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Was the Texas trust fund statute violated in this circumstance?

Texas

Hello I own a sole proprietor LLC and provided painting, refinishing and dry wall repair services to two apartment complexes located in San Antonio, TX both owned by the same property management company. The property management company is disputing charges in one property but yet withholding payment from the other. Does the Texas Trust Fund statute apply in this situation?

3 replies

Jun 3, 2020
Possibly, if the management company is acting as a general contractor on the project and has utilized payment it received from the owner for the work your company performed to pay other contractors. However, the trust fund act requires considerably more proof than breach of contract/lien claims, the latter of which can be just as, if not more, effective in getting you paid.
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Jun 3, 2020
Hello, I would need to see what is in your contract first. If your contract says the owner can withhold funds from another project that would most likely supersede any trust fund statute. Let me know if you have any further questions. Karalynn Cromeens Managing Partner 8431 Katy Freeway Houston, TX 77024 Tel: (713) 715-7334 www.TheCromeensLawFirm.com Privileged Attorney-Client Communication and/or Attorney Work Product: The above message and attachments, if any, are confidential and may be protected by the attorney/client privilege and/or attorney work product. The unauthorized disclosure, use, dissemination or copying of this e-mail, or any information it contains, by anyone other than the intended recipient, is prohibited. If you are not the named recipient, or have otherwise received this communication in error, delete it immediately and notify the sender at the office number listed above or by return email.
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Jun 3, 2020
Greetings.

The answer to your question depends on the facts.

Did the property owner hire you, or a contractor? If payments were first made to a contractor, which are owed to you, then there could be a “trust fund” and the Trust Fund Act (Ch. 162 of the Property Code) could apply.

Even if the Trust Fund Act does not “apply” (in that no “trust funds” existed as defined by the Property Code), there are avenues of relief for recovering what you are owed. Again, these are all very fact-dependent issues.

Give me a call if you want to discuss the issue.

Please note that this email does not, and is not intended to, constitute legal advice or create an attorney-client relationship; instead, all information and content in this email is for general informational purposes only.
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