Texas Residential Construction Contract. When it comes to residential construction in the state of Texas, all kinds of defects are common, and oftentimes, both builders and contractors are infamous for not responding to customer complains, as well as honor warranties and correct any and all defective work. In order to start a formal claim against your builder or contractor, there are procedures that must be followed as outlined in Chapter 27 of the Texas Property Code. This section of the code was enacted back in 1989 “to promote settlement between homeowners and contractors, and to afford contractors the opportunity to repair their work in the face of dissatisfaction.” Chapter 27 is a statute that is mandatory in the state and is legally required to be followed in order to make a valid claim against a builder or contractor. Additionally, it also applies to both residential remodel projects and new residential construction and is also applicable to both the original and new homeowners. Any new home or remodel contract that is subject to Chapter 27 is also required to contain a disclosure settlement in no less than 10-point bold font that outlines all of the requirements of the statute. Those who fail to include this notice in a contract can end up subjecting the builder or contractor to a $500 penalty.
Builders and contractors may respond to the notice by inspecting, testing, and documenting any and all defects. They may also make an offer in writing to the homeowner regarding a settlement, which can include an agreement by the builder or contractor to repair the defects or to have the defects repaired by an independent contractor, which the builder or contractor will cover the costs of. Repairs can be made within the span of 45 days from when the notice of settlement acceptance is received. Alternatively, in the event a written offer is made to the homeowner and they feel that it’s unreasonable, the homeowner will have a total of 25 days to respond outlining their reasoning for rejection, which will then provide the builder or contractor an additional span of ten days to provide a counteroffer. If a reasonable offer is rejected by the homeowner or if they do not permit to have an opportunity to inspect or repair defects, then the possible recovery of a homeowner via a lawsuit or arbitration will be limited to the initial offer. Furthermore, attorney’s fees for the homeowner will also be limited to those that were incurred prior to the reasonable offer being made.
Chapter 27 also states information regarding which types of damages a homeowner can recover against a builder or contractor. These include the following:
Reasonable cost to repair defects
Reasonable cost to repair or replace damaged personal property caused by defects
Necessary and reasonable engineering and consulting fees
Reasonable expense for temporary housing that has incurred during repairs
Decrease in current market value following the repair of defects that are structural in nature
Reasonable litigation costs and attorney’s fees
Texas Residential Construction Contract. Chapter 27 is also a step that should always be prepared by an experienced construction attorney. Many of these notices can be prepared in as little as three to five hours.