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Residential Construction Liability Act, Part 2: Protecting Your Assets During a Claim

Reviewing RCLA

In Residential Construction Liability, Part 1, we talked about how the construction laws of Texas define RCLA, what constitutes a construction defect, a business owner's defenses against RCLA, and how the statute of limitations may affect a claim.

While the RCLA is written to protect homeowners from unscrupulous construction practices, it also contains a fair share of provisions to protect responsible business owners.

As we stated in Part 1, the full text of the Residential Construction Liability Act is located in Chapter 27 of the Texas Property Code. However, contacting The Cromeens Law Firm ensures you have qualified attorneys on your side who specialize in construction law.

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How About that Statute of Limitations?

The statute of limitations includes two time limits for RCLA claims: 2 years for negligence, negligent misrepresentation, and products claims; and 4 years for breach of contract and breach of warranty.

Exceptions to the statute of limitations include the Discovery Rule and Fraudulent Concealment. The former defers a cause of action until the plaintiff knows, or by exercising reasonable diligence should know, of the facts giving rise to the claim. The latter defers an action's accrual period until the plaintiff discovers or should have discovered the deceitful conduct or facts giving rise to the cause of action.

An Offer of Settlement

Texas law allows the contractor to offer a settlement to the homeowner. The contractor has 45 days after receipt of the RCLA letter to make a written offer of settlement. The offer may include an agreement to make repairs, which must be made within 45 days of the acceptance of the letter.

On the other hand, the homeowner has only 25 days to accept or reject the offer letter.

Should the homeowner reject the offer, you will have 10 days to respond with a counteroffer. However, the homeowner may choose to initiate a lawsuit. But if the homeowner rejects a reasonable offer and files a lawsuit, they are only allowed to recover than the fair market value of the contractor's last offer of settlement, or an amount of reasonable monetary settlement, or purchase offer.

Therefore, it's up to you to make the homeowner a reasonable offer. A "reasonable" offer will be determined on a case-by-case basis. That's where the legal experts at The Cromeens Law Firm can hit a home run for your operation! Contact us ASAP and we can walk you through an offer letter for the best possible results.

So How Can RCLA Hurt You?

In the event of a lawsuit filed under RCLA by a homeowner, the damages allowed can be detrimental to your business's bottom line, hurting your productivity time as well as future projects.

You may be liable for the cost of repairs, the cost of any damaged goods, engineering and consulting fees, the cost of temporary housing, a drop in current market value, and, of course, attorney's fees.

The good news is that mediation is possible if the damages caused by the construction defect exceed $7,500. In that case, you have 90 days after the suit is filed to request mediation.

Only the Best Will Do

The Cromeens Law Firm provides clients with expert navigation of Texas law and RCLA claims ensuring business owners reduce their liability by having access to the right tools. Contact one of our experienced attorneys today by calling 713-489-5792 or contact us online to discuss your options.

This article is intended as a general educational overview of the subject matter and is not intended to be a comprehensive survey of recent jurisprudence, nor a substitute for legal advice for a specific legal matter. If you have a legal issue, please consult an attorney. 

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Contact our law firm in Houston or San Antonio to speak with a lawyer who is intimately familiar with the law related to mechanic's liens, collections and contract disputes. Call 713-489-5792 to schedule a free consultation. We accept credit cards, and Spanish translation is available.

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