Tex. Codes » Property Code · TITLE 10. MISCELLANEOUS BENEFICIAL PROPERTY INTERESTS · SUBTITLE B. FIDUCIARIES · CHAPTER 162. CONSTRUCTION PAYMENTS, LOAN RECEIPTS, AND MISAPPLICATION OF TRUST FUNDS
Texas Codes

Tex. Prop. Code § 162.001 (2026)

Construction Payments And Loan Receipts As Trust Funds

✓ current as of May 2026
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Sec. 162.001. CONSTRUCTION PAYMENTS AND LOAN RECEIPTS AS TRUST FUNDS. (a) Construction payments are trust funds under this chapter if the payments are made to a contractor or subcontractor or to an officer, director, or agent of a contractor or subcontractor, under a construction contract for the improvement of specific real property in this state.

(b) Loan receipts are trust funds under this chapter if the funds are borrowed by a contractor, subcontractor, or owner or by an officer, director, or agent of a contractor, subcontractor, or owner for the purpose of improving specific real property in this state, and the loan is secured in whole or in part by a lien on the property.

(c) A fee payable to a contractor is not considered trust funds if:

(1) the contractor and property owner have entered into a written construction contract for the improvement of specific real property in this state before the commencement of construction of the improvement and the contract provides for the payment by the owner of the costs of construction and a reasonable fee specified in the contract payable to the contractor; and

(2) the fee is earned as provided by the contract and paid to the contractor or disbursed from a construction account described by Section 162.006, if applicable.

(d) Trust funds paid to a creditor under this chapter are not property or an interest in property of a debtor who is a trustee described by Section 162.002.

Acts 1983, 68th Leg., p. 3720, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1997, 75th Leg., ch. 1018, Sec. 1, eff. Sept. 1, 1997.

Amended by:

Acts 2009, 81st Leg., R.S., Ch. 1277 (H.B. 1513), Sec. 1, eff. September 1, 2009.

Acts 2009, 81st Leg., R.S., Ch. 1277 (H.B. 1513), Sec. 2, eff. September 1, 2009.

Notes of Decisions
Cited in 117 cases (20 in the last 5 years), 1985–2026 · leading case: Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653 (Tex. 2010).
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Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653 (Tex. 2010). “See Tex. Prop.Code § 162.001(a). The contractor or its officers, agents, or directors who receive or control the funds are trustees thereof.”
Dudley Constr., Ltd., Richard Mark Dudley, & Hartford Fire Ins. Co. v. Act Pipe & Supply, Inc., 545 S.W.3d 532 (Tex. 2018). · cites it 2× “See TEX. PROP. CODE §§ 162.001 -.033; see also In re Kirk , 525 B.”
Dealers Elec. Supply Co. v. Scoggins Constr. Co., 292 S.W.3d 650 (Tex. 2009). · cites it 2× “The supplier missed the McGregor Act deadline to pursue a claim on the bond, and filed this suit against the prime contractor for violation of the Texas Construction Trust Fund Act, Tex. Prop. Code §§ 162.001(a), 162.031(a), and breach of a separate Joint Check Agreement…”
J.P. Morgan Chase Bank, N.A. Ex Rel. Bank One, N.A. v. Texas Contract Carpet, Inc., 302 S.W.3d 515 (Tex. App. 2009). · cites it 2× “The trial court first applied the Act to JP Morgan in its finding of fact tracking the Act’s definition of “trust funds,” stating that “[t]he retainage funds held by [JP Morgan] in the construction loan account were loan receipts of funds borrowed by [Agape] for the purpose of…”
Vast Constr., LLC v. CTC Contractors, LLC, 526 S.W.3d 709 (Tex. App. 2017). “Tex. Prop. Code § 162.001(a); Dealers Elec.”
Ehrhardt v. State, 334 S.W.3d 849 (Tex. App. 2011). · cites it 2× “Tex. Prop.Code Ann. § 162.001 (Vernon Supp.”
Kahkeshani v. Hann (In re Hann), 544 B.R. 326 (Bankr. S.D. Tex. 2016). · cites it 4× “, collectively liable for violating the Texas Construction Trust Fund Act, Tex. Prop.Code section 162.001, et. seq. The arbitrator found Hann and SKH 2000, Inc.”
Taylor Pipeline Constr., Inc. v. Directional Road Boring, Inc., 438 F. Supp. 2d 696 (E.D. Tex. 2006). · cites it 2× “See Tex. Prop. Code Ann. § 162.001 et seq. The Trust Fund Act “imposes fiduciary responsibilities on con *715 tractors to ensure that subcontractors, mechanics and materialmen are paid for work completed.”
Schwertner Backhoe Servs., Inc. v. Kirk (In re Kirk), 525 B.R. 325 (Bankr. W.D. Tex. 2015). · cites it 2× “In April 2012, the Court granted a take-nothing summary judgment in favor of Courtney Kirk, leaving Howard Kirk as the sole Defendant. ECF No.”
RepublicBank Dallas, N.A. v. Interkal, Inc., 691 S.W.2d 605 (Tex. 1985). “See Tex.Prop.Code § 162.001 et seq. The events giving rise to this cause of action occurred when the prior statute was still in effect.”
Choy v. Graziano Roofing of Texas, Inc., 322 S.W.3d 276 (Tex. App. 2009). · cites it 3× “See Tex. Prop.Code Ann. §§ 162.001, 162.002, 162.”
Lively v. Carpet Servs., Inc., 904 S.W.2d 868 (Tex. App. 1995). · cites it 2× “" Tex.Prop.Code Ann. § 162.001(a) (Vernon 1995).”
Show all 117 citing cases →
— Tex. Prop. Code § 162.001(a) — 36 cases
Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653 (Tex. 2010). “See Tex. Prop.Code § 162.001(a). The contractor or its officers, agents, or directors who receive or control the funds are trustees thereof.”
Dealers Elec. Supply Co. v. Scoggins Constr. Co., 292 S.W.3d 650 (Tex. 2009). “The supplier missed the McGregor Act deadline to pursue a claim on the bond, and filed this suit against the prime contractor for violation of the Texas Construction Trust Fund Act, Tex. Prop. Code §§ 162.001(a), 162.031(a), and breach of a separate Joint Check Agreement…”
Vast Constr., LLC v. CTC Contractors, LLC, 526 S.W.3d 709 (Tex. App. 2017). “Tex. Prop. Code § 162.001(a); Dealers Elec.”
Lively v. Carpet Servs., Inc., 904 S.W.2d 868 (Tex. App. 1995). “" Tex.Prop.Code Ann. § 162.001(a) (Vernon 1995).”
Francis v. Coastal Oil & Gas Corp., 130 S.W.3d 76 (Tex. App. 2003).
— Tex. Prop. Code § 162.001(b) — 1 case
Choy v. Graziano Roofing of Texas, Inc., 322 S.W.3d 276 (Tex. App. 2009). “See Tex. Prop.Code Ann. §§ 162.001, 162.002, 162.”
— Tex. Prop. Code § 162.001(c) — 3 cases
Kirschner v. State, 997 S.W.2d 335 (Tex. App. 1999).
White v. Salcedo (Bankr. E.D. Tex. 2025).
Perry & Perry Builders, Inc./Sergio Galvan D/B/A Galvan Plastering Co. v. Sergio Galvan, D/B/A Galvan Plastering Co./Perry & Perry Builders, Inc. Our Lady's Maronite Catholic Church & Ins. Co. of the West (Tex. App. 2003).
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