Houston – Construction and Development companies engaged in helping to rebuild within areas directly impacted by the recent Texas wildfires should keep H.B. 1711 (effective September 1, 2011) in mind prior to initiating any agreements. Failure to comply with the new statute, which imposes limitations on prime contractors engaging in disaster remediation, will subject the contractor to penalties under the Texas Deceptive Trade Practices Act.
Summary of H.B. 1711:
1. Prohibits the contractor from requiring any pre-payment or deposit from the owner prior to the commencement of work on the project;2. Requires progress billing only in amounts “reasonably proportionate” to the work performed; and3. Requires the inclusion of a special disclosure in their prime contract with the property owner. This statute applies to those prime contractors conducting construction, reconstruction, removal, cleaning, sanitizing, demolition or other improvements to real property performed because of damage or destruction to that property caused by a natural disaster (defined as fire, flood, earthquake, wind, storm, or wave action that results in a disaster declaration by the governor under Tex. Gov’t. Code Ch. 418).
However, contractors who have maintained a “physical business address” in the county, or an immediately adjacent county, in which the property is located for at least one year preceding the date of the prime contract are exempt.
BOTTOM LINE: If your company intends to be the general contractor for a fire remediation project in a county which you’ve not previously had an office, this statute applies.
Contributed by Tracy Galimore; 713.850.8626 or tgalimore@andrewsmyers.com.
