Texas · Through 89th 2nd Called Legislative Session, 2025

Tex. Finance Code § 59.011: LENDER LIABILITY FOR CONSTRUCTION.

(a) For purposes of Chapter 27, Property Code, a federally insured financial institution regulated under this code is not a builder.
(b) A lender regulated by this code that forecloses on or otherwise acquires a home through the foreclosure process or other legal means when the loan is in default is not liable to a subsequent purchaser for any construction defects of which the lender had no knowledge that were created prior to the acquisition of the home by the lender.
(c) A builder hired by a lender to complete the construction of a foreclosed home is not liable for any construction defects of which the builder had no knowledge that existed prior to the acquisition of the home by the lender, but the builder is subject to Chapter 27, Property Code, for work performed for the lender subsequent to the acquisition of the home by the lender.
Added by Acts 2005, 79th Leg., Ch. 1018 (H.B. 955), Sec. 5.01, eff. September 1, 2005.
Amended by:
Acts 2023, 88th Leg., R.S., Ch. 768 (H.B. 4595), Sec. 9.002, eff. September 1, 2023.

Where this section sits in the code

FINANCE CODE
TITLE 3. FINANCIAL INSTITUTIONS AND BUSINESSES
SUBTITLE A. BANKS
CHAPTER 59. MISCELLANEOUS PROVISIONS
SUBCHAPTER A. GENERAL PROVISIONS

(a) For purposes of Chapter 27, Property Code, a federally insured financial institution regulated under this code is not a builder.

(b) A lender regulated by this code that forecloses on or otherwise acquires a home through the foreclosure process or other legal means when the loan is in default is not liable to a subsequent purchaser for any construction defects of which the lender had no knowledge that were created prior to the acquisition of the home by the lender.

(c) A builder hired by a lender to complete the construction of a foreclosed home is not liable for any construction defects of which the builder had no knowledge that existed prior to the acquisition of the home by the lender, but the builder is subject to Chapter 27, Property Code, for work performed for the lender subsequent to the acquisition of the home by the lender.

Added by Acts 2005, 79th Leg., Ch. 1018 (H.B. 955), Sec. 5.01, eff. September 1, 2005.

Amended by:

Acts 2023, 88th Leg., R.S., Ch. 768 (H.B. 4595), Sec. 9.002, eff. September 1, 2023.

Collected 2026-08-27T01:47:13Z. Source file · JSON

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