Liability, Lien, Statutory Payment Bond

The Often Overlooked Protection Provided by a Statutory Payment Bond Under Chapter 53 of the Texas Property Code

Owners of construction projects are often surprised to learn that they are required to withhold 10% retainage on private construction projects in Texas. Failure to withhold 10% can result in liability up to that amount.[1]  Similarly, owners often continue to pay the general contractor after receiving a lien notice with fund trapping language which can …

Defects, Legislation, Lien

UPDATE – More Construction Bills to Watch in the 86th Texas Legislative Session

The Texas Legislature is back in session, and lawmakers generally have until March 8, 2019 to file bills for consideration this session. In our original post on January 31, 2019, we identified several bills of interest to the construction industry that had been filed as of that date. Since that post, the following bills of …

Defects, Legislation, Lien

Construction Bills to Watch in the 86th Texas Legislative Session

The Texas Legislature is officially back in session. While lawmakers generally have until March 8, 2019 to file bills, many bills of interest to the construction industry have already been filed. Below is a list of some key construction related bills we will be following this session along with a description of the bill and …

Lien, Subcontractor

Back to the Basics: Lien Notice Deadlines for First and Second-Tier Subcontractors

Texas Property Code Section 53.056(a)-(c) details the notice requirement deadlines that subcontractors must comply with to perfect a statutory lien on a private, commercial project in Texas. Simply put, the statute sets forth separate notice deadlines dependent on whether the claimant is a second-tier (and lower) subcontractor[1] or a first-tier subcontractor: Second-tier (and lower) subcontractors …

Limitations

The Texas Two-Step: Protecting the Ability to Collect a Judgment

It is not uncommon in the construction industry for a party to find itself involved in litigation. Perhaps a contractor and subcontractor become involved in a payment dispute or perhaps an owner seeks relief for defective work. Regardless of the underlying cause of the dispute, a party who successfully obtains a judgment must protect its …

Alternative Fee Arrangement (AFA), Arbitration

Alternative Fee Structure Goes Live for American Arbitration Association

Although arbitral institutions like the London Court of International Arbitration and International Chamber of Commerce have historically based arbitration costs on models other than a pure hourly-basis, the American Arbitration Association/International Centre of Dispute Resolution recently became the first national institution to make a true alternative fee arrangement available for parties arbitrating under the AAA-ICDR. …

Delay Claims, Disruption Claims, Prime Contract, Subcontract

Hurricane Season and Disaster Preparedness: Part 2 – Insuring the Risk of a Hurricane on a Construction Project

As described by my colleague Sean McChristian in Part 1 of this two-part blog series, planning for hurricane season in Texas is a critical part of mitigating risk in the construction industry. In addition to reviewing force majeure provisions, owners and contractors need to have an understanding of the insurance available to cover property damage …

Delay Claims, Disruption Claims, Prime Contract, Subcontract

Hurricane Season and Disaster Preparedness: Part 1 – Review Your Construction Contracts Now, Not After the Storm

The Gulf Coast hurricane season runs from June 1st to November 30th each year. Because this is a known risk, many businesses prepare emergency response plans to mitigate risks to persons and property, but many of those same businesses are not prepared to mitigate economic risks arising from ongoing construction projects. As we approach the …

Flow-down, Liability, Prime Contract, Subcontract, Subcontractor

It’s a Flow-Down, Not a Flow-Up

Subcontracts between a general contractor and subcontractor often contain a flow-down provision stating that the terms and conditions in the owner/contractor agreement (the “Prime Contract”) are also binding on the subcontractor—making the subcontractor obligated to provisions in the Prime Contract—thus begging the question: if the subcontractor is required to assume the general contractor’s obligations, does …

Certificate of Merit, Experts

Is Your Expert Qualified? – Certificate of Merit Requirements

Filing a certificate of merit (“COM”) can quickly become a sticky situation for any plaintiff pursuing a claim against a design professional. Plaintiffs who comply with the COM requirements can still have their claims dismissed for various reasons. This post focuses on the necessary qualifications of the expert hired to issue a COM. Must a …