RESIDENTIAL CONSTRUCTION CONTRACT DISCLOSURE

  Grantor:   Jeff Sidiling                                 Lencier:    Southwest Bank of Texas NA.
								       Poet Oak
	     Houston, TX                                               P.O. Box 27459
								       S Post Oak Park/4400 Post Oak Parkway
								       Houston, TX 77027-7459
								       (713) 235-35130

    KNOW YOUR RIGHTS AND RESPONSIBILITIES UNDER THE LAW, You are about to enter Into a transaction to build a new home or remodel
    ealuting resIdential property. Texas law re~uIrss your contractor to provide you With this brief overview of some of your rIghts, responslbllities, and risks
    In this transaction.
    CONVEYANCE TO CONTRACTOR NOT REQUIRED. Your contractor may not require you to convey your real property to your contractor as a
    condition to the agreement for the construction of improvements on your property.
    KNOW YOUR CONTRACTOII. Before you enter into your agreement far the construction of Improvements to your real property, make sure that you
    have Investigated your contractor. Obtain and verily references from qther people who have used the contractor for the type and size of construction
    project on your property.
    GET IT IN WRITING. Make sure that you have a written agreement with your contreotor that includes: (1) a description of the work the contractor Is to
    perform; (2) the required or estimated time for completion of the worfc; (~3) the opst of the work or how the cost will be determined; and (4) the
    procedure and method of payment, including provisions for statutory retalnage and conditions for final payment. if your contractor made a promise,
    warranty, or representation to you concerning the work the contrecior I# to perform, make sure that promise, warranty or representation is specified in
    the written agreement. An oral promise that Is not Included in the written agreement may not be enforceable under Texas law.
    READ BEFORE YOU SIGN. Do not sign any document before you have repd and understood IL NEVER SIGN A DOCUMENT THAT INCL.IJDES AN
    UNTRUE STATEMENT. Take ~'our time In reviewing documents. If you t~orrcw money from a lender to pay for the improvements, you are entliled to
    have the loan closing documents furnished to you for review at least one bu~lness day before the closing. D.o.jiot waive this requirement unless a bona
    fide emergency or another good cause exists, and make sure you understand thQ documents before you sign them. If you fail to comply with the terms
    of the documents, you oouid lose your property. You are entitled to have your own attorney review any documents. If you have any question about the
    meanIng of a document, consult an attorney.
    GET A LIST OP SI.DCONTRACTORS AND SUPPUERS. Before constructIon commences, your contractor Is required to provide you with a fist of the
    subcontractors end suppliers the contractor Intends to use on your project. Your contractor Is required to supply updated Information on any
    subcontractors and suppliers added after the fist Is provided. YeW contractor Is not required to supply this Information If you sign a wrttten waiver of
    your rights to receive this Information.
    MONiTOR TIlE WORK. Lenders and governmental authorities may inspect the work In progress from time to time for their own purposes. These
    Inspections are not inlended as quality control Inspections. Quality control is a matter for you and your contractor. To ensure that your home Is being
    constructed In accordance with your wishes and specIfications, you should inspect the work yourself or have your own Independent inspector review
    the work In progress.
    MONITOR PAYMENTS. If you use a lender, your lender Is required tq provide you with a periodic statement showing the money disbursed by the
    tender from the proceeds of your loan. Each time your contractor requests payment kern you or your lender for work performed, your contractor is also
    required to furnish you with a disbursement statement that lists the name apd address of each subcootraclor or supplier that the contractor Intends to
    pay from the requested funds. Review these statements and make sure that the money is being properly disbursed.
    CLAIMS BY SUBCONTRACTORS AND SUPPUERS.             Under Texas law, If ~ subcontractor or supplier who furnishes labor or materials for the
    construction of Improvements on your property is not paid, you may become liable and your property may be subject to a lien for the unpaid amount,
    even If you have not contracted directly with the subcontractor or supplier, To avoId liability, you should take the following actions:
       (A) If you receive a written notice from a subcontractor or supplier, you should withhold payment from your contractor for the amount of the claim
       slated in the notice until the dispute between your contractor and the subcontractor or supplier is resoived. If your lender is disbursing money
       direelly to your contractor, you should Immediately provide a copy of the notice to your lender and Instruct the tender to withhold payment In the
       amount of the claim stated In the notice, If you continue to pay the contractor alter receiving the written notice without withholding the amount of
       the claIm, you may be ilable and your property may be subject to e lien for the wnount you failed to withhold.
       (B) During construction and for 30 days after final completion, termination, or abandonment of the contract by the contractor, you should withhold
       or cause your lender to withhold 10 percent of the amount of payments made for the work performed by your contractor. This is sometimes
       referred to as 'statutory retainage'.  If you choose- not to withhold the 10 percent for at least 30 days after final completion, termination, or
       abandonment of the contract by the contractor and II a valid claim Ip timely made by a claimant and your contractor fails to pay the claim, you may
       be personally liable and your property may be subject to a lien up to the amount that you failed to withhold.
    If a claim Is not paid within a certain time period, the claimant is required to file a mechanic's lien affidavit In the real property records In the county
    where the property Is located. A mechanic's lien affidavit is not a lien on your property, but the filing of the affidavit could result In a court Imposing a
    lien on your property if the claimant Is successful In litigation to enforce the lien claim.
    SOME CLAIMS MAY NOT BE VM..ID. When you receive a written notice of a claim or when a mechanic's lien affidavit is tiled on your property, you
    should know your legal rights and responslbliitles regarding the claim. Not all claims are wild. A notice of a claim by a subconlractor or supplier is
    requIred to be sent, and the mechanic's lien affidavit is required to be flied, witimin strict time periods. The notice and the affidavit must contain certain
    InformatIon, All claimants may not fuily comply with the legal requirements to colleQI on a claim. If you have paid the contractor In fuli before receMng
    a notice of a claim and have fully complied with the law regarding statutory retalnage, you may not be liable for that claim. Accordingly, you shoutd
    consult your attorney when you receive a written notice eta claim to determine the true extent of your liability or potential lability for that claim.
    OBTAIN A UEN RELEASE AND A BILLS-PAID AFFIDAVIT. When you receive £ notice of claim, do not release wIthheld funds without obtaining a
    sIgned and notarized release of lien and claim from the claimant. You can also reduce the risk of having a claim filed by a subcontractor or supplier by
    requiring as a ocnditlon of each payment made by you or your lender that your contractor furnish you with an affidavit stating that eli bits have been
    paid. Under Texas 1kw, on final cempletion of the work and. before final payment, the contractor Is required to furnish you with an affidavit stating that
    ail blis have been paid. If the contractor discloses any unpaid bli in the affidavit, you should withhold payment In the amount of the unpaid bill until
    you receive a waiver of lien or release kern that subcontractor or supplier,
    OBTAIN TITLE INSURANCE PROTECTION. You may be able to obtain a tile Insurance policy to Insure that the title to your property and the existing
    Improvements on your property are free from liens claImed by subcontractors and suppliers. If your policy Is Issued before the Improvements are
    completed and covers the value of the improvements to be completed, you should obtain, on thebompletion of the improvements and as a condition of
    your final payment, a 'compisiton of improvements' policy endorsement.                This endorsement wlil protect your property kern liens claimed by
    subcontractors and suppliers that may arise from the date the original lit, policy Is Issued to the date of the endorsement.
    EACH UNDERSIGNED OWNER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF ThIS RESIDENTIAL CONSTRUCTION CONTRACT
    DISCLOSURE. ThIS ESIDESTIAL CONSTRUCTION CONTRACT DISCLOSURE IS DATED APRIL 27,2000.
    GRANTOR:


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													 ETF-0942F-000099
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