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.

(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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Grapevine Grp. Concrete Contractors, Inc. (Cross-Appellee) v. YC Partners, Ltd. D/B/A Yantis Co. & Yantis Corp. (Cross-Appellant) (2026). · cites it 2×

White v. Salcedo (Bankr. E.D. Tex. 2025). · cites it 2× “18 Defendants dispute these allegations, and argue the funds at issue are not trust funds under the CTFA pursuant to Tex. Prop. Code § 162.001(c).19 Considering the evidence submitted in the light most favorable to the non-movant, Plaintiffs have not carried their summary…”

Trident Homes, Inc. & Ryan Strickland v. Ramesh Kainthla & Neetu Kainthla (Tex. App. 2025). · cites it 2×

Design Tech Homes of Texas, LLC v. John Siemens & Vashti Siemens (As Co-Trs. of the John Siemens & Vashti Siemens Living Revocable Trust) (Tex. App. 2025).

Nooruddin (Bankr. N.D. Tex. 2025).

Dudley Constr., LTD. v. Cross Roads Concrete Servs., INC. (2025).

City Ctr. Wichita Falls, LLC v. Harwell, Jr (Bankr. W.D. Tex. 2024).

Hann v. Kahkeshani (5th Cir. 2023). · cites it 2×

In Re First Fin. Bank N.A. & Candace Emmerich v. the State of Texas (Tex. App. 2023).

Automated Recovery Sys. of New Mexico, Inc. (Bankr. D.N.M. 2023).

Kapitus Servicing, Inc., as servicing agent for Ka v. Keith (Bankr. W.D. Tex. 2023).

Ringer v. Masters Touch Custom Homes LLC (W.D. Tex. 2023).

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).

Dealers Elec. Supply Co. v. Scoggins Constr. Co., 292 S.W.3d 650 (Tex. 2009).

Vast Constr., LLC v. CTC Contractors, LLC, 526 S.W.3d 709 (Tex. App. 2017).

Lively v. Carpet Servs., Inc., 904 S.W.2d 868 (Tex. App. 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).

— 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). “18 Defendants dispute these allegations, and argue the funds at issue are not trust funds under the CTFA pursuant to Tex. Prop. Code § 162.001(c).19 Considering the evidence submitted in the light most favorable to the non-movant, Plaintiffs have not carried their summary…”

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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