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Texas Property Code - Section 162.005. Definitions

Legal Research Home > Texas Laws > Property Code > Texas Property Code - Section 162.005. Definitions

§ 162.005. DEFINITIONS.  In this chapter:                                   
		(1)  A trustee acts with "intent to defraud" when the 
trustee:              
			(A)  retains, uses, disburses, or diverts trust 
funds with the intent to deprive the beneficiaries of the trust 
funds;
			(B)  retains, uses, disburses, or diverts trust 
funds and fails to establish or maintain a construction account as 
required by Section 162.006 or fails to establish or maintain an 
account record for the construction account as required by Section 
162.007;  or
			(C)  uses, disburses, or diverts trust funds that 
were paid to the trustee in reliance on an affidavit furnished by 
the trustee under Section 53.085 if the affidavit contains false 
information relating to the trustee's payment of current or past 
due obligations.
		(2)  "Current or past due obligations" are those 
obligations incurred or owed by the trustee for labor or materials 
furnished in the direct prosecution of the work under the 
construction contract prior to the receipt of the trust funds and 
which are due and payable by the trustee no later than 30 days 
following receipt of the trust funds.
		(3)  "Direct cost" means a cost included under a 
construction contract that is specific to the construction of the 
improvement that is the subject of the contract.
		(4)  "Indirect cost" means a cost included under a 
construction contract that is not specific to the construction of 
the improvement that is the subject of the contract.
		(5)  "Financial institution" means a bank, savings 
association, savings bank, credit union, or savings and loan 
association authorized to do business in the state.
		(6)  "Construction account" means an account in a 
financial institution into which only trust funds and funds 
deposited by the contractor that are necessary to pay charges 
imposed on the account by the financial institution may be 
maintained.

Added by Acts 1987, 70th Leg., ch. 578, § 3, eff. Aug. 31, 1987.  
Amended by Acts 1997, 75th Leg., ch. 1018, § 3, eff. Sept. 1, 
1997.

Last modified: August 11, 2007