RCLA TPC Chapter 27

Question 1

Economic Damages

Answer 1

means compensatory damages for pecuniary loss proximately caused by a construction defect. The term does not include exemplary damages or damages for physical pain and mental anguish, loss of consortium, disfigurement, physical impairment, or loss of companionship and society.

Question 2

What does RCLA Apply to?

Answer 2

(1) any action to recover damages or other relief arising from a construction defect, except a claim for personal injury, survival, or wrongful death or for damage to goods; and
(2) any subsequent purchaser of a residence who files a claim against a contractor.

Question 3

How does RLCA deal with conflicting statutes and common law?

Answer 3

Except as provided by this subsection, to the extent of conflict between this chapter and any other law, including the Deceptive Trade Practices-Consumer Protection Act (Subchapter E, Chapter 17, Business & Commerce Code) or a common law cause of action, this chapter prevails.

Question 4

Under RCLA, a contractor is not liable for any percentage of damages caused by:

Answer 4

(A) negligence of a person other than the contractor or an agent, employee, or subcontractor of the contractor;

(B) failure of a person other than the contractor or an agent, employee, or subcontractor of the contractor to:

(i) take reasonable action to mitigate the damages; or
(ii) take reasonable action to maintain the residence;

(C) normal wear, tear, or deterioration;

(D) normal shrinkage due to drying or settlement of construction components within the tolerance of building standards; or

(E) the contractor’s reliance on written information relating to the residence, appurtenance, or real property on which the residence and appurtenance are affixed that was obtained from official government records, if the written information was false or inaccurate and the contractor did not know and could not reasonably have known of the falsity or inaccuracy of the information

Question 5

Attorneys fees for frivolous suit.

Answer 5

A party who files a suit under this chapter that is groundless and brought in bad faith or for purposes of harassment is liable to the defendant for reasonable and necessary attorney’s fees and court costs.

Question 6

What is the Claimant’s Notice requirements?

Answer 6

before the 60th day preceding the date a claimant seeking from a contractor damages or other relief arising from a construction defect initiates an action, the claimant shall give written notice by certified mail, return receipt requested, to the contractor, at the contractor’s last known address, specifying in reasonable detail the construction defects that are the subject of the complaint.

Question 7

Contractor’s right to request supporting evidence.

Answer 7

On the request of the contractor, the claimant shall provide to the contractor any evidence that depicts the nature and cause of the defect and the nature and extent of repairs necessary to remedy the defect, including expert reports, photographs, and videotapes, if that evidence would be discoverable under Rule 192, Texas Rules of Civil Procedure.

Question 8

Does Contractor have the right to Inspect?

Answer 8

During the 35-day period after the date the contractor receives the notice, and on the contractor’s written request, the contractor shall be given a reasonable opportunity to inspect and have inspected the property that is the subject of the complaint to determine the nature and cause of the defect and the nature and extent of repairs necessary to remedy the defect. The contractor may take reasonable steps to document the defect.

Question 9

Contractor;s Written Offer to Settle

Answer 9

not later than the 45th day after the date the contractor receives the notice under this section, if Subtitle D, Title 16, does not apply, the contractor may make a written offer of settlement to the claimant.

Question 10

How to serve Contractor’s Offer?

Answer 10

The offer must be sent to the claimant at the claimant’s last known address or to the claimant’s attorney by certified mail, return receipt requested.

Question 11

Content of Offer?

Answer 11

The offer may include either an agreement by the contractor to repair or to have repaired by an independent contractor partially or totally at the contractor’s expense or at a reduced rate to the claimant any construction defect described in the notice and shall describe in reasonable detail the kind of repairs which will be made.

Question 12

How time does Contractor have to make repairs after offer accepted?

Answer 12

The repairs shall be made not later than the 45th day after the date the contractor receives written notice of acceptance of the settlement offer, unless completion is delayed by the claimant or by other events beyond the control of the contractor.

Question 13

If a contractor makes a written offer of settlement that the claimant considers to be unreasonable:

Answer 13

(1) on or before the 25th day after the date the claimant receives the offer, the claimant shall advise the contractor in writing and in reasonable detail of the reasons why the claimant considers the offer unreasonable; and
(2) not later than the 10th day after the date the contractor receives notice under Subdivision (1), the contractor may make a supplemental written offer of settlement to the claimant by sending the offer to the claimant or the claimant’s attorney.

Question 14

Is notice required if there is a SOL timing issue or the claim is presented as a counterclaim?

Answer 14

No.

Question 15

Deadlines when suit has been filed?

Answer 15

the inspection provided for by Subsection (a) may be not later than the 75th day after the date of service of the suit, request for arbitration, or counterclaim on the contractor, and the offer provided for by Subsection (b) not later than the 60th day after the date of service, if Subtitle D, Title 16, does not apply.

Question 16

Abatement for not following notice requirements?

Answer 16

An action is automatically abated without the order of the court or tribunal beginning on the 11th day after the date a motion to abate is filed if the motion:

(1) is verified and alleges that the person against whom the action is pending did not receive the written notice required by Subsection (a), the person against whom the action is pending was not given a reasonable opportunity to inspect the property as required by Subsection (a); and
(2) is not controverted by an affidavit filed by the claimant before the 11th day after the date on which the motion to abate is filed.

Question 17

What are the consequences of rejecting a contractor’s offer?

Answer 17

the claimant:

(1) may not recover an amount in excess of:

(A) the fair market value of the contractor’s last offer of settlement under Subsection (b); or

(B) the amount of a reasonable monetary settlement or purchase offer made under Subsection (n); and

(2) may recover only the amount of reasonable and necessary costs and attorney’s fees as prescribed by Rule 1.04, Texas Disciplinary Rules of Professional Conduct, incurred before the offer was rejected or considered rejected.

Question 18

What Damages can a Property Owner Recover?

Answer 18

(1) the reasonable cost of repairs necessary to cure any construction defect;
(2) the reasonable and necessary cost for the replacement or repair of any damaged goods in the residence;
(3) reasonable and necessary engineering and consulting fees;
(4) the reasonable expenses of temporary housing reasonably necessary during the repair period;
(5) the reduction in current market value, if any, after the construction defect is repaired if the construction defect is a structural failure; and
(6) reasonable and necessary attorney’s fees.

Question 19

Constructive Rejection of Offer.

Answer 19

(i) An offer of settlement made under this section that is not accepted before the 25th day after the date the offer is received by the claimant is considered rejected.

Question 20

Who determines whether the offer was reasonable?

Answer 20

The trier of fact shall determine the reasonableness of a final offer of settlement made under this section.

Question 21

Notice of imminent Threat.

Answer 21

a contractor who receives written notice of a construction defect resulting from work performed by the contractor or an agent, employee, or subcontractor of the contractor and creating an imminent threat to the health or safety of the inhabitants of the residence shall take reasonable steps to cure the defect as soon as practicable. If the contractor fails to cure the defect in a reasonable time, the owner of the residence may have the defect cured and may recover from the contractor the reasonable cost of the repairs plus attorney’s fees and costs in addition to any other damages recoverable under any law not inconsistent with the provisions of this chapter.

Question 22

Limitation on Damages when Contractor refuses to make repairs.

Answer 22

If a contractor refuses to initiate repairs under an accepted offer made under this section, the limitations on damages provided for in this section shall not apply.

Question 23

Required Mediation?

Answer 23

If a claimant files suit seeking from a contractor damages arising from a construction defect in an amount greater than $7,500, the claimant or contractor may file a motion to compel mediation of the dispute. The motion must be filed not later than the 90th day after the date the suit is filed.

Question 24

DISCLOSURE STATEMENT REQUIRED.

Answer 24

A written contract subject to this chapter, other than a contract between a developer of a condominium and a contractor for the construction or repair of a residence or appurtenance to a residence in a condominium, must contain in the contract a notice printed or typed in 10-point boldface type or the computer equivalent

Question 25

$500 fine for no notice in contract.

Answer 25

If a contract does not contain the notice required by this section, the claimant may recover from the contractor a civil penalty of $500 in addition to any other remedy provided by this chapter.

Question 26

Does RCLA apply even without notice?

Answer 26

Yes.