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A Homeowner’s Guide to Disputes with Builders, Contractors, and Remodelers in Texas.

If you are a homeowner and have a dispute with a builder, contractor, or remodeler related to your home in Texas, your dispute is probably covered by a Texas law called the RCLA. This article contains general information and should not be substituted for competent legal advice from an attorney. In addition, a contract between you and your builder may also affect your legal rights, and you should consult with an attorney.

What is the RCLA?

RCLA is an abbreviation for the Residential Construction Liability Act which is Chapter 27 of the Texas Property Code.

The RCLA creates a legal process that every person must follow if they have a dispute with a builder, contractor, or remodeler related to construction defects involving a residence.

What claims or disputes does the RCLA cover?

The RCLA applies to any claim to recover damages arising from "construction defects."

Under the RCLA, construction defect means any claim against a contractor that concerns the design, construction, or repair of:

  • a new residence;
  • an alteration of or repair or addition to an existing residence:
  • any structure or recreational facility next to a residence, but not part of the residence;

"Contractor" includes builders, remodelers, and employees of the contractor. "Residence" includes a single family house, duplex, triplex, four -plex, and condominiums.

The RCLA does not apply to claims for personal injury, survival, wrongful death or for damages to goods.

How does the RCLA process work?

A homeowner must send a certified letter to the contractor's last known address describing the complained of defects in reasonable detail. The purpose of the notice is to encourage pre-suit negotiations to avoid the expense of litigation.

At the contractor's request, the homeowner must provide to the contractor any evidence, including expert reports, photographs or videotapes, of the nature and cause of the defect(s) and the nature and extent of necessary repairs. The RCLA only requires you to turn over expert reports you already have, not go and get new ones. Of course, you should have some basis for believing that there are defects in the first place. Within 35 days of receiving the homeowner's letter, the contractor inspects the residence to determine the nature and cause of the defect and necessary repairs, if any.

Not later than 45 days after the contractor receives the homeowner's certified letter, the contractor may make a written offer of settlement to the homeowner describing in detail the kind of repairs to be made by the contractor. The settlement offer may include attorney’s fees and fees for experts. In general, the repairs shall be made within 45 days after the homeowners accept the contractor's settlement offer.

A homeowner and contractor may agree, in writing, to extend any of these time periods.

Although not necessary, it is a good idea to have an attorney assist you with this process, and most builders will have an attorney on their side.

You may not sue your contractor without following the RCLA process unless the statute of limitations on your claim is about to expire. If you do so, the contractor will ask the Court to suspend your case until the RCLA process is followed. (You should contact an attorney to advise you on the statute of limitations for your case).

What if the homeowner feels the contractor's offer is unreasonable?

The homeowner must notify the contractor, in writing, and state in reasonable detail the reasons why the homeowner considers the offer unreasonable.

The contractor may then make a supplemental written offer of settlement within 10 days of receiving the homeowner's letter.

What if the homeowner rejects a reasonable offer from the contractor?

The homeowner's recovery of damages at trial will be limited to the fair market value of the contractor's last settlement offer.

A judge, jury or arbitrator will determine whether a final offer of settlement under the RCLA is reasonable.

If your contractor makes an unreasonable settlement offer, what happens next?

You may then file suit against your contractor. Be aware that if your claim against the contractor is for more than $7,500.00, the court will require the parties to attend court-ordered mediation of the dispute if the contractor requests it. Each party will be required to split the costs of the court-ordered mediation.

If I win at trial, what damages can I recover?

  • the reasonable costs of repairs to cure any construction defect;
  • the reasonable and necessary costs to replace or repair damaged goods in the home;
  • reasonable and necessary engineering and consulting fees;
  • reasonable necessary temporary housing expenses during the repair period;
  • reduction in current market value of home after defect is repaired it the defect was structural;
  • reasonable and necessary attorney’s fees;

Are there some home defects for which a contractor would not be responsible?

Yes, the RCLA states that a contractor is not responsible for any damages caused by:

  • negligence of a person other than the contractor or the contractor's agents or employees;
  • failure of a homeowner to take reasonable action to mitigate the damages or take reasonable action to maintain the residence;
  • normal wear, tear, or deterioration;
  • normal shrinkage due to drying or settlement of construction materials with the tolerance of building standards.
  • the contractor’s reliance on written information about the home that was obtained by the contractor from official records if the information in the records was false or inaccurate and the contractor/builder did not know and could not reasonably have known the information was inaccurate.

In many cases, the contractor or builder will blame the home’s problems on one of the items listed above, and the homeowner will need an experienced attorney as well as expert witnesses to refute the contractor’s claims.

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