Month: April 2016

Construction Loan Financing in Three Sentences

texas construction loan financingA great number of project owners/developers fund construction projects by obtaining construction loans. A construction mortgage loan (a.k.a. an interim loan) is a short-term loan used to build the improvements on the land. Often, once the improvements are complete, owners/developers utilize a prearranged, long-term permanent mortgage loan (a.k.a. final loan) to finance the entire project, which includes retiring the construction mortgage loan.

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.

Prompt Payment to Contractors on Private Projects

Texas law generally requires the owner of a private construction, improvement, or demolition project to promptly pay the contractor for the contractor’s work. Specifically, upon receipt of a written payment request from the contractor for an amount owed under the contract for properly performed work (or suitably stored or specially fabricated materials), the owner must pay the amount to the contractor, less any amount withheld as authorized by statute, not later than the 35th day after the date the owner receives the request.texas prompt payment act

However, an exception to timely and full payment arises when a good faith dispute exists concerning the amount owed for a payment requested, including whether the work was performed in a proper manner. In this situation, the amount that may be withheld from payment is statutorily prescribed and varies based on the type of project at issue.

Disagreements frequently arise as to whether work was properly performed and whether, therefore, a contractor is entitled to prompt payment, in whole or in part.

A contractor may have the right to claim additional interest, suspend work, and bring suit under the Prompt Payment Act to enforce payment.

A party to a lawsuit under the Prompt Payment Act may ask to recover from the opposing party its reasonable, equitable, and just legal fees.

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.

Texas Engineering Disciplines

Texas construction engineering disciplines branchesWhat’s the deal with all the different types of engineers?

Engineering is a complex field. The Texas Board of Professional Engineers (the “Board”) is tasked with licensing and regulating the field. Currently, Texas does not license by discipline. Instead, all engineers have a blanket “Professional Engineer” license. This isn’t true in all states.

Although Texas provides only a blanket license, many engineers specialize and must become and remain competent in those particular disciplines in which they choose to practice. What are the disciplines? The Board presently recognizes the following:

  1. Aeronautical
  2. Agricultural
  3. Architectural
  4. Biomedical
  5. Ceramic
  6. Chemical
  7. Civil
  8. Control Systems
  9. Electrical, Electronic, Computer, or Communications
  10. Engineering Sciences/General
  11. Environmental
  12. Fire Protection
  13. Geological
  14. Industrial
  15. Manufacturing
  16. Mechanical
  17. Metallurgical
  18. Mining/Mineral
  19. Naval Architecture/Marine Engineering
  20. Nuclear
  21. Ocean
  22. Petroleum
  23. Sanitary
  24. Software
  25. Structural
  26. Textile
  27. “Other”

If it doesn’t fall under “other,” I would personally add “locomotive.”

We’ll discuss these disciplines in more detail in future posts.

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.