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A BILL TO BE ENTITLED
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AN ACT
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relating to certain construction liens under the Texas Residential |
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Construction Commission Act; providing civil penalties. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 420.002, Property Code, is amended to |
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read as follows: |
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Sec. 420.002. REQUIRED CONTRACT PROVISIONS. (a) In a |
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contract for the construction of a new home or an improvement to an |
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existing home required to be registered under Section 426.003, the |
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contract is not enforceable against a homeowner unless the |
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contract: |
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(1) contains the builder's name and certificate of |
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registration number; and |
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(2) contains the notice required by Section 420.001. |
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(b) A builder may amend a contract that does not comply with |
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this section to add the required provisions to avoid additional |
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civil penalties. |
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(c) When a builder amends a contract under Subsection (b), |
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the builder and the homeowner may not alter any other term or |
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condition of the contract. |
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SECTION 2. Chapter 420, Property Code, is amended by adding |
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Sections 420.0025 and 420.0026 to read as follows: |
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Sec. 420.0025. CIVIL PENALTY: FAILURE TO COMPLY WITH |
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REQUIRED CONTRACT PROVISIONS. (a) A person who violates Section |
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420.002 is liable for a civil penalty in an amount of not less than |
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$100 and not more than $500 for each violation, not to exceed an |
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aggregate amount of $5,000. |
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(b) Each day a violation of Section 420.002 continues |
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constitutes a separate violation for the purposes of this section. |
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(c) The attorney general may bring suit to recover a civil |
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penalty under this section. |
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(d) The amount of the civil penalty under this section must |
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be based on: |
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(1) the seriousness of the violation, including the |
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nature, circumstances, extent, and gravity of the violation; |
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(2) the history of previous violations; |
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(3) the amount necessary to deter a future violation; |
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(4) whether the violator demonstrated good faith, |
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including when applicable whether the violator made good faith |
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efforts to correct the violation; and |
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(5) any other matter that justice may require. |
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Sec. 420.0026. CERTAIN LIENS VALID. Notwithstanding |
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Section 420.002(a), a builder's failure to comply with Section |
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420.002 does not invalidate a lien of an entity that: |
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(1) provided third-party financing to a homeowner for |
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the construction of a new home or an improvement to an existing home |
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under a residential construction contract; or |
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(2) renewed and extended financing for a purpose |
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described by Subdivision (1). |
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SECTION 3. This Act takes effect September 1, 2009. |
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