Category Archives: General

Tips & Resources for Homeowners Recovering from Hurricane Harvey

There are countless legal issues that will arise in the aftermath of Hurricane Harvey.  This article is aimed at providing some tips and resources specifically for homeowners with property damage requiring repair.  The first few weeks are about cleanup and recovery.  After that time the repairs begin and that is when a lot of homeowners can get into even more trouble.

The unfortunate truth is that a lot of contractors will descend upon areas devastated by natural disasters such as this.  The large volume of repair work needed combined with a lot folks in desperate situations is a breeding ground for fraudulent and criminal activity.  Invariably, fraudulent contractors come in, steal money, and get out before they are ever caught.  The homeowner ends up losing twice – once with the property damage and a second time with the money they thought they paying to have their home repaired.   Those most at risk from these types of predators include the elderly, those with limited English skills, and those with low income.

There is no way to guarantee you won’t fall prey to a bad contractor.  But here are some things you can do to increase your odds.

Tips to Limit the Risk that a Bad Contractor Will Take Advantage of you

  1. Be patient!  It’s tough to do that when your home has been destroyed or suffered significant damage and you just want a safe secure place to live.  But that desperation is exactly what bad contractors are hoping to take advantage of.  So be patient throughout the process – don’t make quick decisions.  Don’t be afraid to sleep on it or take a few days to think about a decision.   Finding the right contractor that will work with you on many of the issues below may take a lot of time but spend that time.  Believe me – you will regret your impatience if it leads to someone taking advantage of you.
  2. Always get multiple estimates.  Never sign an agreement with the first contractor you come across.  There can be significant differences in costs and estimates from one contractor to the next.  Take the time to learn about the range of prices and the differences in the estimates (or contractor’s method of business) that account for those differences in pricing.
  3. Avoid paying the contractor significant money up front.  It is not unreasonable for a contractor to require some form of down payment for supplies and materials when he starts work on your project.  But it also is not necessary.   It is certainly not necessary for the homeowner to put down a large fixed percentage of the total cost up front.  Or worse – pay in full up front.  If you have a contractor demanding you make such a payment – move on.  If you have a contractor pushing you for a down payment so he can “put you on his schedule” – move on.
  4. Always have a written contract for the work.  Never pay money to a contractor without a written agreement signed by both you and the contractor.  The agreement should specifically state the scope of work that the contractor is responsible for performing and the price for that work.  The contract should specify when payment is due – upon completion or periodically.  If periodically, then the contract should set specific bench marks for the contractor to earn each periodic payment.  More detail is better.
  5. Inquire whether the contractor will use employees or subcontractors.  Make sure the answer is stated in the contract.  If the contractor uses subcontractors, you must get lien releases from the subcontractors showing that the subcontractor has been paid in full at the time you make any payments.  If you do not then you risk the subcontractors filing a mechanic’s lien on your home for the work they performed if you pay the contractor and he does not pay the subs.  Make sure your obligation to make any payment is contingent on receiving those releases.  Make sure the subcontractors are licensed, insured, and bonded.
  6. Home Equity Loans.  You may need a loan to repair your property and this is not uncommon.  However, do not allow the contractor to push you into that decision or “recommend” a lender to you.  It is an all too common scam for a contractor to induce a homeowner into securing a home equity loan, then take the loan proceeds and leave with out performing any work.  This leaves the homeowner with a loan payment, a lien on their house, no more equity, and the repairs still need to be done.
  7. Verify the contractor.  This means check his license.  Check his liability insurance.  Check his workman’s compensation insurance.  Check his Better Business Bureau rating.  Is the contractor bonded? Ask for referrals – and contact those people.  Verify the contractor’s address – a lot of contractors will chase storms from out of state.  You are less likely to run into trouble if you work with a local contractor that has a long history of successful services in your area.  If he is using subcontractors, ask for their credentials.
  8. Get a firm start date and time estimate.  Then put it into the contract.  It is not uncommon for the start date to slip a few days or even a week or two.  But address that possibility in the contractor and secure a right to walk away from the contract if the contractor does not begin work on or before a certain date so that you are not stuck waiting.  See #3 above – do not make any payment prior to the date the contractor actually begins work.  Also – get a firm estimate on the time to complete the work.  See #3 above – do not pay your contractor in full before the work is done and you receive all lien releases (see #5).  Do not pay the contractor on anything but the agreed upon schedule under any circumstances.  If you properly addressed the payment schedule in your contract then this will provide you with some protection should the contractor leave mid-job.
  9. Here are some additional miscellaneous red flags.  Contractors soliciting door to door.  Out of state contractors.  Contractors using P.O. Box addresses.  Contractors with no history that you can locate.  Contractors with phone numbers from a non-local area code.  Contractors who cannot or will not address any of the issues above.

Additional Resources for Homeowners Recovering from Hurricane Harvey

Below are links to some additional resources:

  1. State Bar of Texas Disaster Recovery Manual
  2. State Bar of Texas Disaster Relief Page
  3. Federal Emergency Management Agency (FEMA)Hurricane Harvey Page
  4. Office of the Governor Hurricane Page
  5. Office of the Attorney General Consumer Protection
  6. Texas Association of Builders (with more information on choosing a reputable contractor)
  7. City of Houston Disaster Recovery

Texas AG Issues Opinion Requiring County Clerks to Record Affidavits of Adverse Possession

The Texas Attorney General recently issued opinion KP-0165 addressing whether county clerks in Texas are required to accept and file affidavits of adverse possession.  The Opinion concludes that yes, county clerks are required to accept and file affidavits of adverse possession.

The Opinion begins its analysis by noting that county clerks are mandated by law to record any instrument that is required or permitted by law to be recorded.  The Texas Property Code states that an affidavit may be recorded if it is properly acknowledged or sworn to and concerns real property.  An affidavit of adverse possession concerns real property, therefore a properly executed affidavit must be recorded by the county clerk.

However, the Opinion goes on to state that merely filing an affidavit of adverse possession does not thereby create an interest in the property by adverse possession.  The individual or company claiming title by adverse possession must still meet the legal requirements set forth by law.

The Opinion also states that if a county clerk has a reasonable basis to believe in good faith that the affidavit of adverse possession is fraudulent, then the clerk must provide written notice of the filing to the last known address of any person named as owning an interest in the real property.

Texas AG Issues Opinion on When Tree Ordinances Could Result In A Taking of Private Property Rights

The Texas Attorney General recently issued opinion KP-0155 addressing the issue of whether, under certain circumstances, municipal tree preservation ordinances might violate the Takings Clause of the Texas Constitution.

The opinion begins by noting that although there are some differences between the Takings Clause in the Texas Constitution and the Takings Clause in the United States Constitution, the two are similar enough that Texas courts usually refer to opinions interpreting the federal clause when interpreting the Texas clause.

The AG opinion notes that there are two types of takings that may arise.  The first is a per se taking which occurs when a governmental action denies a landowner all economically viable use of the property and focuses its inquiry on determining whether any value remains in the property after the governmental action.  A tree preservation ordinance could theoretically affect an entire parcel of land rendering it valueless and eliminating any possibility of the landowner realizing any economic value from the property.

The more common situation will arise when an ordinance affects one or two trees on a property without rendering the entire parcel of land useless.  The AG Opinion recognizes that a taking may occur if a governmental action imposes a restriction that unreasonably interferes with the landowner’s rights to use and enjoy a property.  Determining whether a taking occurs in this situation requires a fact intensive analysis under the factors set forth in Penn Central Transportation Co. v. New York City 438 U.S. 104 (1978).

In Penn Central, the Supreme Court stated that a use restriction on real property may constitute a taking if not reasonably necessary to the effectuation of a substantial public purpose, or, if it has an unduly harsh impact upon the landowner’s use of the property.  The Penn Central factors used to determine whether a landowner’s rights have been deprived to such an extent that a taking occurs are set forth below:

  1. the economic impact of the regulation on the owner;
  2. the extent to which the regulation interferes with a distinct investment backed expectation of the landowner; and
  3. the character of the governmental action.

The “economic impact” factor focuses on the extent of the diminution in value of the property as a result of the regulation.  The greater the economic loss a landowner suffers as a result of the regulation, the more likely a court would determine a taking occurs.

The second factor focuses on determining the legitimate expectations of the landowner regarding which rights the landowner would have when investing in the property.  If the landowner’s expectations regarding his or her use of the property are limited by the governmental action, then it is more likely to result in a taking.  Under this factor, the focus is on the landowner’s expectations at the time of purchase and whether a later enacted ordinance limits those rights.

The third factor asks whether the regulation is aimed at the broader public good and burdens the public at large or whether the regulation results in a greater burden on the individual landowner.  A court is more likely to find the ordinance results in a taking in the latter situation.

While the AG Opinion is not binding upon a court of law, the analysis provides highly persuasive support for landowners impacted bye local tree preservation ordinances that wish to challenge the impact of those ordinances under the Takings Clause of the Texas Constitution.

Comptroller Announces Texas Taxpayer Bill of Rights

Yesterday the Texas Comptroller of Public Accounts, Glenn Hegar, announced the creation of the Texas Taxpayer Bill of Rights.  These were promulgated as part of his goals to address taxpayer concerns in an efficient and respectful manner.  I’ve listed the short version below, but you can access the Taxpayer Bill of Rights here. You have… Continue Reading

2015 Texas Legislative Update

The 84th Legislature Regular Session began last month.  A number of bills that are of interest to Texas businesses have already been introduced and referred to committee.  Below you can find a brief description of some of the pending bills and the impact they could have should they make it into law.  Be sure to… Continue Reading

Texas Franchise Tax Annual Reports Due May 15th

Don’t forget to file your annual Texas Franchise Tax Annual Report this year.  The due date is coming up on May 15th.  Corporations, limited liability companies, professional corporations, partnerships, trusts, associations, and joint ventures are all subject to the tax and required to file an annual report. You can find information about the Texas Franchise… Continue Reading

Getting Down to Business – Houston with Capital One

Capital One has a great program for small businesses that I wanted to highlight.  If you are interested, then don’t procrastinate as the deadline to apply is coming up on April 1st and there are only 15 slots available. Capital One’s Getting Down to Business program debuted in Houston in 2009.  The program is a… Continue Reading

SBA Releases New Courses on Online Security for Small Businesses

The Press Release is below: Small businesses can help keep their business information safe and protect their online information with a new free course from the U.S. Small Business Administration. In support of President Obama proclaiming October as National Cybersecurity Awareness Month, SBA is launching this new course, designed for small businesses, to provide an… Continue Reading

Intuit’s Small Business Super Bowl Commercial Promotion

In case you missed it, Intuit is running a competition for small businesses in which the winner will receive a professionally produced commercial to run during Super Bowl XLVIII.  You can read about the competition here. I know its a long shot, but hey, who wouldn’t want free advertising to the tune of $4 million… Continue Reading