Tag Archives: construction

Do Not Pay Invalid Liens To Save Time

“Yea… some guy up and filed a lien out of nowhere. We’re probably just going to pay them and be done with it so that we can move on.”

Unfortunately, I hear this on a weekly basis. In construction, liens are a regular part of doing business. Sometimes, subcontractors file invalid liens on projects and general contractors must try to quickly resolve the lien in order to keep the project moving. Another scenario where a lien can be a headache is when it is preventing the sale of a property. These reasons and countless others result in contractors over paying for liens or paying to resolve invalid liens.

For the most part, the contractors’ reasons for paying invalid liens can be reduced to two things: time and money. General contractors figure that it costs too much and takes too long to contest a lien. This belief is based on their understanding of a typical litigation process. Undoubtedly, some of them have been through long, drawn-out litigation and believe that a lien contest situation will be the same. Others may not have personally experienced litigation, but have familiarized themselves with the process based on the media.

Of course, these beliefs are not completely false. Sometimes litigation can be a long and expensive process. However, what most contractors may not know is that it doesn’t always have to be. This is especially true when contesting an invalid lien. The Texas Property Code as well as flexible attorneys’ fees structures have greatly reduced the costs associated with lien removal.

Section 53.160 of the Texas Property Code is titled Summary Motion to Remove a Lien. Under this chapter, a contractor can contest  a lien by having their attorney file a verified motion attacking the lien’s validity. The motion can attack the lien on the following grounds:

(1) notice of claim was not furnished to the owner or original contractor as required by Section 53.056, 53.057, 53.058, 53.252, or 53.253;

(2) an affidavit claiming a lien failed to comply with Section 53.054 or was not filed as required by Section 53.052;

(3) notice of the filed affidavit was not furnished to the owner or original contractor as required by Section 53.055;

(4) the deadlines for perfecting a lien claim for retainage under this chapter have expired and the owner complied with the requirements of Section 53.101 and paid the retainage and all other funds owed to the original contractor before:

(A) the claimant perfected the lien claim; and

(B) the owner received a notice of the claim as required by this chapter;

(5) all funds subject to the notice of a claim to the owner and a notice regarding the retainage have been deposited in the registry of the court and the owner has no additional liability to the claimant;

(6) when the lien affidavit was filed on homestead property:

(A) no contract was executed or filed as required by Section 53.254;

(B) the affidavit claiming a lien failed to contain the notice as required by Section 53.254; or

(C) the notice of the claim failed to include the statement required by Section 53.254; and

(7) the claimant executed a valid and enforceable waiver or release of the claim or lien claimed in the affidavit.

Using this procedure, your attorney can set the motion for hearing after 21 days. Once the motion is set for hearing the burden is on the person claiming the lien to prove that the required notice and lien affidavit were furnished to the general contractor as is required by the Texas Property Code. The attorney can then argue that the lien is invalid for one of the seven reasons listed above. The statute then states that the court shall make a timely ruling and there is no ability to file an interlocutory appeal.

Essentially, by following this proceeding an attorney may be able to get an invalid lien removed as quickly as 21 – 30 days. Also, because the proceeding is not an actual trial and there is no need for the discovery process, the procedure can be done at a fraction of the cost of regular litigation.  No discovery means there are no depositions, no shuffling documents back and forth, and no hearings forcing the production of critical documents.  These things save contractors money.

In short, this procedure may be less expensive than simply paying for the lien and may not take as long as you think. In the future, when a lien is filed on one of your projects, weigh all the options and if you believe the lien is invalid, talk to your lawyer about this procedure. The more general contractors contest invalid liens, the less likely people are to continue to file them with the belief that they’ll immediately be paid so that the project can move along.

Nothing in this article is to be considered legal advice. If you have questions or need representation concerning a construction matter , please call 832-930-0529 or email us at info@stephensbell.com

Give Us a Break…Literally: Senate Bill Considers Mandatory Breaks for Construction Workers

It’s 2:00 pm on a sunny Friday in Houston, Texas. The temperature is 102 degrees with humidity thick enough to make you question why you elected to spend your summer in the city. You stop at a light downtown and see 20 or more guys in long sleeve shirts working diligently on a construction project. You think to yourself, “My goodness, how can they work out in that heat all day?”

Well, a Texas Senate Panel is considering taking an action that it believes will make those jobs safer for workers. In an effort to prevent illness and deaths from the Texas heat, the panel considered Senate Bill 473 which proposes a requirement that construction companies to give workers mandatory rest breaks. The legislation would require 15-minute rest breaks for every four hours of work on construction sites.

Some cities in Texas have already implemented a similar policy on work sites. In Dallas, construction workers are entitled to a 10-minute break every four hours. Austin is another Texas city that requires breaks. There are also a handful of states that require breaks at construction sites.

The Debate

There is a debate among builders and worker advocates regarding the bill. Builders argue that safety regulations regarding construction work sites should be left to OSHA. OSHA has safety guidelines that are recommended to builders. Builder advocates explain that failure to follow OSHA recommendations can result in fines and is typically strong evidence of negligence in workplace safety litigation which could result in big verdicts against companies. They believe that the threat of litigation and fines are strong enough incentives to push companies to provide a safe work site.  They also believe that the bill could result in over-regulation because the federal government already regulates safety through OSHA and cities could pass similar legislation. Compliance with all three regulations could increase construction costs which would be passed down to the buyer.

Construction worker advocates point out that OSHA does not have a specific heat stress standard. OSHA relies on Section 5(a)(1) of the Occupational Safety and Health Act of 1970 (OSH Act) (also known as the General Duty Clause) to require employers to provide a safe and healthy environment for all workers and recommends that employers, including roofing employers, implement policies to address working during hot weather conditions. OSHA uses a heat index to make suggestions to builders on what to do when the heat reaches certain temperatures. Proponents of the bill argue that companies are not required to follow OSHA’s suggestions and many do not.

Senate Bill 473 would do much more than suggest breaks. Breaks would be mandatory and failure to comply will afford workers a right to file a complaint through the Texas Workforce Commission. The complaints would be investigated and handled by the Commission. Then, the commission could potentially penalize companies through the same process it uses for wage disputes.

There are a number of questions regarding the way this bill would impact the industry. From a legal standpoint one can expect that if passed, the bill will have a significant impact on construction contracts. Specifically, delay and delay damages clauses could be affected. Project timelines could also be impacted.

Nothing in this article is to be considered legal advice. If you have questions or need representation due to nonpayment on a construction project , please call 832-930-0529 or email us at info@stephensbell.com

The Texas Residential Construction Liability Act and Its Benefits to General Contractors: Part 1

If you’ve been building long enough, you know that every project comes with its challenges. Whether it’s unforeseen additional work requiring a change order or project delays due to material shortages, there is typically a fire to put out. Unfortunately, when it comes to residential construction defects, many challenges progress into full blown disputes that are eventually litigated.

Texas Residential Construction Liability Act

Chapter 27 of the Texas Property code is known as the Texas Residential Construction Law Act (RCLA). The RCLA was enacted in 1989 in response to a growing trend of favorable verdicts for homeowners when pursuing claims against contractors for defects.  The act is applicable to:

  • any action to recover damages or other relief arising from a construction defect, except a claim for personal injury, survival, or wrongful death or for damage to goods; and
  • any subsequent purchaser of a residence who files a claim against a contractor. Prop. Code § 27.002

The act requires the homeowner to take certain procedural steps before pursuing litigation against a contractor. In the past, homeowners have tried to bypass these requirements by alleging that the contractor responsible for the alleged defect is not a “contractor” as is defined by the statute. Fortunately, the act defines a contractor as follows:

any person contracting with an owner for the construction or sale of a new residence constructed by that person or of an alteration of or addition to an existing residence, repair of a new or existing residence, or construction, sale, alteration, addition, or repair of an appurtenance to a new or existing residence. Tex. Prop. Code Ann. §27.001(5)

As you can see, this definition is broad and covers nearly every possible person working on a residential project.

Owners have also tried to circumvent the requirements of the RCLA by alleging that the dispute is not as a result of a construction “defect” as is defined by the statute. However, defect is also defined by the act as:

a matter concerning the design, construction, or repair … of an alteration of or repair … to an existing residence … on which a person has a complaint against a contractor.” Tex. Prop. Code Ann. §27.001(4)

Again, the definition acts as a catch all definition concerning residential construction complaints. Given the broad definitions and applicability, it is very likely that if a contractor is sued by a homeowner concerning a residential project, the action falls under the RCLA. In part 2 of this series you will see why this benefits you as a contractor.

Nothing here is intended to be legal advice nor should it be construed as such. If you have questions or would like to discuss an issue with your company, please call 832-930-0529 or visit http://www.StephensBell.com