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Can you summarize Tex. Fin. Section 59.011?
GENERAL PROVISIONS > LENDER LIABILITY FOR CONSTRUCTION.
Short Summary
This provision, added by Acts 2005, 79th Leg., Ch. 1018 (H.B. 955), Sec. 5.01, eff. September 1, 2005, governs the liability of lenders and builders in relation to construction defects in foreclosed homes. According to this provision, a federally insured financial institution regulated under the Texas Finance Code is not considered a builder for the purposes of Chapter 27, Property Code. Additionally, a lender regulated by the Texas Finance Code that acquires a home through foreclosure or other legal means when the loan is in default is not liable to a subsequent purchaser for any construction defects that the lender had no knowledge of prior to acquiring the home. Similarly, a builder hired by a lender to complete the construction of a foreclosed home is not liable for any construction defects that the builder had no knowledge of prior to the lender’s acquisition of the home. However, the builder is subject to Chapter 27, Property Code, for work performed for the lender after the lender acquires the home. This provision was amended by Acts 2023, 88th Leg., R.S., Ch. 768 (H.B. 4595), Sec. 9.002, eff. September 1, 2023.
Whom does it apply to?
Federally insured financial institutions regulated under the Texas Finance Code, lenders regulated by the Texas Finance Code, and builders hired by lenders
What does it govern?
Lender liability for construction
What are exemptions?
None mentioned
What are the Penalties?
No specific penalties mentioned
Jurisdiction
Texas