Rebuilding: Construction Considerations in the Wake of Disaster

by Jackson Walker
Contact

Jackson Walker

Southeast Texas has started to move from immediate recovery, including evacuations and draining of flood waters, to removal of water-damaged materials in homes and business and preliminary efforts to start rebuilding. Although all are hopeful to rebuild, the following are some tips and warnings for both owners and contractors about the rebuilding process.

DUE DILIGENCE ON YOUR CONTRACTOR

 Everyone affected by Hurricane Harvey wants the remediation and repair process to move quickly. But due diligence on any potential contractor is important to avoid unscrupulous and fraudulent contractors, payment disputes, potential liens, and poor workmanship which may lead to construction defects. Some tips to finding reputable and qualified contractors are:

1. Make sure the contractor has a permanent business location:

2. Inquire as to how long the company/contractor has been in business:

  • There is no mandatory licensure or training of contractors in Texas (with few exceptions); therefore, you will want to confirm the contractor has requisite experience in construction, but also experience in appropriate flood-damage remediation procedures; and
  • Some municipalities in Texas require that contractors be registered and bonded. Depending on where the work will be performed any potential contractor will need to comply with local requirements.

3. Ask for and verify references:

  • Previous clients are generally the best source of information;
  • Find out if the contractor has good relationships with banks and/or suppliers – when requesting information to verify this make it clear that is for the purpose of verifying references only; and
  • Check the Better Business Bureau (“BBB”) for complaints against the contractor.

4. Enter into a clear written contract with the contractor:

  • A written contract will assist in defining the project scope and potentially help avoid disputes;
  • Non-local contractors must have a written contract (see below);
  • For questions about contract language and its affect, consult a construction law attorney.

5. Do NOT pay for the entire job prior to work being performed:

  • Some contractors may state that they cannot work until the entire balance of the project is paid up front. Be cautious of these contractors. It may be reasonable to pay for supplies up front, but be wary of requests for a large down payment or up-front payment for the work (non-local contractors have specific prohibitions regarding up-front payment – see below);
  • Prior to each payment, require that the contractor provide executed, conditional lien waivers on the forms required by Chapter 53 of the Texas Property Code;
  • Do not pay in cash. Records of payments to contractors are necessary for various reasons, including but not limited to in the event of a payment dispute or lien claim and for tax purposes.  Retain copies of all payment records.

6. Be wary about contractors who offer “sign today” discounted prices, pressure to sign, or unusually low bids.

There are many excellent contractors (local and non-local) to assist recovery efforts. But there are also unscrupulous and fraudulent individuals who would prey on hard times. Please use caution. If it sounds too good to be true, or not in line with what colleagues or peers are experiencing in the market, it may be a scam.

STATUTE GOVERNING DISASTER REMEDIATION CONTRACTORS

 In the wake of Hurricane Harvey, Southeast Texas has seen the best in mankind. But unfortunately, every natural disaster also brings with it a host of those trying to exploit the most vulnerable, which is why in 2011 the Texas Legislature promulgated the Disaster Remediation Contracts Act (the “Act”). The Act contains certain prohibitions and requirements for “disaster remediation contractors” as discussed below.

What contractors are subject to the Act?

“Disaster Remediation Contractors” are defined to be any person who – for compensation – performs removal, cleaning, sanitizing, demolition, reconstruction, or other treatment of  improvements to real property performed because of damage or destruction to property caused by a natural disaster (with few exceptions).

Essentially, local contractors who maintain locations in the county (and adjacent counties) are not considered disaster remediation contractors. Specifically, the Act does not apply to a contractor who maintains a physical business address in the county or adjacent county for at least one year prior to the natural disaster.

What does the Act prohibit?

Disaster Remediation Contractors may not:

  • require a person to make a full or partial payment before the contractor begins work; and
  • require that partial payments exceed an amount reasonably proportionate to the work performed, including materials delivered.

Thus, Disaster Remediation Contractors may not require a down-payment or up-front payment until work begins.

What does the Act require?

Disaster Remediation Contractors are required to have contracts in writing, and contain the following disclaimer in a conspicuous, boldfaced type of at least 10 point:

“This contract is subject to Chapter 58, Business & Commerce Code. A contractor may not require a full or partial payment before the contractor begins work and may not require partial payments in an amount that exceeds an amount reasonably proportionate to the work performed, including any materials delivered.”

Importantly the requirements of the Act may not be waived by any party.  Failure to comply with the Act subjects Disaster Remediation Contractors to the Texas Deceptive Trade Practices Act (“Texas DTPA”), which provides for recovery of attorneys’ fees and treble damages in certain instances.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Jackson Walker | Attorney Advertising

Written by:

Jackson Walker
Contact
more
less

Jackson Walker on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.