How to Handle Damage Caused by a Contractor in Texas

No one ever expects a contractor to damage their home, but it happens more often than you might think. If you’re in Texas and your contractor abandons the job, leaves without finishing, or causes any other kind of damage, don’t worry – there is a process for how to handle damage caused by a contractor in Texas. We’ll walk you through each step of the process so that you can get your home back to normal as quickly as possible.

How to Handle Damage Caused By Contractor

Let’s say you hired a licensed contractor to build a home, hired out a home renovation project, or had a contractor work on a leaking roof, but the project did not turn out well. At that point, you want someone to pay for your damaged property.

When a contractor does a poor job on a home improvement project or construction project, you’re stuck wondering who will cover their poor workmanship.

Your first step to resolve the issue is to ask for repairs for construction defects according to Texas Law in Ch 27 of the Residential Construction Liability Code. Often this can bring a quick and civil resolution to the problem. 

If you remain calm and discuss the contractor’s work and what the contractor damaged, they will often negotiate a repair or payment to cover poor workmanship.

A construction defect is a matter in which you have a complaint against a contractor concerning:

• Design
• Construction
• Repair of a new residence
• Alteration of or repair or addition to an existing residence
• Appurtenance to a residence

However, if going through the Ch 27 steps to negotiate with your contractor does not work, or your contractor denies responsibility, you might try to file a claim with the contractor’s insurance company agent.

Work with an experienced real estate attorney to better understand whether the company carries insurance and what its policy covers. You can also contact the Better Business Bureau to give others a heads-up.

Contractor Damages and Commercial Insurance Claims

A licensed professional contractor or commercial construction business in Texas carries contractors’ general liability insurance. Their insurance carrier may cover any property damage caused by a licensed contractor or subcontractor. 

However, a contractor’s insurance company does not generally cover the cost of restoring your home to what it was before the work. But if you have property damage caused by shoddy work, it’s worth looking into the insurance claims process.

In the case Ewing Constr. Co. v. Amerisure Ins. Co., the Texas Supreme Court held the contractual agreement of a general contractor to merely perform its construction work in a good and workmanlike manner. But they did not draw any more conclusions about what “a good and workmanlike” manner is.

So insurance may pay for poor craftsmanship and cover a contractor for damages because of his faulty workmanship as long as none of the policy’s other exclusions operate to prevent coverage. (1)

Insurance Company Policy Tactics

Every insurance policy is different. And contractors do not often read the fine print and modifications that insurance companies make to protect their bottom line. 

Your coverage as a homeowner is “only as solid as the financial capabilities (insurance) of the general contractor.” (2)

Even if your independent contractor has coverage, their coverage limits may not fully cover damage to your property. In the case that insurance won’t cover the problems, you can seek reimbursement from the general contractor or contact an experienced real estate attorney to find a better option!

When to Sue a Contractor

Suppose the insurance company and the general contractors will not cover damages to your property. In that case, you can pay out of your own pocket, sue in small claims court, or hire legal representation to help you file a civil lawsuit against the construction company.

Ch 27 of the Texas property code allows homeowners to sue builders for breach of contract or warranty, but only after working through the steps in the Texas Residential Construction Liability Act.

It’s also important to note when a contractor is not responsible for damages.

When the Contractor is Not Responsible

If you are looking to recover damages from a construction defect, a contractor is not liable for any damages caused by:

• Negligence of someone other than the contractor (or an agent, employee, or subcontractor of the contractor)
• Failure of someone (other than the contractor or an agent, employee, or subcontractor of the contractor) to take reasonable action to mitigate the damages and maintain the residence
• Normal wear, tear, or deterioration
• Normal shrinkage due to drying or settlement of construction components within the tolerance of building standards
• Contractor’s reliance on written information obtained from official government records relating to the construction job, if the written information was false or inaccurate and the contractor didn’t know (and could not reasonably have known) (3)

And the contractor is also not liable for any damages if you fail to:

• Go through the steps in Ch 27 to provide the contractor with the written notice and opportunity to inspect and offer to repair
• Fail to request a state-sponsored inspection and dispute resolution under Chapter 428, if applicable, before performing repairs

You may wonder if your own homeowners insurance policy will cover damages. Let’s look at that possibility now.

Homeowners Insurance Claim

Accidental damage caused by alterations, repairs, maintenance, restoration, dismantling, or renovating is generally not covered under your homeowners policy. So before hiring someone to work on your house, ensure that their liability insurance covers accidentally damaged property.

Ask for a copy of their liability insurance policy. Show it to your real estate attorney to determine if their coverage is sufficient for your project.

Ensure that your real estate attorney “carefully reviews their commercial general liability policy to ensure… that the implemented subcontract agreements are drafted to ensure the subcontractors obtain commercial general liability policies that include broad form, unmodified definitions of “insured contract” to avoid any uninsured indemnity obligations.”(4)

Tips to Hire a Contractor

The best policy to prevent headaches associated with accident coverage, contractors insurance, and home insurance is to check out who you hire extensively. 

Tips to ensure a reputable contractor include:

• Looking at if they are members of an official trade association
• Contractor’s reputation online overall and also in reviews
• Professional background check

Finding the right contractor is possible! Just make sure to do your due diligence before hiring. And if you have unresolved problems, contact an experienced real estate attorney for solutions!

We Can Help You Find Solutions to Contractor Damage Woes

At Jarrett Law, an experienced attorney in the field of real estate can walk you through possible next steps and help you negotiate with contractors, insurance companies, or other attorneys. 

We have experience with residential and commercial construction law, so we know how to help you protect your rights and get the best outcome for your case. Contact us today for a free consultation and find out how we can help you!