What Central Texas Construction Businesses Can Do to Protect Payments in the Face of Inclement Weather

By Lori J. Drake, CBA

Texas has certainly seen its fair share of unprecedented weather this year: In February, historic multi day winter storm Uri brought statewide snowfall, below freezing temperatures, and 3 million power outages ravaged the state — even killing over 150 citizens.

Months later, there is still significant social, political, and financial fallout over the disaster. One industry hit especially hard amidst all of this has been the construction business, with the storm estimated to have generated somewhere between $10-20 billion in insurance losses.

Here are some tips on what Central Texan contractors can do to secure their proper payments as they navigate the post-snowstorm landscape.

Anticipate construction defect claims, and how to react

With Uri forcing all projects earlier this year to shut down as high winds and record snowfall battered the entirety of the Lone Star State, damages to unfinished projects after the ice melted were to be expected.

If for any reason you believe an element of the storm significantly hindered the integrity of a project that has now been completed, be proactively wary of the possibility of facing a construction defect claim.

Whether currently embattled or seeking to avoid one entirely amidst a delayed project, contractors can better protect themselves from facing a defect claim by reviewing the project’s contract terms and policy coverages and be certain that all stakeholders are assigned accountability for their own work.

Ultimately, the most important tip for readying yourself against defect claims is to be transparent and thorough. Mistakes do occur, and if spotted, it’s essential to perform a walk-through and communicate well.

Make weather delay claims

As mentioned earlier, many projects in Texas were halted in the middle of Uri and are still to be completed. While weather delay claims in construction are common, a landmark event such as this is bound to exceed most state contracts’ “reasonable anticipation” principle.

While simply claiming that Uri’s unprecedented intensity and longevity compared to other Texas storms of the past seems foolproof enough to gain a warranted time extension, it’s important to remember to meticulously document the weather’s impact on the project daily — ideally, complete with as many details as possible with photographs.

When the wait is too long, file a lien

Even with every precaution taken, the lengthy process of receiving payment in construction remains.

One option to expedite this is filing a mechanics lien, a strategy that attaches a legal notice to the property that work was performed on instead of the parties withholding payment. Doing so essentially places a notice on the property that makes future dealings like a sale more difficult until the claim is paid.

Time is of the essence here: Get ahead of the curve and find a way to place your name at the top of a payment list, as the Electric Reliability Council of Texas (ERCOT) is siphoning money from energy companies as their largest creditor.