section 53.052, Property Code, is amended by |
|---|
| 11 | 11 | | amending Subsection (a) and adding Subsection (b-1) to read as |
|---|
| 12 | 12 | | follows: |
|---|
| 13 | 13 | | (a) Except as provided by Subsection (b) or (b-1), the |
|---|
| 14 | 14 | | person claiming the lien must file an affidavit with the county |
|---|
| 15 | 15 | | clerk of the county in which the property is located or into which |
|---|
| 16 | 16 | | the railroad extends not later than the 15th day of the fourth |
|---|
| 17 | 17 | | calendar month after the day on which the indebtedness accrues. |
|---|
| 18 | 18 | | (b-1) If a person claiming a lien for retainage receives a |
|---|
| 19 | 19 | | notice of a foreclosure sale as provided by Section 53.125, the |
|---|
| 20 | 20 | | person must file the affidavit not later than: |
|---|
| 21 | 21 | | (1) the fifth day before the date of the foreclosure |
|---|
| 22 | 22 | | sale; or |
|---|
| 23 | 23 | | (2) if the foreclosure sale does not occur on the date |
|---|
| 24 | 24 | | stated in the notice: |
|---|
| 25 | 25 | | (A) for a lien for retainage under Subchapter E, |
|---|
| 26 | 26 | | the date provided by Section 53.057(f); or |
|---|
| 27 | 27 | | (B) for a lien for retainage described by Section |
|---|
| 28 | 28 | | 53.125(a)(2), the date provided under Subsection (a). |
|---|
| 29 | 29 | | SECTION 2. Subchapter F, Chapter 53, Property Code, is |
|---|
| 30 | 30 | | amended by adding Section 53.125 to read as follows: |
|---|
| 31 | 31 | | Sec. 53.125. SURVIVAL OF RETAINAGE LIEN AFTER CERTAIN |
|---|
| 32 | 32 | | FORECLOSURES. (a) In this section, "retainage" means: |
|---|
| 33 | 33 | | (1) retainage under Subchapter E; or |
|---|
| 34 | 34 | | (2) an amount or agreed percentage of money in a |
|---|
| 35 | 35 | | construction contract or subcontract that is withheld from a |
|---|
| 36 | 36 | | payment and not due to be paid until completion of the contract or |
|---|
| 37 | 37 | | an agreed date. |
|---|
| 38 | 38 | | (b) A person who purchases property that is sold due to the |
|---|
| 39 | 39 | | foreclosure of a lien that secures a financing agreement or loan to |
|---|
| 40 | 40 | | pay for the construction or repair of an improvement to real |
|---|
| 41 | 41 | | property takes the property subject to the amount of retainage |
|---|
| 42 | 42 | | included in an unreleased lien for which an affidavit is filed under |
|---|
| 43 | 43 | | Section 53.052(b-1). |
|---|
| 44 | 44 | | (c) A lender under a financing agreement or loan described |
|---|
| 45 | 45 | | by Subsection (b) shall, not later than the 35th day before the date |
|---|
| 46 | 46 | | of the foreclosure sale, provide written notice to the original |
|---|
| 47 | 47 | | contractor that states: |
|---|
| 48 | 48 | | (1) the lender's intent to foreclose; |
|---|
| 49 | 49 | | (2) the date of the foreclosure sale; |
|---|
| 50 | 50 | | (3) the name of the owner of the property being sold; |
|---|
| 51 | 51 | | (4) a legal description of the property being sold; |
|---|
| 52 | 52 | | and |
|---|
| 53 | 53 | | (5) at the top of the notice, printed in bold capital |
|---|
| 54 | 54 | | letter type at least as large as the largest type used in the |
|---|
| 55 | 55 | | notice, but not smaller than 10-point type: "NOTICE: IN ORDER FOR |
|---|
| 56 | 56 | | THE RETAINAGE PORTION OF A MECHANIC'S LIEN CLAIM TO SURVIVE |
|---|
| 57 | 57 | | FORECLOSURE, YOU MUST FILE A LIEN AFFIDAVIT UNDER SECTION 53.052, |
|---|
| 58 | 58 | | TEXAS PROPERTY CODE, NOT LATER THAN THE FIFTH DAY BEFORE THE DATE OF |
|---|
| 59 | 59 | | THE FORECLOSURE SALE." |
|---|
| 60 | 60 | | (d) An original contractor who receives a notice under this |
|---|
| 61 | 61 | | section must, not later than the fifth day after the date the |
|---|
| 62 | 62 | | contractor receives the notice, provide a copy of the notice to each |
|---|
| 63 | 63 | | subcontractor of the contractor. |
|---|
| 64 | 64 | | (e) A subcontractor who receives a notice under Subsection |
|---|
| 65 | 65 | | (d) must, not later than the fifth day after the date the |
|---|
| 66 | 66 | | subcontractor receives the notice, provide a copy of the notice to |
|---|
| 67 | 67 | | each subcontractor of the subcontractor. |
|---|
| 68 | 68 | | SECTION 3. The changes in law made by this Act apply only to |
|---|
| 69 | 69 | | a lien related to an original contract entered into on or after the |
|---|
| 70 | 70 | | effective date of this Act. A lien related to an original contract |
|---|
| 71 | 71 | | entered into before the effective date of this Act is governed by |
|---|
| 72 | 72 | | the law applicable to the lien immediately before the effective |
|---|
| 73 | 73 | | date of this Act, and that law is continued in effect for that |
|---|
| 74 | 74 | | purpose. |
|---|
| 75 | 75 | | SECTION 4. This Act takes effect September 1, 2021. |
|---|