14 Cornerstone Fall 2025 agchouston.org L E G A L & L E G I S L A T I V E U P D A T E S BREAKING GROUND 89th Legislative Session Update An Examination of Key Construction Bills By James Richards and Allison Miller T HE 89TH LEGISLATIVE SESSION of the Texas Legislature ran from January 14 to June 2, 2025. During this time, approximately 6,500 bills were filed, with over 300 eventually passed. While these bills addressed a variety of topics, construc- tion-related issues — including the vital lien and trust fund laws — were no exception. Key bills affecting the con- struction industry are outlined below, along with their current legislative status. Senate Bill 929 (SB 929) clarified the Texas mechanic’s lien statute. Under Chapter 53 of the Texas Property Code, strict deadlines apply for sending lien notices and recording lien affidavits. Pre- viously, if a deadline fell on a weekend or holiday, there was ambiguity regarding whether that deadline was extended to the next business day. To avoid losing lien rights, claimants had to act before the weekend. SB 929 resolves this by automatically extending deadlines to the next business day. However, this change also benefits general contractors, subcontractors and suppliers by bringing the mechanic’s lien statute into uniformity with traditional calculations of deadlines under Texas law. The bill passed and was signed into law by Governor Abbott on May 21, 2025, and took immediate effect. Senate Bill 841 (SB 841) amended the Texas Construction Trust Fund Act to expand who qualifies as a benefi- ciary. Before this session, only artisans, laborers, contractors, subcontractors or materialmen who labored or furnished labor or material for the construction or repair of an improvement on specific real property, had remedies under the law; in some cases, general contractors were unable to pursue subcontractors who accepted payment from the general con- tractor but then failed to make payment in turn to additional subcontractors or suppliers, as only parties who had not been paid had a legal remedy. SB 841 remedied this by allowing a qualified assignee of unpaid trust funds to be classified as a beneficiary. Assignments must be in writing and executed after the assignee has paid the beneficiary in full, and notice must be provided to the property owner and contractor within seven days. The change restores the ability of contrac- tors and suppliers to recover unpaid funds. SB 841 passed and took effect September 1, 2025. House Bill 2960 (HB 2960) voids contract provisions requiring out-of-state venues for Texas construction disputes. This bill was introduced in response to In re MVP Terminalling, LLC, a 2024 case out of the 14th Court of Appeals, which held that because out-of-state venue provisions were voidable under existing law, prohibitions on such clauses could be waived by the parties. HB 2960 amended the Texas Busi- ness and Commerce Code to make such provisions void, as opposed to voidable. Now, these clauses are unenforceable, and disputes must be filed in the Texas county where the project is located, unless the parties agree otherwise after the dispute arises. HB 2960 took effect September 1, 2025.
