What are the rights of subcontractors when a contractor is paid?

In Texas, subcontractors have a number of rights when a contractor is paid. These rights are established under the Texas Construction Trust Fund Act (CTFA). Under the CTFA, subcontractors and suppliers are granted priority to the funds paid to the contractor. This means that subcontractors are entitled to receive payment from the contractor’s funds before other creditors, such as banks or the IRS. In addition to priority rights, subcontractors also have the right to file a claim against the contractor for payment if payment is being withheld. This is called a “trust fund claim” and it requires the contractor to deposit the funds in a trust fund account. Subcontractors can then file a lien against the trust fund account in order to receive payment from the contractor. Subcontractors are also allowed to collect from any debts the contractor owes to them if they have not been paid yet. This is known as a “subcontractor’s lien” and it requires the contractor to deposit any debts they owe to subcontractors in a trust fund account. The subcontractor can then file a lien against the trust fund account in order to be paid the amount owed. Finally, if a contractor fails to pay the subcontractors, the subcontractors can take legal action against the contractor, such as filing a lawsuit. The subcontractor can also file a lien against the contractor’s property in order to receive payment. By understanding the rights of subcontractors in Texas under the CTFA, subcontractors can protect themselves financially and receive payment when a contractor is paid.

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What are the rights of subcontractors when a contractor is paid?

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