Our Team – Experienced Construction Law attorneys led by Department Head Brian J. Tagtmeier who has mediated/litigated over 1700 Claims in Texas. Experienced and aggressive construction law counsel is at your fingertips – AND YOU NEED IT!
It’s a story we see over and over again. The residential home purchase of your dreams has become an absolute nightmare replete with major construction defects and poor workmanship. We have seen it all.
- Defective foundations.
- Sagging or collapsing roofs.
- Bowing walls.
- Unsound and dangerous ceilings and floors.
- Water damage from improperly installed bathrooms and
- Poorly constructed rooms not built to specifications.
- Plumbing and fixtures improperly installed.
- Non-compliant installation of electrical systems.
- Leaking windows and doors open to the elements.
- Scratched and damaged cabinets and appliances.
- Uneven or dangerous soil compaction.
And this is just a partial list.
The story continues. The clients attempt to resolve their problems with the contractors who invariably show less interest and care after payment has been received and often respond callously or even aggressively to legitimate concerns. One broken promise follows another as the clients finally realize that the defects will never be addressed. It is only after the expenditure of endless time and resources, that an attorney is contacted. The back and forth futility creates enormous emotional upset which is understandable. Fortunately, aggrieved home purchasers have numerous rights and remedies under Texas Law, and we are here to help.
The first step is for experienced construction lawyers to review the underlying contract and discuss the construction defects with potential clients which we perform on a complimentary basis. We want to make sure that the construction claims are valid under Texas law and that there is a clear path ahead to remedy the cited defects. We let potential clients know our legal assessment from our first conversation so they can make a reasoned decision as to next steps.
The key to resolution is based on a little-known Texas statute which governs the rights of the damaged home purchaser and contractor – the Texas Residential Construction Liability Act (“RCLA”). Most individuals and many lawyers have never heard of this law which sets forth the procedures which must be rigorously followed absent which legal rights cannot be pursued.
For starters, a lawsuit cannot be filed for a sixty-day period which allows for a written communication and dialogue between the parties in an attempt to resolve the construction defects amicably. A prematurely filed lawsuit will be instantly abated and kicked out if this requirement is not followed. During this “standstill” period, the RCLA mandates the following communications:
- Notice letter from homeowner to contractor of defects alleged in sufficient detail to be addressed.
- Contractor ability to inspect property and defects within 35 days of receipt of the above notice.
- Contractor ability to respond to defect notice with offer of settlement within 45 days of initial receipt of the defect notice.
- On or before 25 days of receipt of settlement offer, homeowner must detail in writing whether the proposal is unreasonable. If there is no response, the offer is deemed automatically rejected.
Although the above procedure appears burdensome, it does present an opportunity to resolve construction disputes without the expense and angst of litigation. In our experience, the involvement of experienced counsel at this initial stage can open the door to successful negotiations to resolve the underlying dispute. In the typical situation, the builder will consider the merits of our clients claims once attorneys have become involved in an attempt to resolve the dispute in the absence of litigation.
A critical component in advising the client is whether the defects encountered are recoverable under Texas law. The list of the typical problematic defects at the beginning of this article are actionable and can be recovered as they are systemic or structural in nature. Unfortunately, items which relate to more subjective considerations such as the quality of certain workmanship (painting or texture – as examples), can be problematic and are better addressed as early points of negotiation between the parties.
Most clients are unaware that the RCLA limits damages to certain specified items which include the following:
- Cost to repair defects.
- Replacement costs if defects cannot be remedied.
- Engineering and consulting fees which may be
- Temporary housing during period of repair.
- Reduction in market value once defect is addressed.
- Reasonable attorney’s fees.
Clients are often surprised that damages relating to emotional upset or pain and suffering are not recoverable under the RCLA. However, a huge caveat is that the above damage limits are inapplicable if the Contractor does not comply with the procedures set forth under the RCLA which typically arises in these cases. What this means is that the failure of the homebuilder to abide by the strict time requirements of the RCLA results in a waiver of their protections under the law and the damage limitations. We typically confront this situation in our experience, and it is a great fact pattern for our clients. The result is that “all bets are off” and our clients are free to recover whatever damages they seek without limitation!
Another excellent fact pattern, at least as to available remedies, is when the contractor abandons the job. Although this is a horrible situation for the client, it results in the waiver of the RCLA damage caps altogether. As such, the client is free to aggressively pursue all of its legal rights without limitation including the ability to file an immediate lawsuit without abatement.
The legal claims which can be asserted by homeowners relate to the underlying contract which requires an extensive legal review and assessment. Typically, the claims are based on a violation of the agreement by the builder which is known as “breach of contract” under Texas law. In this situation, the legal claim will allege the specific contractual violations and damages necessary to correct the defect. In cases where the builder has outright lied or misrepresented its constructions services or ability to perform, claims based on fraud, misrepresentation, and deceptive trade practice are also available. Attorney’s fees are recoverable for breach of contract under Texas law but (oddly) not for actions based on fraud and misrepresentation.
It is also important for counsel to review the underlying agreement to determine if the language has imposed limitations on the recovery of damages. These provisions can be problematic and need to be addressed in determining what remedies are ultimately available to the client if litigation becomes necessary. Additionally, many contracts include provisions for mandatory mediation and arbitration which are enforceable.
Mediation is actually a preferred option which we recommend as it allows for a potential resolution of the dispute by an experienced “neutral” party trained in addressing construction conflicts. Although the recommendations of the mediator are not binding on either party, the process facilitates a cost-effective resolution in these cases and avoidance of litigation.
If the mediation is unsuccessful, arbitration mandates that the parties file their claims before a private tribunal such as the American Arbitration Association (AAA). Arbitration is binding on the parties and cannot be averted. However, we have found the AAA to be cost-effective for our clients and often a preferred route to the traditional court system.
Finally, the most important recommendation is that the potential client avoid at all costs – small contractors who lack sufficient resources to address construction defects which might arise. Even if a lawyer is successful in resolving a dispute through litigation, these rogue builders lack the financial capability to satisfy a judgment and pay damages.
In these cases, our clients can get stuck holding the bag notwithstanding the merits of their claims.
The bottom line is that there are remedies for aggrieved home purchasers. When your dream house has become a nightmare, you need to seek out a residential defect lawyer with experience and a clear path forward. We are here to help.
How To Sue Your Home Builder: Construction Law
Construction Law is one of the frustrating areas for our clients who have spent hundreds of thousands of dollars on their dream home which turns into a nightmare because of construction defects by homebuilders. You never see it all, but we have experienced (through the eyes of our clients) defective foundations, failure to put in reinforcing steel as required by State and County Law, failure to follow building plans, rooms with the wrong specifications, leakage of dangerous materials, collapsing foundations and ceilings, uncompacted soil, broken sprinkler, rodent infestation, etc. And the list goes on.
What comes next requires an experienced attorney who routinely handles this area of the law. This has been our concentration for many years, and we understand the specific requirements under state law, particularly the RCLA or Residential Construction Liability Act. This statute is not well understood by homeowners and even some attorneys. It was originally passed by the Homebuilder’s Lobby in Texas in an attempt to limit the rights of homeowners in seeking recourse against residential contractors for defective construction.
The RCLA provides for a series of back-and-forth communications and notices between the homeowner and contractor/builder of the residential property which must be followed precisely. Initially, the homeowner is required to set forth in detail the specific defects relating to the property. The contractor is then given an opportunity to respond and propose a settlement that can be accepted or rejected by the homeowner. The contractor is also permitted to request an inspection of the property to better ascertain the nature of the underlying defects and how they might be addressed.
These notice provisions and responses must have complied with exactitude or the ability to recover damages by the homeowner will be impaired. Moreover, if a lawsuit is filed without compliance prior to the expiration of 60 days, the action can be kicked out of court through a process known as an abatement. All of this can result in the needless incurrence of attorney’s fees and, mostly, the inability to recover damages to repair or replace the property. The point of all this is that without the assistance of experienced counsel, an aggrieved homeowner can lose the battle before it even begins. Our job is to make sure that never happens.
In situations where construction has been substantially completed, the RCLA provides a good mechanism to bring the parties together and resolve the dispute in the absence of litigation which is always the preferred option.
When the client is facing construction that has not been substantially completed, typically 50% or less, negotiations are often unsuccessful given the magnitude of the damages and work which needs to be done. In these cases, litigation is often the only option although attorney fees can be recovered under Texas law.
It is also important to understand that the RCLA applies to other types of construction including additional structures, pools and recreation areas, and other improvements. This area of the law is confusing and another reason why it makes sense to consult an experienced attorney to advise as to the next steps.
Bottom line is that construction law is a complex area and should only be performed by experienced attorneys. Feel comfortable that we can guide you through the process of recovery from beginning to end.