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3 Benefits of a Demand Letter Written by an Attorney

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If you’re a contractor having trouble obtaining payment for completed work from an owner, a demand letter could be exactly what you need. Depending on the situation, a demand letter may be more appropriate than a lawsuit. Sending a demand letter rather than pursuing litigation against a business partner as a first course of action can even help preserve your reputation.

Read on to learn about the benefits of having a Houston contractor attorney from Cotney Law draft a demand letter for you.

1. Can Result in Payment

The ultimate goal is to get you the money you’re owed. A demand letter written by an attorney lets the project owner know you are serious about collecting payment and will persevere until you get compensated fairly. To impress the gravity of the situation on the owner, your attorney can add references to specific laws and contractual obligations that were not upheld. This may be all that’s needed to recover funds owed to you.

2. Saves Time and Costs

If you’ve spoken in person or on the phone to a nonpaying project owner, the situation can get heated and convoluted quickly. Before you know it, you’ve lost half a day to arguing without gaining any traction. A letter gives you the time and separation to state your case cooly and logically.

Having an attorney draft the demand letter shows that you are prepared if further action is necessary, and that’s often all it takes. Using courtesy and professionalism, your attorney will create a calculated, diplomatic demand letter as a means to an end. Taking the demand letter as a stepping stone instead of skipping ahead to a lawsuit has another upside too: drafting a demand letter takes less time and costs less than a lawsuit. That’s time back that you can use to work on paying projects.

3. Establishes Documentation

If there’s still no sign that the project owner is going to pay you, a demand letter can be used as an exhibit during litigation to prove that you provided notice. Drafting a letter also encourages the nonpaying party to write you back, providing further documentation. Sending the letter through certified mail with return receipt requested is another way to add to your evidence to prove that the project owner knows you made an effort to resolve the payment issue before litigating.

If you would like to speak with one of our Houston contractor attorneys, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

Even the most seasoned contractors are often baffled by the sheer volume of knowledge required to skillfully handle construction pricing and contracting. If you feel like you’re losing out on your contracts, consult a Houston construction lawyer from Cotney Law to assist you with contract drafting, review, and negotiation.

In part one of this two-part series, our Houston construction lawyers introduced the topic of construction pricing and contracting by discussing some of the factors that influence pricing and the best procedures for submitting a competitive bid to procure lucrative contracts. Now, we will discuss negotiated contracts and speculative residential construction.

Negotiated Contracts

Unlike projects that seek out the best contractor through competitive bidding, private owners can opt to select a contractor directly. Negotiated contracts are more flexible with pricing arrangements and allow contractors more freedom when working on projects of substantial cost and complexity. Additionally, these contracts are ideal for repeated projects such as those that reuse apartment building design schemes. In this case, if one particular contractor has proven their efficacy with a past project, there’s little reason to seek another contractor unless price considerations come into play.

As a contractor, negotiated contracts can be extremely lucrative, especially if you are duplicating a past project. Calculating the price of a negotiated contract typically follows one of these methods:

  • Cost plus fixed percentage
  • Cost plus fixed fee
  • Cost plus variable fee
  • Target estimate
  • Guaranteed maximum price or cost

Speculative Residential Construction

When building houses or condominiums in new communities, contractors often build units prior to purchase. This is because contractors anticipate the demand of these units. If you build quality units, they will typically sell, so speculative residential construction can be quite lucrative. Plus, since there’s no fixed price of housing, you can scale the price to meet the current demand. Finding financing for these types of projects is relatively easy when working with lending institutions because these types of projects have been proven to make a considerable return on investment over time.

Whether you’ve been a contractor for two years or twenty years, it’s always smart to partner with a Houston construction lawyer to assist you with a broad range of services including bid proposals, bid disputes, contract review, contract negotiation, and more.

If you would like to speak with our Houston construction lawyers, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

When constructing multiple facilities, each unique in their own way, it’s important to calculate independent pricing for each facility to account for the variable nature of construction projects. At the most basic level, the construction contract price is determined by the direct project cost. This cost includes the cost of field supervision and the contractor’s markup for overhead expenses and profit.

Although determining the cost to build a facility is dictated by many factors, it’s imperative that you have a comprehensive understanding of how these costs are calculated to ensure that your profits are maintained throughout a broad range of distinctive projects. In this two-part series, the Houston construction attorneys at Cotney Law will take an in-depth look at construction pricing and contracting.

Factors Influencing Price

Depending on the type of facility you are contracted to build and the location of the proposed project, your pricing will vary greatly. There are four major categories of construction:

  • Residential housing
  • Commercial buildings
  • Industrial complexes
  • Infrastructure

It’s vital to procure an accurate cost estimate before proposing a price to the owner. Once you have signed the contract, you will be legally responsible for fulfilling the contents of the contract. The cost, pricing scheme, and payment terms should be clearly explained in the contract. Since projects across these four categories can range from thousands to billions of dollars, you should always consult with a Houston construction attorney to make sure that you clearly understand your responsibilities before proceeding to sign a contract.

Submitting a Competitive Bid

If you want to procure lucrative contracts, it’s imperative to build a fundamental understanding of the bidding process. Submitting a competitive bid requires the contract to procure a detailed plan of the proposed project and any specifications to help illustrate how the job will be completed. This must take into consideration the objectives and requirements of the owner. You should also reflect on your prior jobs to see if the bid seems like a good fit. While submitting a cheaper bid might help you procure a contract, if you are unable to meet the requirements of the contract, you could find yourself embroiled in a legal dispute. Plus, another contractor could hire a Houston construction attorney to dispute your bid. If you want to protect your bid, a Houston construction attorney can assist you.

How do you establish that you are a “qualified contractor?” First, you will need to present evidence of past projects and exhibit financial stability. Procuring a bid for a private project is often easier than a public one since owners have the freedom to choose a contractor at will. They can allow contractors to openly compete for jobs or restrict applications to pre-approved contractors.

When it comes to public projects, the rules governing bid proposals are closely monitored by the government to give all contractors an equal chance of winning their bid. This process is enforced strictly to eliminate collusion or any other unethical or illegal actions.

To learn more about construction pricing and contracting, read part two.

If you would like to speak with our Houston construction attorneys, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

When it comes to filing and perfecting a lien against a property, the property’s classification can have an immense influence on the tools available at your disposal to collect your overdue payment. As a result, before you can pursue a lien, you must first determine whether you supplied labor or materials to a residential property or a commercial property. Although the difference between these two types of properties is quite drastic, it’s not unthinkable to believe that you could find yourself occupying a gray area without a clue as to how you should proceed. When this happens, it’s important to have a Houston construction lien attorney on your side to clarify your legal recourse for pursuing a lien against an owner who refuses to pay.

Texas Property Code Section 53.001

The term “residential construction project” is defined under the Texas Property Code Section 53.001(10).

It states: “Residential construction project means a project for the construction or repair of a new or existing residence, including improvements appurtenant to the residence, as provided by a residential construction contract.”

In the State of Texas, lien laws offer greater protections to residential properties, especially if the property is utilized as the owner’s homestead. By comparison, commercial properties are protected, but not to the same degree that residential properties are. Since there are only two classifications for building construction, if a structure qualifies as commercial, then it is inherently non-residential, and vice-versa.

Similarly, Texas Property Code Section 53.001(9) defines a “residential construction contract” as “a contract between an owner and a contractor in which the contractor agrees to construct or repair the owner’s residence, including improvements appurtenant to the residence.” Put plainly, a commercial construction project will not be occupied as a homestead by its owner after completion.

The Residential Versus Commercial Debate Can Be Complicated

As we mentioned above, the key to determining whether a project is residential or commercial in nature depends largely on its use. For example, if you are contracted to build a custom home for a homeowner, the project is considered residential. However, if the property is later rented out to a tenant, the property would no longer be considered a residential property according to Texas Property Code. Additionally, building a spec house might seem like an example of residential construction, but it is actually considered a commercial project. In fact, building homes in a large scale development is considered commercial construction until the units have been sold to owners. Finally, apartment complexes are commercial properties despite being occupied by residents.

If you would like to speak with our Houston construction lien attorneys, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

Texas has complicated lien laws, and the homestead lien laws are no exception. As a contractor, you don’t have to file monthly notices like subcontractors and material suppliers do. However, if you fail to fulfill your lien prerequisites, the subcontractors, material suppliers, and sub-subcontractors lose their lien rights. Not only will you lose out on payment for the services or materials for the lien you wished to file, but your business relationships will suffer.

In this article, a Houston contractor attorney gives you some insight on how homestead lien laws work in Texas.

Have a Contract

In order to secure a lien on a homestead, you must execute a written contract before beginning work or supplying any materials. As a contractor, by creating this contract with the owner (and spouse) you are making sure anyone else working on the site, like subcontractors, can benefit from the contract. If the owner of the property is married, regardless if only the owner is on the deed, both spouses need to sign the contract.

You must file the contract with the county clerk. If the homestead is in Houston, that means filing it by certified mail or in person with the Harris County Clerk’s Office. If you do not receive timely payment, you can move on to filing an affidavit of lien.

Affidavit of Lien

For a homestead property, the affidavit of lien must include certain text at the top in at least 10-point bold type. The text at the top of the affidavit must state, “NOTICE: THIS IS NOT A LIEN. THIS IS ONLY AN AFFIDAVIT CLAIMING A LIEN.”

In order to have a valid lien on the homestead, a specific notice must be given to the owner. It is listed in Section 53.252, part g. It tells the owner that their property will be subject to a lien for the amount that they are liable to pay you to distribute to subcontractors and suppliers.

The affidavit of lien can then result in the court filing a lien on the property.

Consult with an Attorney

Lien laws are complicated and if any deadlines are missed or paperwork incorrectly filed, it can result in losing your rights to lien the property of a client who doesn’t pay. It’s good to consult with an attorney who is familiar with liens and construction law. Cotney Law can help you with lien questions, construction law, and litigation.

If you would like to speak with our Houston contractor attorneys, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

Texas has expansive lien laws that include options for filing liens that contractors in most states don’t have. Other than statutory mechanic’s liens, contractors are able to assert constitutional liens in Texas.

In part one of this article, a Houston construction lawyer gave some insight to how mechanic’s lien laws work in Texas. In this part of the article, we are going to go over constitutional lien laws.

Constitutional Liens

Texas is one of only seven states with provisions for liens in its constitution. Working directly with the owner of the property may afford you the ability to utilize a constitutional lien. This type of lien is only possible if you are contracting with the owner of the property or their agent. A constitutional lien may be filed after the filing period for a statutory mechanic’s lien has passed.

Constitutional liens are self-executing, meaning you don’t need to send notice to the owner, but it is a good practice and gives better documentation if you do send notice. Because you have a contract with the owner, the law assumes the owner knows they haven’t paid you.

To claim a constitutional lien, you need to file a lien affidavit as you would for a mechanic’s lien. Recording your lien in a timely manner is important, otherwise the property you’re trying to put the lien against could be sold before you file. If you haven’t asserted the lien yet, do it before the two- to four-year statute of limitations has run out.

A Houston Construction Attorney Can Help You

Texas lien laws are complicated, you may benefit from someone who knows the law well and can help you protect your rights. Cotney Law employs construction law professionals who can help you understand your options for filing a lien. Our lawyers can advise you if you have lien questions, if filing a lien is no longer an option, or if you need legal representation.

If you would like to speak with our Houston construction lawyers, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

Texas has some of the most complicated lien laws of any state. The two main kinds of liens available to contractors are mechanic’s liens and constitutional liens. Both of these kinds of liens begin with a contract with the property owner or representative of the property owner. If an owner is not paying you for your work, it may be time to think about filing a preliminary notice or a lien.

In part one of this article, a Houston construction lien attorney explains mechanic’s liens in Texas.

Preliminary Notices

It is important to give the owner ample time to pay before filing a lien. In some cases, just filing a notice can result in payment. In Texas, all notices are due the 15th day of the second month after you have commenced work at the site. If you are doing any kind of specialty work, you may wish to file a Notice of Specially Fabricated Materials.

Notices must be filed with the Harris County Clerk’s office to be valid and maintain proper records. Send notice to owners or their representatives by way of certified mail and request a return receipt for documentation.

Statutory Mechanic’s Liens Deadlines

The deadlines to file mechanic’s liens are fairly complicated and vary by property type, such as residential, non-residential, and homestead. Homestead properties have different deadlines and laws, covered in another article. It is always good to check with the owner of a residential property to make sure it is not a homesteaded property before starting your work, so you can comply with the law.

The deadlines for filing the Affidavit of Mechanic’s Lien are as follows:

  • Non-residential: Lien must be filed by the 15th day of the fourth month after the day the debt accrued. The deadline to enforce the lien is two years after the last day possible to file the lien or one year from the completion date of the work, depending on which date is later.
  • Residential: Lien must be filed by the 15th day of the third month after the day the debt accrued. The deadline to enforce the lien is one year after the last day possible to file the lien or one year from the completion date of the work, using the later date.

The lien affidavit must be sent to the Harris County Clerk’s office and to the owner with certified mail. It must be sent to the owner no more than five days after it is filed with the County Clerk.

There may still be options to assert a lien if you’ve already missed the deadline for a mechanic’s lien. Read part 2 of this article to learn about constitutional liens.

If you would like to speak with our Houston construction lien attorneys, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

As the number of construction sites increase, so does the need for more middle-skills construction workers. That means more construction workers need education beyond high school but don’t need a four-year degree. The Greater Houston Partnership has come up with a helpful tool to get more people involved in the kind learning needed for middle-skills construction jobs.

In this article, a Houston construction attorney gives you an overview of this new program.

What is the UpSkill Houston Program?

The UpSkill Houston program is the joint effort of educators, employers, and organizations in the local community. Apart from construction, health sciences and transportation jobs are also highlighted because they are facing a large skills gap as well.

The program focuses on jobs that need formal education past high school but not a bachelors degree. This may be enticing for people who do not want the often massive debt associated with a four-year college degree.

Program Features

One feature of the program is videos of real people explaining what it’s like to have their job. The “My Life As” video series offers insights from people working in the field as they talk about their jobs and benefits, such as financial security. The videos are not the only resource, there are also worksheets and printouts to help the curious discover more about possible fields of employment on the website.

Help for the Construction Worker Shortage

When asked why construction is more prominent than the other types of employment on the website, Bryant Black from the Greater Houston Partnership said, “In the beginning, we were hearing more and more from our member organizations that they were having trouble attracting those workers, so construction has organically become a big part of UpSkill out of necessity.” A survey by Associated General Contractors in 2018 found that around 78 percent of construction firms in Texas are finding it difficult to recruit workers with the needed skills.

The program partners with K-12 schools, which helps more young people learn about middle-skills construction jobs. This could eventually help the aging construction workforce bolster its numbers with younger workers.

If you would like to speak with our Houston construction attorneys, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

There’s plenty of sand in the world, but not all sand can be utilized for construction materials. Sand is an important component of concrete, but the methods utilized to extract the best sand for this job can leave the environment in shambles. Therefore, it is imperative that the construction industry makes a push for more sustainable construction processes that reduce the amount of raw materials needed to complete jobs.

In part one of this two-part series, the Houston contractor attorneys at Cotney Law explained why dredging beaches and river beds negatively affects the environment while reflecting on the construction industry’s unsustainable need for sand. Now, we will continue to discuss this topic while considering solutions to this pressing issue.

Desert Sand is Useless for Construction

There are numerous deserts throughout the world that are covered with sand; so, why is the construction industry only tapping into beaches and river beds? This sand is largely useless for construction due to years of erosion polishing it down into smooth, rounded grains that lack the necessary grit and angular composition to effectively make concrete. This issue doesn’t exist in beaches or river beds.

A Cycle of Excessive Excavation

The OECD estimates that the world uses 27 billion tons of sand a year. They expect this to double to 55 billion tons by 2060. If you factor in the volume of sand and gravel used for land reclamation purposes such as coastal developments and roads, this number rises sharply to an estimated 40 tons. Roughly 20 tons of sediment are produced naturally each year, so our needs are clearly superseding availability.

Proposing Solutions

Scientists are now working together to find solutions to this problem including:

  • Utilizing more efficient building methods
  • Finding suitable substitutes for cement and sand that don’t compromise the durability and structural integrity of concrete
  • Using more recycled materials from demolished buildings

Researchers at Bath University have proposed one solution—replacing ten percent of the sand used to create concrete with plastic. They believe that by doing this, they can significantly reduce the amount of sand needed to be excavated to create concrete.

“There’s a serious issue with plastic waste,” said Dr. Richard Ball, a member of Bath University’s architecture and civil engineering department. “Anything we can do to address this and find alternatives to putting plastic in landfill is welcome.”

A similar development out of Australia is using recycled plastic to fortify concrete. This cuts costs and lessens the environmental impact of alternatives like traditional steel mesh. This technology, created by engineering firm Fibercon, uses 100 percent recycled plastic to cut the amount of CO₂ produced by as much as 90 percent. As researchers continue to develop these new technologies, our raw material construction will decrease drastically.

If you would like to speak with a Houston contractor attorney, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

The construction industry is responsible for extracting billions of tons of sand and gravel each year. These raw materials are utilized to make concrete for building residential and commercial structures. Clearly, these excavations are taking a toll on the environment. As the industry continues to strip beaches and river beds of their raw materials, we are not only witnessing the destruction of the environment, we are contributing to greenhouse gas emissions and the disruption of delicate ecosystems.

In this two-part series, the Houston construction lawyers at Cotney Law will discuss this pressing issue and examine a variety of strategies for reducing raw material consumption in the construction industry. As a contractor, adopting sustainable practices is one way to show that you care about the environment and are willing to seek out workarounds to help the environment prosper, but if you want to remain compliant with all current legislation as you transition into new, green construction methods, contact a Houston construction lawyer.

Dredging Beaches and River Beds

Extracting sand from a flowing body of water is like removing the governor from a car. Sand helps limit the speed of flowing water, so removing the sand accelerates this flow to unmanageable levels. This can cause the water table to fall, which allows water to bleed into land along the river bank. When this land is populated with farms or other plots of fertilized land, it can lead to major issues such as Lake Okeechobee’s toxic runoff in Florida.

On the other hand, dredging beaches leaves beachside property vulnerable to increased damage from storms. Sand operates as a buffer between the storm and a piece of property. It helps mitigate some of the excess energy produced by storms, but when it is excavated residents are left utterly defenseless when a storm rolls into their area. These two scenarios illustrate why reducing raw material consumption is so important. If the construction industry continues to excavate sand recklessly, communities and ecosystems will be left in a state of disrepair.

The Unsustainable Demand for Sand is Growing

In a study titled “A Looming Tragedy of the Sand Commons,” Dr. Aurora Torres of the German Centre for Integrative Biodiversity Research (iDiv) states that the problem with our raw material consumption is that our “demand for sand is outpacing what we know about the environmental impact of extraction.” She believes that this issue is a “hidden ecological disaster,” which explains why very little is being done to reduce raw material consumption.

Why don’t we use sand from the desert? What is the best type of sand for making concrete? These questions and more will be answered in part two.

If you would like to speak with our Houston construction lawyers, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.