Enrolled Bill Summary

            House Bill 740 adds a new subchapter to the Property Code governing certain liens arising from residential construction projects. The act requires a contractor on a residential construction project to furnish a disclosure statement to the owner before work begins that contains a general summary of the homeowner's right and responsibilities regarding a residential construction contract. On a contract for residential improvements, contractors must also provide the homeowner with a list of subcontractors and suppliers the contractor intends to use and a disbursement statement listing payments made or to be made. On a residential construction contract, a contractor must furnish to the owner, or a seller must furnish to the buyer, a final bills-paid affidavit as a condition of final payment or sale. Third-party lenders that provide financing for improvements must also provide disbursement statements and deliver the disclosure statement and loan documentation to the owner before closing, with certain exceptions. The act establishes penalties for providing false information in a disbursement statement or final bills-paid affidavit. The act prohibits a contractor from requiring an owner to convey real property to the contractor as a condition of a residential construction contract for improvements.

            The act also amends several Property Code provisions relating to the claiming of mechanics', contractors', and materialmen's liens and to the discharge of such liens, and it establishes a procedure that enables an owner in litigation to remove an invalid or unenforceable lien.