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A BILL TO BE ENTITLED
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AN ACT
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relating to the survival of a mechanic's retainage lien after the |
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foreclosure of a lien securing a construction loan. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 53.052, Property Code, is amended by |
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amending Subsection (a) and adding Subsection (b-1) to read as |
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follows: |
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(a) Except as provided by Subsection (b) or (b-1), the |
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person claiming the lien must file an affidavit with the county |
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clerk of the county in which the property is located or into which |
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the railroad extends not later than the 15th day of the fourth |
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calendar month after the day on which the indebtedness accrues. |
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(b-1) If a person claiming a lien for retainage receives a |
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notice of a foreclosure sale as provided by Section 53.125, the |
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person must file the affidavit not later than: |
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(1) the fifth day before the date of the foreclosure |
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sale; or |
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(2) if the foreclosure sale does not occur on the date |
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stated in the notice: |
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(A) for a lien for retainage under Subchapter E, |
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the date provided by Section 53.057(f); or |
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(B) for a lien for retainage described by Section |
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53.125(a)(2), the date provided under Subsection (a). |
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SECTION 2. Subchapter F, Chapter 53, Property Code, is |
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amended by adding Section 53.125 to read as follows: |
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Sec. 53.125. SURVIVAL OF RETAINAGE LIEN AFTER CERTAIN |
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FORECLOSURES. (a) In this section, "retainage" means: |
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(1) retainage under Subchapter E; or |
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(2) an amount or agreed percentage of money in a |
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construction contract or subcontract that is withheld from a |
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payment and not due to be paid until completion of the contract or |
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an agreed date. |
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(b) A person who purchases property that is sold due to the |
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foreclosure of a lien that secures a financing agreement or loan to |
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pay for the construction or repair of an improvement to real |
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property takes the property subject to the amount of retainage |
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included in an unreleased lien for which an affidavit is filed under |
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Section 53.052(b-1). |
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(c) A lender under a financing agreement or loan described |
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by Subsection (b) shall, not later than the 35th day before the date |
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of the foreclosure sale, provide written notice to the original |
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contractor that states: |
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(1) the lender's intent to foreclose; |
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(2) the date of the foreclosure sale; |
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(3) the name of the owner of the property being sold; |
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(4) a legal description of the property being sold; |
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and |
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(5) at the top of the notice, printed in bold capital |
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letter type at least as large as the largest type used in the |
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notice, but not smaller than 10-point type: "NOTICE: IN ORDER FOR |
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THE RETAINAGE PORTION OF A MECHANIC'S LIEN CLAIM TO SURVIVE |
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FORECLOSURE, YOU MUST FILE A LIEN AFFIDAVIT UNDER SECTION 53.052, |
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TEXAS PROPERTY CODE, NOT LATER THAN THE FIFTH DAY BEFORE THE DATE OF |
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THE FORECLOSURE SALE." |
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(d) An original contractor who receives a notice under this |
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section must, not later than the fifth day after the date the |
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contractor receives the notice, provide a copy of the notice to each |
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subcontractor of the contractor. |
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(e) A subcontractor who receives a notice under Subsection |
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(d) must, not later than the fifth day after the date the |
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subcontractor receives the notice, provide a copy of the notice to |
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each subcontractor of the subcontractor. |
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SECTION 3. The changes in law made by this Act apply only to |
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a lien related to an original contract entered into on or after the |
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effective date of this Act. A lien related to an original contract |
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entered into before the effective date of this Act is governed by |
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the law applicable to the lien immediately before the effective |
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date of this Act, and that law is continued in effect for that |
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purpose. |
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SECTION 4. This Act takes effect September 1, 2021. |