Tex. Codes » Property Code · TITLE 4. ACTIONS AND REMEDIES · CHAPTER 28. PROMPT PAYMENT TO CONTRACTORS AND SUBCONTRACTORS
Texas Codes

Tex. Prop. Code § 28.003 (2026)

Exception For Good Faith Dispute; Withholding

✓ current as of May 2026
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Sec. 28.003. EXCEPTION FOR GOOD FAITH DISPUTE; WITHHOLDING. (a) If a good faith dispute exists concerning the amount owed for a payment requested or required by this chapter under a contract for construction of or improvements to a detached single-family residence, duplex, triplex, or quadruplex, the owner, contractor, or subcontractor that is disputing its obligation to pay or the amount of payment may withhold from the payment owed not more than 110 percent of the difference between the amount the obligee claims is due and the amount the obligor claims is due. A good faith dispute includes a dispute regarding whether the work was performed in a proper manner.

(b) If a good faith dispute exists concerning the amount owed for a payment requested or required by this chapter under a contract for construction of or improvements to real property, excluding a detached single-family residence, duplex, triplex, or quadruplex, the owner, contractor, or subcontractor that is disputing its obligation to pay or the amount of payment may withhold from the payment owed not more than 100 percent of the difference between the amount the obligee claims is due and the amount the obligor claims is due. A good faith dispute includes a dispute regarding whether the work was performed in a proper manner.

Added by Acts 1993, 73rd Leg., ch. 479, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. 805, Sec. 2, eff. Sept. 1, 1999.

Notes of Decisions
Cited in 6 cases (3 in the last 5 years), 2005–2026 · leading case: All Seasons Window & Door Mfg., Inc. v. Red Dot Corp., 181 S.W.3d 490 (Tex. App. 2005).
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All Seasons Window & Door Mfg., Inc. v. Red Dot Corp., 181 S.W.3d 490 (Tex. App. 2005). “Compare Tex. Prop.Code Ann. § 28.002(a) (Vernon 2000), with Tex.”
RAJ Partners, Ltd. v. Darco Constr. Corp., 217 S.W.3d 638 (Tex. App. 2006). “’ ” See Tex. Prop.Code Ann. § 28.003(b) (permitting owner to withhold amounts subject to good faith dispute).”
Grapevine Grp. Concrete Contractors, Inc. (Cross-Appellee) v. YC Partners, Ltd. D/B/A Yantis Co. & Yantis Corp. (Cross-Appellant) (Tex. App. 2025). · cites it 2× “See TEX. PROP. CODE § 28.003(b) (referring to “the amount owed for a payment requested or required.”
D2 Excavating, Inc. v. Thompson Thrift Constr., Inc. (S.D. Tex. 2021). “Tex. Prop. Code §§ 28.003, 28.004. TTC has failed to supply any authority for the proposition that the demand risks being held ineffective if it is not made for the amount ultimately found due and owing.”
Grapevine Grp. Concrete Contractors, Inc. (Cross-Appellee) v. YC Partners, Ltd. D/B/A Yantis Co. & Yantis Corp. (Cross-Appellant) (2026). “TEX. PROP. CODE § 28.003(b). It should also be noted, however, that “while section 28.”
Star Operations, Inc. & Great Am. Ins. Co. of New York v. Dig Tech, Inc. (Tex. App. 2015). “On July 13, 2015, Dig Tech filed a notice of appeal regarding the single issue of the trial court's denial of prejudgment interest in the amount of 18% per annum under Texas Property Code§ 28.003. 2. Dig Tech wishes to dismiss the cross-appeal on this single issue.”
Tex. Prop. Code § 28.003(b): 3 cases
RAJ Partners, Ltd. v. Darco Constr. Corp., 217 S.W.3d 638 (Tex. App. 2006). “’ ” See Tex. Prop.Code Ann. § 28.003(b) (permitting owner to withhold amounts subject to good faith dispute).”
Grapevine Grp. Concrete Contractors, Inc. (Cross-Appellee) v. YC Partners, Ltd. D/B/A Yantis Co. & Yantis Corp. (Cross-Appellant) (Tex. App. 2025). “See TEX. PROP. CODE § 28.003(b) (referring to “the amount owed for a payment requested or required.”
Grapevine Grp. Concrete Contractors, Inc. (Cross-Appellee) v. YC Partners, Ltd. D/B/A Yantis Co. & Yantis Corp. (Cross-Appellant) (2026). “TEX. PROP. CODE § 28.003(b). It should also be noted, however, that “while section 28.”
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