Texas SB1615 amends the Property Code to classify misapplication of trust funds by trustees in disputes unrelated to the original contract.

Texas SB1615 amends Section 162.031 of the Property Code by adding a new subsection (a-1). This amendment specifies that a trustee who retains or diverts trust funds due to a dispute, including an alleged default, arising under a construction contract other than the one in which the funds were originally placed under the trustee's control, has misapplied those funds. The changes apply only to contracts entered into after the Act's effective date, which is September 1, 2025.

Texas SB1615 amends the Property Code to classify misapplication of trust funds by trustees in disputes unrelated to the original contract.

Texas SB1615 amends Section 162.031 of the Property Code by adding a new subsection (a-1). This amendment specifies that a trustee who retains or diverts trust funds due to a dispute, including an alleged default, arising under a construction contract other than the one in which the funds were originally placed under the trustee's control, has misapplied those funds. The changes apply only to contracts entered into after the Act's effective date, which is September 1, 2025.