Tex. Prop. Code Section 53.255
Disclosure Statement Required for Residential Construction Contract

(a)

Before a residential construction contract is executed by the owner, the original contractor shall deliver to the owner a disclosure statement described by this section.

(b)

The disclosure statement must read substantially similar to the following:
"KNOW YOUR RIGHTS AND RESPONSIBILITIES UNDER THE LAW. You are about to enter into a transaction to build a new home or remodel existing residential property. Texas law requires your contractor to provide you with this brief overview of some of your rights, responsibilities, and risks in this transaction.
"CONVEYANCE TO CONTRACTOR NOT REQUIRED. Your contractor may not require you to convey your real property to your contractor as a condition to the agreement for the construction of improvements on your property.
"KNOW YOUR CONTRACTOR. Before you enter into your agreement for the construction of improvements to your real property, make sure that you have investigated your contractor. Obtain and verify references from other people who have used the contractor for the type and size of construction project on your property.
"GET IT IN WRITING. Make sure that you have a written agreement with your contractor that includes: (1) a description of the work the contractor is to perform; (2) the required or estimated time for completion of the work; (3) the cost of the work or how the cost will be determined; and (4) the procedure and method of payment, including provisions for statutory reservation of funds and conditions for final payment. If your contractor made a promise, warranty, or representation to you concerning the work the contractor is to perform, make sure that promise, warranty, or representation is specified in the written agreement. An oral promise that is not included in the written agreement may not be enforceable under Texas law.
"READ BEFORE YOU SIGN. Do not sign any document before you have read and understood it. NEVER SIGN A DOCUMENT THAT INCLUDES AN UNTRUE STATEMENT. Take your time in reviewing documents. If you borrow money from a lender to pay for the improvements, you are entitled to have the loan closing documents furnished to you for review at least one business day before the closing. Do not waive this requirement unless a bona fide emergency or another good cause exists, and make sure you understand the documents before you sign them. If you fail to comply with the terms of the documents, you could lose your property. You are entitled to have your own attorney review any documents. If you have any question about the meaning of a document, consult an attorney.
"GET A LIST OF SUBCONTRACTORS AND SUPPLIERS. Before construction commences, your contractor is required to provide you with a list of the subcontractors and suppliers the contractor intends to use on your project. Your contractor is required to supply updated information on any subcontractors and suppliers added after the list is provided. Your contractor is not required to supply this information if you sign a written waiver of your rights to receive this information.
"MONITOR THE WORK. Lenders and governmental authorities may inspect the work in progress from time to time for their own purposes. These inspections are not intended as quality control inspections. Quality control is a matter for you and your contractor. To ensure that your home is being constructed in accordance with your wishes and specifications, you should inspect the work yourself or have your own independent inspector review the work in progress.
"MONITOR PAYMENTS. If you use a lender, your lender is required to provide you with a periodic statement showing the money disbursed by the lender from the proceeds of your loan. Each time your contractor requests payment from you or your lender for work performed, your contractor is also required to furnish you with a disbursement statement that lists the name and address of each subcontractor or supplier that the contractor intends to pay from the requested funds. Review these statements and make sure that the money is being properly disbursed.
"CLAIMS BY SUBCONTRACTORS AND SUPPLIERS. Under Texas law, if a subcontractor or supplier who furnishes labor or materials for the construction of improvements on your property is not paid, you may become liable and your property may be subject to a lien for the unpaid amount, even if you have not contracted directly with the subcontractor or supplier. To avoid liability, you should take the following actions:

(1)

If you receive a written notice from a subcontractor or supplier, you should withhold payment from your contractor for the amount of the claim stated in the notice until the dispute between your contractor and the subcontractor or supplier is resolved. If your lender is disbursing money directly to your contractor, you should immediately provide a copy of the notice to your lender and instruct the lender to withhold payment in the amount of the claim stated in the notice. If you continue to pay the contractor after receiving the written notice without withholding the amount of the claim, you may be liable and your property may be subject to a lien for the amount you failed to withhold.

(2)

During construction and for 30 days after final completion, termination, or abandonment of the contract by the contractor, you should reserve or cause your lender to reserve 10 percent of the amount of payments made for the work performed by your contractor. If you choose not to reserve the 10 percent for at least 30 days after final completion, termination, or abandonment of the contract by the contractor and if a valid claim is timely made by a claimant and your contractor fails to pay the claim, you may be personally liable and your property may be subject to a lien up to the amount that you failed to reserve.
"If a claim is not paid within a certain time period, the claimant is required to file a mechanic’s lien affidavit in the real property records in the county where the property is located. A mechanic’s lien affidavit is not a lien on your property, but the filing of the affidavit could result in a court imposing a lien on your property if the claimant is successful in litigation to enforce the lien claim.
"SOME CLAIMS MAY NOT BE VALID. When you receive a written notice of a claim or when a mechanic’s lien affidavit is filed on your property, you should know your legal rights and responsibilities regarding the claim. Not all claims are valid. A notice of a claim by a subcontractor or supplier is required to be sent, and the mechanic’s lien affidavit is required to be filed, within strict time periods. The notice and the affidavit must contain certain information. All claimants may not fully comply with the legal requirements to collect on a claim. If you have paid the contractor in full before receiving a notice of a claim and have withheld the 10 percent of the contract price or value of work, you may not be liable for that claim. Accordingly, you should consult your attorney when you receive a written notice of a claim to determine the true extent of your liability or potential liability for that claim.
"OBTAIN A LIEN RELEASE AND A BILLS-PAID AFFIDAVIT. When you receive a notice of claim, do not release withheld funds without obtaining a signed and notarized release of lien and claim from the claimant. You can also reduce the risk of having a claim filed by a subcontractor or supplier by requiring as a condition of each payment made by you or your lender that your contractor furnish you with an affidavit stating that all bills have been paid. Under Texas law, on final completion of the work and before final payment, the contractor is required to furnish you with an affidavit stating that all bills have been paid. If the contractor discloses any unpaid bill in the affidavit, you should withhold payment in the amount of the unpaid bill until you receive a waiver of lien or release from that subcontractor or supplier.
“OBTAIN TITLE INSURANCE PROTECTION. You may be able to obtain a title insurance policy to insure that the title to your property and the existing improvements on your property are free from liens claimed by subcontractors and suppliers. If your policy is issued before the improvements are completed and covers the value of the improvements to be completed, you should obtain, on the completion of the improvements and as a condition of your final payment, a ’completion of improvements’ policy endorsement. This endorsement will protect your property from liens claimed by subcontractors and suppliers that may arise from the date the original title policy is issued to the date of the endorsement.”

(c)

The failure of a contractor to comply with this section does not invalidate a lien under this chapter, a contract lien, or a deed of trust.
Added by Acts 1997, 75th Leg., ch. 526, Sec. 23, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 889, Sec. 8, eff. Sept. 1, 1999.
Amended by:
Acts 2021, 87th Leg., R.S., Ch. 690 (H.B. 2237), Sec. 34, eff. January 1, 2022.

Source: Section 53.255 — Disclosure Statement Required for Residential Construction Contract, https://statutes.­capitol.­texas.­gov/Docs/PR/htm/PR.­53.­htm#53.­255 (accessed Jun. 5, 2024).

53.001
Definitions 53.002
More than One Original Contractor 53.003
Notices 53.021
Persons Entitled to Lien 53.022
Property to Which Lien Extends 53.023
Payment Secured by Lien 53.024
Limitation on Subcontractor’s Lien 53.025
Limitation on Ordinary Retainage Lien 53.026
Sham Contract 53.051
Necessary Procedures 53.052
Filing of Affidavit 53.054
Contents of Affidavit 53.055
Notice of Filed Affidavit 53.056
Derivative Claimant: Notice to Owner and Original Contractor 53.057
Derivative Claimant: Notice of Claim for Unpaid Retainage 53.081
Authority to Withhold Funds for Benefit of Claimants 53.082
Time for Which Funds Are Withheld 53.084
Owner’s Liability 53.085
Affidavit Required 53.101
Funds Required to Be Reserved 53.102
Payment Secured by Reserved Funds 53.103
Lien on Reserved Funds 53.104
Preferences 53.105
Owner’s Liability for Failure to Reserve Funds 53.106
Affidavit of Completion 53.107
Notice Relating to Termination of Work or Abandonment of Performance by Original Contractor or Owner 53.121
Preference over Other Creditors 53.122
Equality of Mechanic’s Liens 53.123
Priority of Mechanic’s Lien over Other Liens 53.124
Inception of Mechanic’s Lien 53.151
Enforcement of Remedies Against Money Due Original Contractor or Subcontractor 53.152
Release of Claim or Lien 53.153
Defense of Actions 53.154
Foreclosure 53.155
Transfer of Property Sold 53.156
Costs and Attorney’s Fees 53.157
Discharge of Lien 53.158
Period for Bringing Suit to Foreclose Lien 53.159
Obligation to Furnish Information 53.160
Summary Motion to Remove Invalid or Unenforceable Lien 53.161
Bond Requirements After Order to Remove 53.162
Revival of Removed Lien 53.171
Bond 53.172
Bond Requirements 53.173
Notice of Bond 53.174
Recording of Bond and Notice 53.175
Action on Bond 53.201
Bond 53.202
Bond Requirements 53.203
Recording of Bond and Contract 53.204
Reliance on Record 53.205
Enforceable Claims 53.206
Perfection of Claim 53.207
Owner’s Notice of Claim to Surety 53.208
Action on Bond 53.210
Claims in Excess of Bond Amount 53.211
Attempted Compliance 53.231
Lien 53.232
To Whom Notice Given 53.233
Contents of Notice 53.234
Time for Notice 53.235
Official to Retain Funds 53.236
Bond for Release of Lien 53.237
Bond Requirements 53.238
Notice of Bond 53.239
Action on Bond 53.251
Procedures for Residential Construction Projects 53.254
Contractual Requirements for Lien on Homestead 53.255
Disclosure Statement Required for Residential Construction Contract 53.256
List of Subcontractors and Suppliers 53.257
Provisions Related to Closing of Loan for Construction of Improvements 53.258
Disbursements of Funds 53.259
Final Bills-paid Affidavit Required 53.260
Conveyance to Contractor Not Required 53.281
Waiver and Release of Lien or Payment Bond Claim 53.282
Conditions for Waiver, Release, or Impairment of Lien or Payment Bond Claim 53.283
Unconditional Waiver and Release: Payment Required 53.284
Forms for Waiver and Release of Lien or Payment Bond Claim 53.286
Public Policy 53.287
Certain Agreements Exempt
Green check means up to date. Up to date

Accessed:
Jun. 5, 2024

§ 53.255’s source at texas​.gov