Advocacy Update: Trust Fund & Retainage Bills Do Not Advance
Texas BOMA actively engaged in shaping key lien law legislation introduced by Chairman Keith Bell this session. The original versions of these bills raised serious concerns for commercial property owners and managers, including expanded criminal liability, erosion of contractual flexibility, and premature release of retainage. Ultimately, none of the bills passed this session, but Texas BOMA’s engagement led to significant improvements, including key amendments, clarified language, and the withdrawal of one bill entirely. After months of testimony, negotiation, and collaboration with lawmakers and stakeholders, here is where each bill stands:
CSHB 3287 / SB 1612 – "Trust Fund" Retainage (Reserve) Bill
Original Concern: Classified retainage as trust funds, exposing owners to felony liability, even when funds were lender-controlled or not yet disbursed.
Texas BOMA Position: Moved from opposed to neutral following amendments.
House Outcome: CSHB 3287 was amended to exclude lender-held funds and apply only to perfected liens. Cleared the committee but did not reach the House floor.
Senate Outcome: SB 1612 was scheduled for a House vote on May 26, 2025. Chairman Bell postponed it to June 22, effectively killing the bill for this session.
CSHB 3288 / SB 1615 – "Trust Fund Diversion" Bill
Original Concern: Imposed criminal penalties on owners for withholding retainage, even in good-faith disputes across contracts.
Texas BOMA Position: Moved from opposed to neutral after securing owner protections.
House Outcome: Amended to clearly exempt owners and limit liability to misuse by non-owner trustees. Cleared the committee but did not reach the House floor.
Senate Outcome: SB 1615 did not advance.
HB 3289 / SB 1614 – "Good Faith Dispute" Bill
Original Concern: Prohibited managing vendor disputes across multiple contracts, restricting owners’ ability to ensure project completion.
Texas BOMA Position: Supported the decision to withdraw the bill.
House Outcome: Withdrawn by Chairman Bell after determining its concerns were addressed in other bills.
Senate Outcome: SB 1614 did not advance.
CSHB 3290 / SB 1530 – "Retainage Timeline" Bill
Original Concern: Required retainage release within 61 days of a certificate of occupancy or first use, regardless of whether the project was fully completed.
Texas BOMA Response: Proposed amendments to:
- (a-1): Release tied to substantial completion, not just CO/use.
- (a-2): Timeline extension allowed with written notice of incomplete work.
- (a-3): Added industry-standard definition of “substantial completion.”
Texas BOMA Position: Supported the final version of CSHB 3290 with these agreed-upon amendments.
House Outcome: The original version of CSHB 3290 cleared the committee. Texas BOMA’s revisions were prepared as floor amendments, but the bill never reached the House floor.
Senate Outcome: SB 1530 did not advance.
Texas BOMA is grateful to Chairman Bell and his staff for their openness to collaboration and constructive dialogue. While none of the bills ultimately passed this session, the substantial improvements secured reflect the strength of coordinated advocacy and thoughtful negotiation. These issues are likely to return next session, and Texas BOMA stands ready to continue protecting the interests of commercial property owners and managers across the state.