Vintage 1957 United States Silver Certificate under Red, White, and Blue American FlagSince arriving in the United States the Coronavirus pandemic has taken a devastating toll on nearly every aspect of our economy. Industries such as construction have faced new hardships and challenges with workplace safety, material and supply chain logistics, labor shortages, communication and business development. As construction firms continue to weather the financial burdens of the economic downturn, the federal government has passed another stimulus bill ripe with infrastructure and construction spending.

In March 2021, President Joe Biden signed the American Rescue Plan Act into law intended to serve as the third federal stimulus package during COVID-19. Included in this new legislation is the appropriation of $3 billion for the development of public facilities, public services, business development, planning, technical assistance, training, and any other assistance to alleviate long-term economic deterioration and sudden and severe economic dislocation due to the pandemic.

So what does this mean for the construction industry? Continue Reading What’s New in the World of Stimulus Relief: A Discussion of American Rescue Plan Act

Two Construction Workers Discussing at construction site

Co-author: Trenton Patterson

It has been months since you have been paid and the general contractor or the owner continues to demand that you perform extra work, perform in changed conditions or work on a compressed timeline with no promise of payment in sight.  At this point you have a decision to make.  Do you continue to perform work and submit claims for the extra work and changed conditions? Or do you suspend work or terminate the contract? Continue Reading To Perform or Not Perform, That is the Question

big bulldozer removing snowThe winter storm that brought snow, freezing temperatures, power outages, frozen water lines and bursting pipes to Texas, shutting down most construction projects in the process, forced many contractors and owners to take a look that their contracts to determine who is responsible for the ensuing delays and the costs to repair any damage. Continue Reading Excusable Delay and Builder’s Risk: A Reminder to Weatherproof Your Contracts

My law partner, David Gair, and I recently wrote a paper regarding the energy-efficient commercial building tax deduction (IRC § 179D).  The upshot is that the Consolidated Appropriations Act of 2021 recently made this deduction permanent.  As discussed in much more detail in the paper, 179D allows for a tax deduction of up to $1.80 per square foot for the design of energy efficient government buildings.

From the paper:

For many years, Congress has held this deduction somewhat hostage by extending it on a year-by-year basis and not permitting construction businesses to properly plan. Now we have some certainty that this deduction will be around for years to come. The potential benefit is very substantial and can allow the economic incentives to work for businesses and governments with very tight budgets. Careful study can yield great results. Beware, however, that the compliance rules are onerous and properly accredited professionals must be employed. Due diligence on the front end will yield great results and avoid IRS entanglements on the back end.

 

Drain pipe with frozen stream of water near brick wall of a cottage outdoors in winterCo-author: Trevor Lawhorn

As evidenced by the unprecedented arctic weather last week and the resulting fallout, emergency construction services are essential. Freezing temperatures, hurricanes, tornadoes and other natural disasters lead to a high demand for remediation and reconstruction services. Contractors are often best positioned to provide the necessary emergency construction services to rebuild businesses, residences and communities. Emergency contractors must always be mindful of certain laws that impact how they conduct business after a disaster. Understandably, Texas has implemented a number of laws to protect disaster victims against predatory or otherwise unsavory business practices. Here are a few essential Texas laws that both owners and contractors must consider when contracting for emergency construction services. Continue Reading Texas Laws Emergency Contractors Must Know

The general prohibition against waiving lien rights under Chapter 53 of the Texas Property Code has been written about extensively, and is well known through the industry.  However, the Construction Trust Fund Act (Ch. 162 of the Texas Property Code) does not contain any such prohibition.  From the Act itself, it is not clear whether construction trust fund rights can be waived or not.  Less than two years ago, the Texas Fourteenth Court of Appeals considered this issue, among several others, in Mesa Southern CWS Acquisition, LP v. Deep Energy Exploration Partners, LLC.  In that case, the Court considered the following provision: Continue Reading Can the Trust Fund Act be Waived?

Close-up Of Yellow Hard Hat Over Rolled Up American Banknote On White Background

Co-author: Tim Fandrey

In these unprecedented times, every bit of revenue is critical to the continued operation of nearly every business operating within the construction industry. Fortunately, there are a myriad of remedies to aide collection efforts. Perhaps the most commonly discussed remedy is the mechanic’s lien provided by Chapter 53 of the Texas Property Code Chapter. Continue Reading Mechanic’s Liens For Design Professionals: A Powerful Payment Collection Tool

When owners file bankruptcy or projects otherwise go south, lien priority often comes to the forefront.  The idea is relatively simple.  Priority is how courts determine which creditors get paid first.  This often pits lenders against M&M lien claimants.  For lenders, their liens typically arise when they record their deeds of trust.  However, for M&M lien claimants, the Texas Property Code has very specific rules that must be followed. Continue Reading Lien Inception

COVID-19 is now interrupting and, in some instances, cancelling contracts across the country.  While the situation is highly fluid, these business disruptions appear likely to continue and perhaps even worsen in the immediate future.  This will significantly affect and perhaps threaten businesses people have worked had to establish.  And it will of course impact employees and their jobs.  Business leaders will have to make tough decisions in the coming weeks and months.  Many of these decisions will touch on important legal issues.  Below are a few legal hot topics addressed by my colleagues at Gray Reed in the past few days: Continue Reading COVID-19 – Legal Impact