Texas storms bring a flood of contractor issues

The recent storms throughout Texas certainly have had a tremendous impact on numerous lives and property. However, this impact may extend even further. The process of rebuilding businesses and homes can be overwhelming for many, especially when deciding which contractor to trust and retain. In years past, there have been countless instances of unscrupulous builders or out-of-state contractors flocking to Texas to take advantage of property owners following a natural disaster. There are steps owners and contractors can take to protect themselves from further damage.

In 2011, the Texas Legislature passed Chapter 58 to the Texas Business and Commerce Code. The purpose of this Chapter was to protect both legitimate Texas contractors and property owners from fly-by-night contractors who prey on owners following a natural disaster. We have all heard stories of families whose house was damaged following a natural disaster and who paid a large deposit to a contractor to repair their home, only to have the contractor disappear with their money and not perform any work. In this instance, owners are not the only victim. The actions of such contractors also impact the businesses of legitimate Texas contractors who follow the law and are simply trying to provide for their families.

While Tarrant County has not yet been declared a natural disaster area, at the time of this article, 31 counties in Texas have been including Parker, Denton, Hood, and Johnson. This is important because if you are having work performed on your property, this Chapter will protect you against unscrupulous builders and price gauging because the contractor cannot accept full or partial payment before it begins the work or that is not proportionate to the work performed.

Consider the scenario where the Trinity River floods and damages all the business along its banks including the local Mom and Pop restaurant. All of the owners are going to be competing for the same contractors. Mom and Pop, in an effort to reopen their business quickly, are forced to hire a random contractor. If Mom and Pop do not protect themselves, they could end up giving their contractor all of their insurance proceeds, only to have him fly the coup and leave them without funds to rebuild their restaurant. This could put Mom and Pop out of business.

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If you are the contractor performing work in these counties, you must provide a statutory disclosure to the owner as part of its contract. Contractors who fail to provide this disclosure violate the Texas Deceptive Trade Practices Act and subject themselves to damages. In this scenario, what if Mom and Pop owned a contracting business and failed to provide the correct disclosure? Mom and Pop could find themselves on the wrong end of a lawsuit and being sued for DTPA damages.

Prior to engaging a contractor to repair your property following a natural disaster, owners are encouraged to research your contractor before entering into a contract or paying them any money. Owners should consider contractors who are members of the Texas Association of Builders, Associated General Contractors, local homebuilding associations, or the Certified Master Builder Corporation. Typically, these contractors have roots in the community, are knowledgeable of applicable laws, and have a vested stake in performing legally compliant work. Texas contractors who perform disaster remediation are encouraged to contact their attorney or trade associations to obtain the statutory disclosure necessary to comply with the statute. Experienced construction attorneys and associations such as the Texas Association of Builders and Certified Master Builder Corporation have forms for this very situation.

Stephen L. Polozola is a shareholder with the Fort Worth law firm of Decker Jones PC. and focuses his practice on construction law. This article is provided for informational purposes only, is not a substitute for specific legal advice, and is not intended to create an attorney-client relationship between Polozola, his firm, and the readers of this publication. www.deckerjones.com