Texas General Contractors Legally Operate Without Licenses

texas license licensure general contractorsTexas requires licenses for auctioneers, used auto-part recyclers, massage therapists, cat breeders, and others.

General contractors need no license.

Some argue this reduces administrative burdens and thereby keeps down what would otherwise be more excessive costs, which would be passed on to consumers. Others argue this exposes consumers to risky contractors and unduly places the burden of enforcement on private litigants. Additional arguments on both sides abound.

Our Tips & Resources posts are intended to provide general educational information. Like all other material on this blog, it is not a substitute for legal advice.

Flooding Caused by the Diversion of Surface Water

texas overflow surface water runoffHave you diverted water onto your neighbor’s property? Has water been directed or channeled onto your property?

Under section 11.086 of the Texas Water Code, a person may not divert or impound the natural flow of surface waters, or permit a diversion or impounding by him/her to continue, in a manner that damages the property of another by the overflow of the water diverted or impounded.

By its own terms, this statute only prohibits certain changes to the natural flow of surface water. “The term surface water, as used in section 11.086, is not defined in the Water Code, but has been interpreted by Texas courts to mean water ‘which is diffused over the ground from falling rains or melting snows, and [it] continues to be such until it reaches some bed or channel in which water is accustomed to flow.’ ” Tex. Woman’s Univ. v. The Methodist Hospital, 221 S.W.3d 267, 277 (Tex.App.—Houston [1st Dist.] 2006, no pet.) (emphasis added). Diffuse surface water is distinct from flood waters and from waters entering or following a defined course or channel. Id. at 278.

Waters entering or following a defined course or channel are not considered diffuse surface water. This includes water in a ditch, a pond, a pipe, or a river. Id.

“Thus, a landowner might divert the entire Brazos River across his neighbor’s property without subjecting himself to liability under Section 11.086 of the Water Code.” Dietrich v. Goodman, 123 S.W.3d 413, 419 (Tex.App.—Houston [14th Dist.] 2003, no pet.).

Of course, this wouldn’t necessarily absolve this person from liability under other Texas law.

The Water Code is not the only legal authority governing flooding situations.

In our Law 101 posts, we define terms, phrases, or concepts with the goal of conveying core information in order to set the stage for more complex discussions.

No Statutory Warranties for Most Texas Residential Construction

Warranties may benefit parties by providing the maker goodwill and the recipient some independent assurance that the promisor will stand behind the good or service it provided.

texas new home construction warranties

Except for contracts for new Texas homes signed June 1, 2005 – August 31, 2009, there are no state statutory warranties or state statutory  performance standards that always apply to the construction of new homes in Texas. This is due to the sunset of the Texas Residential Construction Commission Act on September 1, 2009.

Therefore, any warranties that exist on new home construction arise, if at all, from the (1) contract and dealings between the homeowner and the home builder; and (2) common law.

In our Law 101 posts, we define terms, phrases, or concepts with the goal of conveying core information in order to set the stage for more complex discussions.

Joint Checks on Construction Projects

joint check texas construction project lawWhat are joint checks? How are they used on construction projects? Are they a perfect solution?

A joint check is a check made payable to two or more payees in the conjunctive, e.g. “Jane Doe Masonry, Inc. and Good Brick, Inc.” A financial institution should only honor the check if both payees have correctly endorsed it.

A joint check may provide the parties on a construction project an additional level of security. For example, an owner may issue a joint check payable to both the general contractor and the subcontractor. By endorsing this check, both the general contractor and subcontractor will be admitting receipt of payment: the general contractor from the owner, and the subcontractor from the general contractor. By virtue of this fact, the owner has some assurance that the general contractor has paid the subcontractor at least some portion of what the subcontractor is properly owed. Furthermore, the subcontractor will know when and how much the general contractor has been paid.

Joint checks are not foolproof. People and financial institutions can intentionally or carelessly circumvent the security joint checks may offer.

In our Law 101 posts, we define terms, phrases, or concepts with the goal of conveying core information in order to set the stage for more complex discussions.

Will a New Texas Lease Law Help Mitigate Human Trafficking?

texas commercial lease termination prostitution human traffickingA landlord who reasonably believes that a tenant operating under a commercial lease is using the premises, or allowing the premises to be used, for prostitution, the promotion of prostitution, compelling prostitution, or for human trafficking may file suit to obtain possession of the premises and unpaid rent.

The landlord in such a situation does not have to give (1) notice of proposed eviction or notice of termination before giving the required notice to vacate; or (2) more than three days’ notice to vacate before filing suit.

Texas already allows termination of a commercial or residential lease based upon a public indecency conviction. But now in some situations a landlord may obtain possession of commercial premises based on belief and without a criminally adjudicated determination or finding.

This new law, codified in Texas Property Code section 93.013, applies to all commercial leases entered into or renewed after August 31, 2017.

It does not apply to residential leases.

Are Construction Contracts Enforceable if Not in Writing?

The major players in the construction realm do not, as a general proposition, routinely rely upon oral contracts on complex projects because of the number of issues, parties, and stakes that are usually involved. On the other hand, some projects may be so small or simple (or any number of other reasons may exist) that they may not be perceived to warrant the time and effort required to prepare a written contract.

Regardless, are oral construction contracts enforceable?texas oral verbal construction contract statute of frauds

In Texas, oral construction contracts generally are enforceable. However, they are not enforceable if they fall into or constitute any one of several categories under the Texas Business & Commerce Code including, but not limited to (1) a contract involving the transfer of certain interests in real estate; or (2) an agreement which isn’t to be performed within one year from the date of making the agreement.

Verbal construction contracts may make sense and be relied upon in some situations. In other contexts, they should be avoided — not only because they may not be enforceable, but because there could be other consequences, too, which are not discussed here.

But the fact that an agreement has construction as its subject matter does not in and of itself dictate whether it is enforceable if it is not in writing.