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Tex. Prop. Code § 28.003

EXCEPTION FOR GOOD FAITH DISPUTE; WITHHOLDING

Applied in 2 court decisions — leading case RAJ Partners, Ltd. v. Darco Construction Corp. (2006)

Most recently applied in RAJ Partners, Ltd. v. Darco Construction Corp. (December 2006)

Added by Acts 1993, 73rd Leg., ch. 479, Sec. 1, eff

(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.

Official source: Texas Constitution and Statutes. Reproduced from public-domain Texas statutes; confirm against the official source for the current text. Not legal advice.