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 § 162.032 (2026)

Penalties

✓ current as of May 2026
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Sec. 162.032. PENALTIES. (a) A trustee who misapplies trust funds amounting to $500 or more in violation of this chapter commits a Class A misdemeanor.

(b) A trustee who misapplies trust funds amounting to $500 or more in violation of this chapter, with intent to defraud, commits a felony of the third degree.

(c) A trustee who fails to establish or maintain a construction account in violation of Section 162.006 or fails to establish or maintain an account record for the construction account in violation of Section 162.007 commits a Class A misdemeanor.

Acts 1983, 68th Leg., p. 3722, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1987, 70th Leg., ch. 578, Sec. 5, eff. Aug. 31, 1987; Acts 1997, 75th Leg., ch. 1018, Sec. 5, eff. Sept. 1, 1997.

Notes of Decisions
Cited in 6 cases (2 in the last 5 years), 1998–2025 · leading case: Kahkeshani v. Hann (In re Hann), 544 B.R. 326 (Bankr. S.D. Tex. 2016).
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Kahkeshani v. Hann (In re Hann), 544 B.R. 326 (Bankr. S.D. Tex. 2016). · cites it 5× “3 See Tex. Prop.Code Ann. § 162.031; Tex. Prop.”
Baker v. State, 986 S.W.2d 271 (Tex. App. 1998). “1999), and could have been prosecuted under Tex. Prop.Code Ann. § 162.031 (Vernon 1995), as a trustee who improperly misused trust funds.”
Lampman v. Lee (In re Lee), 230 B.R. 810 (Bankr. N.D. Tex. 1999). “Tex. Prop. Code Ann. § 162.032 (Vernon 1995) states: (a) A trustee who misapplies trust funds amounting to $500 or more in violation of this chapter commits a Class A misdemeanor.”
Mark Young v. Bella Palma, LLC (Tex. App. 2022). “” Tex. Prop. Code Ann. § 162.032 . “[D]espite the absence of an express provision for a private right of action, a 18 breach of a statutory duty normally gives rise to a private right of action on behalf of the injured person (or group of persons) for whose benefit the statute…”
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). “1994))); see also Tex. Prop. Code § 162.032(b) (stating that trustee who misapplies trust funds with intent to defraud commits third-degree felony).”
Paul Thomas Hughes v. State (Tex. App. 2013). “See Tex. Prop. Code Ann. § 162.032 ; see also Kirschner v.”
— Tex. Prop. Code § 162.032(b) — 1 case
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). “1994))); see also Tex. Prop. Code § 162.032(b) (stating that trustee who misapplies trust funds with intent to defraud commits third-degree felony).”
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