Law 101 Series

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.

Change in Foreclosure Sale Dates

Texas public foreclosure auctionPublic foreclosure sales in Texas currently take place on the first Tuesday of the month.

Under a new law effective September 2017, foreclosure auctions in the months of January and July will instead occur on the first Wednesday of those months if the first Tuesday falls on January 1 or July 4.

All public foreclosure sales must take place between 10:00 a.m. and 4:00 p.m.

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.

Mineral Interest Liens in Three Sentences

texas oil gas water mineral interest lienA person who furnishes labor or materials in connection with digging, drilling, operating, maintaining, completing, or repairing an oil, gas, or water well, or an oil or gas pipeline, mine, or quarry, is granted a lien to secure payment.

The lien is asserted by timely filing a proper affidavit in the records of the appropriate county clerk’s office.

The claimant must foreclose the lien by filing suit, if the claim isn’t otherwise paid.

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.

Writs of Possession in Three Sentences

A writ is a written court order that commands the person to whom it is directed to perform, or refrain from performing, a specified act.

texas writ of possession

A writ of possession is a command often directed to a peace officer to remove people or items from property, or to dispossess people of property, and to deliver possession to another person.

Writs of possession may be issued in eviction cases, trespass to try title lawsuits, eminent domain actions, and other legal proceedings.

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.

What is Strict Foreclosure?

texas foreclosureIn Texas, realty foreclosures can occur with or without using the court system, depending on the circumstances. The former is called a judicial foreclosure. The latter, unsurprisingly, is called a non-judicial foreclosure. In either event, there is a sale of the property as part of the foreclosure process at which qualified bidders, including the lender, can bid to purchase the property.

In a strict foreclosure, there is no sale. Instead, a court orders the debtor to pay the lender money owed, and title to the realty vests directly in the lender if the debtor fails to do so.

Texas law does not permit strict foreclosures of real estate.

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.