Law Overview

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.

Is Time Always of the Essence in Construction Contracts?

Whether it’s the construction of a new shopping center or a new home, many people assume that a construction time of the essence construction contractproject will be completed by a particular date. For example, the owner of that shopping center may anticipate a date that he/she needs to have the space finished in order to market it and thereby obtain a stream of income to defray his/her expenses. The owner of that home-under-construction may be without shelter if the home isn’t built timely.

Questions often arise around whether a project, or benchmarks leading up to the completion of the project, must be completed within a specific timeframe. Does the construction contract state an explicit completion date? Does it define what exactly constitutes completion? Does it express that time is of the essence? What if the contract attaches a proposed schedule but has no other reference to a completion date? What if that schedule was only an estimate but the owner of the project nevertheless relied upon its accuracy in agreeing to hire the contractor, investing in the shopping center, or selling his/her old home?

In Texas, time isn’t ordinarily of the essence in construction contracts. Moreover, a stated date for performance does not imply or mean that time is of the essence. The contract must expressly make time of the essence or there must be something in the nature or purpose of the contract and the circumstances surrounding it making it apparent that the parties intended that time be of the essence. Otherwise, the contract must be performed within a reasonable amount of time. And a judge, jury, or arbitrator may have to determine what “reasonable” means.

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.

 

 

Mortgage Loan Workouts

texas mortgage foreclosure alternativesLenders and borrowers often prefer to avoid foreclosures. Short sales and deeds in lieu of foreclosure are two methods that may be employed to accomplish this objective. Workouts are a third option.

A major premise of a workout is that institutional lenders would rather receive loan repayments than engage in foreclosure and/or litigation proceedings.

A workout is just that — the lender and the borrower work out an agreeable alternative to foreclosure. Upon request of the defaulting debtor, the lender may be willing to reasonably accommodate the debtor. This accommodation can take many forms including, but not limited to, temporarily suspending mortgage payments, waiving accrued costs, fees, or penalties, or extending the loan’s repayment period.

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.

Risk of Unknown Site Conditions on Construction Projects

Sometimes parties to a construction contract encounter conditions on the site that were unknown at the time they entered into their contract. Who bears the risk and expense of dealing with those conditions?texas construction unknown differing unforeseen site conditions

The general rule in Texas: a contractor who is paid on a lump-sum basis is not entitled to additional payment because differing site conditions are encountered and must be addressed.

Exceptions to the general rule may arise where there was fraud or mutual mistake, or the parties expressly agreed in their contract how to allocate such risk and expense.

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 involved and complex discussions.

Mold Regulations for Texas Properties in Three Sentences

texas mold law regulationsTitle 25, Part 1, Chapter 295, Subchapter J of the Texas Administrative Code sets forth rules for assessing and remedying mold in Texas properties.

This subchapter delineates the qualifications for, and licensure of, mold-related professionals, provides a framework of mold assessment, remediation, and post-remediation standards and protocols, and contains penalties for non-compliance.

The recovery of damages for personal injury caused by mold is not addressed by these regulations, but is addressed by other 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.

Deed in Lieu of Foreclosure

texas foreclosure alternatives deed in lieu of foreclosureSometimes a borrower who pledges collateral for a mortgage loan cannot meet the loan repayment obligation. Unless the parties reach another agreement, the lender will often foreclose on the collateral in an effort to satisfy the loan and may sometimes pursue additional legal action against the debtor for any deficiency that remains after the foreclosure sale.

One agreement to avoid a foreclosure is a short sale.

Acceptance of a deed in lieu of foreclosure is another alternative to legal foreclosure. Under this scenario, a lender accepts the deed to the collateral securing the loan (the mortgaged property) in full satisfaction of the underlying debt.

A deed in lieu of foreclosure arrangement theoretically allows both lender and borrower to avoid additional expenses, public exposure, and other intentional and unintentional consequences of foreclosure 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.

Integrated Project Delivery System in Three Sentences

According to The American Institute of Architects, integrated project delivery is:

  • a project delivery approach that integrates people, systems, business structures and practices into a process that collaboratively harnesses the talents and insights of all participants to optimize project results, increase value to the owner, reduce waste, and maximize efficiency through all phases of design, fabrication, and construction.
  • distinguished by a contractual arrangement among a minimum of owner, constructor and design professional that aligns business interests of all parties.
  • characterized by key participants being bound together as equals, shared financial risk and reward based on project outcome, liability waivers between key participants, fiscal transparency between key participants, early involvement of key participants, jointly developed project target criteria, and collaborative decision-making.

texas construction integrated project delivery system

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.