The RCLA and Legal Considerations with Residential Subcontractors

With house prices at a record high and little evidence that they will fall anytime soon, many homeowners in Austin and Central Texas have taken the route of home remodeling or new home construction over buying a new house on the market. What those homeowners may not realize is that if they have serious legal problems with their contractors down the road, they can’t just walk down to the courthouse and file a lawsuit. Our Partner Patrick Caballero explains how the state of Texas handles residential subcontractor disputes and what homeowners need to know. 

The RCLA and What It Means for You

Texas has a statute – the Residential Construction Liability Act or RCLA – that dictates specific steps that must be followed by someone who hires a contractor for work on their home. And it has a broad application. The RCLA applies to construction of a new home, repair or alteration of an existing home, or building an addition to a home. If a homeowner has a problem with the work that was or is being performed by their contractor, it is covered by the requirements of the RCLA. A bad paint job, faulty wiring, damage to an existing part of the home or yard during construction, or even taking too long to get the work done all fall under the RCLA.

Requirements for Filing a Lawsuit Under the RCLA

First, a homeowner must send a letter to the contractor by Certified Mail, return receipt requested. That’s important because these days most people normally ask their contractor for updates informally, either in person, by phone, or by email. Those forms of communication are not sufficient to start the clock for the purposes of the RCLA. Second, the letter must provide specific details of everything that the homeowner believes is wrong with the contractor’s work. This is to give the contractor sufficient notice, so they can determine if there is a legitimate issue and try to make it right. Third, the RCLA gives the contractor 35 days from the receipt of that letter to ask for additional information or documents and request an inspection. Then they have additional time to make a reasonable settlement offer. Once an offer is extended, the homeowner has 25 days to either accept that offer or explain why they think it’s unreasonable. If the homeowner does not accept the offer, this triggers additional time for the contractor to revise their settlement offer.  
 
The upshot of all this is that a homeowner has to wait at least 60 days to file a lawsuit against a contractor for a residential defect. The Texas legislature was very deliberate in passing this act, and their goal was to minimize litigation and provide a framework by which both homeowner and contractor have specific steps that they must take before going down the road towards a lawsuit. 

Protecting Homeowners, Protecting Contractors

Is this a good thing? It probably depends on which side of the equation you’re on. But whether you’re a homeowner having work done, or a contractor that does residential work, you want to make sure that you’re complying with the letter of the RCLA so that you can best protect your interests. If you’re a homeowner who is unsatisfied with contracted work on your home – or if you’re a contractor dealing with a homeowner complaint regarding your work – Richards Rodriguez & Skeith’s experienced Real Estate or Business Litigation team may be able to help you navigate the RCLA and its regulations. Contact us today!