26/05/2024
For those who had storm damage last night south of Valley View, I will offer some thoughts on hiring a Contractor.
Part of my practice is in Consumer, Insurance, & Contract Law so if I can be of help, let me know. I would be willing to do a free 15–30-minute consultation to review proposed contracts as my time permits. Do not let someone pressure you into signing a contract before you have a chance to read it. Be aware 90% of the terms on a preprinted form, especially the fine print on the back side, is for the benefit of the Contractor, not for you. I sometimes add an Addendum that overrides unfavorable terms.
Consider using a reputable source to find a reputable contractor. The Good Contractors List | Find Good Contractors Nearby offers a $10,000 warranty if their contractor does not satisfactorily complete the job so that may be a good place to start. I am sure they all have some caveats in that warranty, but it is probably better than a contractor from far away who drove in with their pick-up truck and a magnetic sign. Homeadvisor.com and angi.com may also work although they seem to be paying Google to put their names ahead of the Good Contractor’s list when you do a search which makes me question them a little. Be aware that when you use an online referral service, you will probably be agreeing to their terms and conditions such as binding arbitration or in the case of Home Advisor, they say you have to go to Denver, CO if you file suit, if binding arbitration does not apply.
Make sure you ask questions and get answers you are satisfied with such as when the work will be started & completed, the type & quality of materials, whether they are using employees or contractors, at least three references, where their office is, etc. Check their reviews and complaints on Google, Yelp, and the Better Business Bureau. If they do not have an office and have been in business in DFW for 10+ years, I would think long and hard about hiring them. Ask them to put anything you want in writing, although if they promise something, even if they do not put it in writing, and you can prove it with witnesses, and you RELY on it, it may be actionable under the Deceptive Trade Practices Act. In some cases where the issue is a Construction Defect is at issue, Chapter 27 of the Texas Property Code may trump the DTPA and is more favorable to contractors.
If they ask you to put money down up front, ask them why and what protection there is for you. If they need a reasonable amount for materials and they have a strong reputation, that may be appropriate, if your insurance company has agreed to pay and paid you.
If they ask for more than half up front, they may have few if any financial assets or credit which means even if you sued them and won, you may not get your money back because they do not have any assets to go after. I would strongly recommend that you not pay them more than 50% until the job is done and you are satisfied. Chapter 53 of the Texas Property Code requires the owner to hold back 10% of the project funds for 30 days after the work is done in case a worker or supplier makes a claim against the homeowner for wages or materials used on the job they were unpaid for. Any reputable contractor should be willing to agree to that holdback. Furthermore, if you are dependent on an insurance company paying you more for depreciation, etc., you may want a clause in the contract that does not obligate you to pay the contractor before your insurer pays you and your mortgage company endorses the payment. If the insurance claim is over $40,000, I have seen the mortgage company require you to sign the insurance payment over to them until you show the work is complete via an inspection they order. Only after that will the mortgage company release the funds, so you do not want to be paying 18% interest or worse to your contractor while waiting for the insurer or mortgage company to pay you.
In addition to the Deceptive Trade Practices Act, Texas has a law whereby if they come to your home and you sign a contract in your home, in most cases, you have a three day right of recission. If you are not sure, I would be careful about signing a contract but if you do and you did so in your home, not their office, you may have the three day right of recission although that time can go by fast. By law they should give you documentation regarding that right, but some will not. If you do sign something and want me to review it, get it to me quickly so I can review it before the three days are up.
I would recommend keeping a notebook of who you talked to, full name if you can get it, company name, number you called or they called from, the net of what was said and next steps, etc. I would make sure and do this for the insurance company recognizing that with these storms, they can get over-whelmed. I would recommend taking pictures and videos of the damage, especially before you do any repairs.
