Construction Law

Construction Law Attorneys in Dallas

Protecting and Enforcing Contractor Rights Throughout Texas

Contractors and suppliers have the legal right to be paid promptly for work completed. Unfortunately, issues of non-payment are all too common in the Texas construction industry. If a property owner or contractor fails to make timely payment to you or your firm, you may need professional legal assistance to hold the offending party accountable and recover what you are owed.

Our Dallas construction law attorneys can work to protect your interests in any type of construction dispute. We can leverage our years of experience to benefit your case. Our firm is extremely familiar with the tools and mechanisms that can be used to enforce your rights and recover payment. If your conflict requires litigation to resolve, we can aggressively represent you and will do everything possible to deliver the results you need and deserve.

If you are involved in a construction dispute and need legal support, do not hesitate to call (972) 564-8860 or contact us online to discuss your options. We offer free
initial consultations.

The Texas Prompt Pay Act

The state of Texas’s Prompt Pay Act aims to protect contractors and subcontractors in conflicts involving late or non-payment. The law assesses interest fees and other penalties when property owners and prime contractors do not issue timely payment.

Can a Contractor Withhold Payment to a Subcontractor?

For private construction projects, a property owner must issue payment to a prime contractor within 35 days of receiving an invoice. Prime contractors are then obligated to pay subcontractors within 7 days of receiving their payment. Unlawfully withheld payments will accrue interest at a rate of 1.5% per month. If issues over withheld payment require litigation, any property owner or contractor that is found to have violated the Prompt Pay Act may also be required to pay legal fees and other costs.

When Can a Property Owner or Contractor Withhold Payment?

There are several situations where a property owner or contractor can lawfully withhold payment for an extended period:

  • In the event of a “good faith” dispute over some element of the private construction project, the property owner or contractor can withhold the disputed amount until the conflict has been resolved. In many cases, resolving these disputes will require taking the matter to court.
  • If there is a dispute over shoddy workmanship, a property owner or contractor may be able to withhold payment if they take several procedural steps. A property owner or contractor must inform the contractor or subcontractor in writing about the deficiency and how it will result in non-payment. They must then give the contractor or subcontractor a reasonable opportunity to cure the inadequate work. If a resolution is not reached and the shoddy workmanship is not addressed, the property owner or contractor can legally withhold payment.
  • If the property owner took out a loan to finance the construction project, delays in fund disbursement can allow them to temporarily withhold payment. In these cases, a property owner must facilitate payment within 5 days of receiving funds from their lender.

Do the Same Rules Apply to the Texas Government?

The rules differ slightly for public construction projects. Generally, a Texas government entity must pay prime contractors within 30 days of the completion of work or the receipt of an invoice, whichever is later. Prime contractors must pay subcontractors within 10 days of receiving payment.

If the government fails to pay contractors on time, withheld payments begin to accrue interest at a rate of 1% plus the current prime rate published by the Wall Street Journal. This usually works out to be a bit less than the interest accrued on withheld payments for private projects. The Texas government can also lawfully withhold payments if there is a “good faith” dispute or some federal obstruction preventing them from dispensing funds.

Our construction law lawyers in Dallas can help you understand your rights and obligations under Texas’s Prompt Pay Act. We can review any dispute you are involved in and determine how best to move forward and recover any payment owed.

If you need legal support for a construction dispute, call (972) 564-8860 or contact us online to discuss your options. We offer free initial consultations.

Suspending Work for Nonpayment in Texas

Contractors and subcontractors working on public and private construction projects will in many cases have the right to suspend work when they have not been appropriately paid. If the deadline for timely payment passes, contractors and subcontractors can submit a notice of intent to suspend performance to the owner, lender, and/or prime contractor. This notice must inform the offending party that all work will stop in 10 days if timely payment is not facilitated.

Contractors and subcontractors cannot be legally penalized for suspending work when they have not been paid. When this right has been exercised, contractors and subcontractors do not have to return to work until they have been paid the full amount that is owed plus any reasonable demobilization and remobilization expenses associated with the stoppage. Contractors and subcontractors cannot be held responsible for damages caused to the project as a result of a suspension of work unless the property owner or prime contractor explicitly informs them of potential consequences in writing prior to the stoppage.

Suspending work can be an extremely useful negotiating tactic, but it does not come without inherent risks. Our firm can advise you on how a suspension is likely to play out and serve as your advocate in any communications and negotiations with a project’s property owner or prime contractor.

Perfecting a Mechanic Lien in Texas

A mechanics lien is a legal tool that allows contractors, subcontractors, material suppliers, and any other construction professionals the right to seize an involuntary security interest in the property they work on. In other words, a mechanics lien allows contractors and subcontractors to secure compensation when payment is being withheld. However, navigating how to perfect and enforce a mechanic lien can be extremely confusing.

In most situations, a mechanics lien will automatically “attach” to a property when a contractor starts work. However, this lien will not encumber the property until you take formal steps to “perfect” it.

You may need to consider perfecting a mechanics lien if you fail to receive payment for work completed. If you are a prime contractor, you do not necessarily have to inform the property owner of your intention to perfect the lien. If you are a subcontractor, you are required to send one or more notices before you can take steps to perfect the lien. We can determine your notice requirements and make the necessary filings.

Once the appropriate notices have been delivered, a contractor or subcontractor will need to file their lien with the appropriate county recorder office. The lien will take effect after being served to the property owner.

At Roquemore Skierski PLLC, our construction law attorneys in Dallas can assist you with perfecting and enforcing mechanics liens. We are extensively familiar with Texas’s notification requirements and can ensure all necessary steps are taken when managing construction liens. Our firm is committed to helping you recover payment and will aggressively work to protect your interests in any dispute.

We routinely serve clients in Tarrant County and throughout the state of Texas. Learn more about our construction law services by contacting us online or
calling (972) 564-8860.

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