2023 Texas Statutes › Property Code › Title 4 - Actions and Remedies › Chapter 28 - Prompt Payment to Contractors and Subcontractors › Section 28.009. Right to Suspend Work

Sec. 28.009.  RIGHT TO SUSPEND WORK.  (a)  If an owner fails to pay the contractor the undisputed amount within the time limits provided by this chapter, the contractor or any subcontractor may suspend contractually required performance the 10th day after the date the contractor or subcontractor gives the owner and the owner's lender written notice:
(1)  informing the owner and lender that payment has not been received;  and
(2)  stating the intent of the contractor or subcontractor to suspend performance for nonpayment.
(b)  For purposes of Subsection (a), the contractor or subcontractor must give the owner's lender the written notice only if:
(1)  the owner has obtained a loan intended to pay for all or part of the construction project;
(2)  the lender has remitted funds, including acquisition funds, for construction purposes;
(3)  the loan obtained:
(A)  is evidenced by a promissory note secured by a deed of trust recorded in the real property records of the county in which the real property that is the subject of the contract is located;  and
(B)  is not only for the acquisition of personal property or secured only by a security instrument;
(4)  the owner or lender, at the lender's option:
(A)  securely posts not later than the 10th day after the date construction commences a sign on the project site in a prominent place accessible to each contractor, subcontractor, and supplier that states the lender's name, address, and the person to whom any notice should be sent;  and
(B)  maintains the sign during the pendency of the construction project;
(5)  not later than the 10th day after the date construction commences, the owner or lender, at the lender's option, provides a written copy of the notice prescribed by Subdivision (4) to the contractor and any subcontractor or supplier identified by the contractor by depositing the notice properly addressed in the United States mail, first class, postage paid;  and
(6)  not later than the 10th day after the date a subcontractor or supplier performs labor or furnishes materials or equipment for the construction project, the owner, contractor, or subcontractor provides a written copy of the notice prescribed by Subdivision (4) to the subcontractor or supplier.
(c)  A contractor or subcontractor who suspends performance as provided by this section is not:
(1)  required to supply further labor, services, or materials until the person is paid the amount provided by this chapter, plus costs for demobilization and remobilization;  or
(2)  responsible for damages resulting from suspending work if the contractor or subcontractor has not been notified in writing before suspending performance that payment has been made or that a good faith dispute for payment exists.
(d)  A notification that a good faith dispute for payment exists provided under Subsection (c) must include a list of specific reasons for nonpayment.  If a reason specified includes labor, services, or materials provided by a subcontractor that are not provided in compliance with the contract, the subcontractor is entitled to a reasonable opportunity to:
(1)  cure the listed items;  or
(2)  offer a reasonable amount to compensate for listed items that cannot be promptly cured.
(e)  This section does not apply to:
(1)  a contract for the construction of or improvements to a detached single-family residence, duplex, triplex, or quadruplex;  or
(2)  a contract to improve real property for a governmental entity.
(f)  The rights and remedies provided by this section are in addition to rights and remedies provided by this chapter or other law.
Added by Acts 1999, 76th Leg., ch. 805, Sec. 4, eff. Sept. 1, 1999.