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Texas Construction Law Blog

For Subcontractors & Suppliers

Fighting the Four Horsemen of the Workforce Apocalypse

Posted in Labor/Workforce

Co-author: Michael Kelsheimer
Published in TEXO InFocus Magazine

Since at least 2008, Flood, Fire, Famine and Pestilence have ravaged the construction workforce across America. In the downturn, many workers left the industry never to return. Others left the U.S. and have not returned.  Couple that with construction growth, a resistance to training workers who may leave for another dollar an hour, and seeming lack of interest in construction jobs by the current generation now entering the workforce, and you’ve got the makings of a big challenge.

Protect yourself on the contracting side before heading into the storm . . .

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Establishing Personal Liability Without a Guaranty

Posted in Collection, Construction Contracts

Co-author: Trevor Lawhorn
Published in Build Houston Magazine

When non-payment occurs, suppliers and service providers often first seek relief by suing for breach of contract. Unfortunately, many companies are undercapitalized or otherwise “judgment proof.”  A personal guaranty might mitigate this risk by providing an additional target, but guarantees are often difficult to obtain.  Even if one is signed, the guarantors may lack assets, perhaps deliberately so.  Judgement proof debtors and guarantors are especially frustrating when the case involves misappropriations of construction project funds or wrongful transfers of assets.  Texas law provides at least two statutory tort claims in these circumstances: the Texas Uniform Fraudulent Transfer Act (TUFTA) and the Texas Construction Trust Funds Act (the Trust Fund Statute). Continue Reading

Is Your Construction Business Prepared and Protected for ICE Undocumented Worker Audits?

Posted in Labor/Workforce

Co-author: Michael Kelsheimer
Published on ForConstructionPros.com

Understand and navigate the government’s amplified focus on undocumented workers to protect your business from escalating fines, jail time, delay damages and back-charges

Whatever your political views, undocumented workers and the businesses that knowingly or unknowingly employ them have been under the microscope since President Trump took office in January 2017.

According to U.S. Immigration and Customs Enforcement (ICE), between Oct. 1, 2017, and May 4, 2018, there were:

  • 2,282 employer audits opened, nearly a 60% jump from the 1,360 audits opened between October 2016 and September 2017,
  • 594 employers arrested on criminal immigration charges, up from 139 during the previous fiscal year, and
  • 610 civil immigration charges, compared to 172 in the preceding 12 months

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Section 232 Investigations: What Steel-Consuming Businesses Need to Know

Posted in Steel

In just the first four months of 2018, among a surge in trade complaints filed by domestic steel manufacturers against foreign rivals (a frequency not seen in over 15 years), and after a lengthy investigation by the Secretary of Commerce concluding “that the present quantities and circumstance of steel imports are ‘weakening our internal economy’ and threaten to impair the national security” of the United States, President Trump has issued two presidential proclamations—adjusting the imports of certain steel products by imposing a 25 percent ad valorem tariff (the “Tariffs”) on those steel products from all countries—granted a permanent extension to the Tariffs for South Korea, Argentina, Australia, and Brazil and has extended a final temporary 30 day exemption from the Tariffs to Canada, Mexico and the member countries of the European Union, the United States’ biggest trading partner. Continue Reading

The Storm After the Storm

Posted in Collection, Construction Contracts

Co-authors: Russell Jumper and Tim Fandrey
Published in Cleaning & Restoration Magazine

Just as the Texas coast assessed the magnitude of Hurricane Harvey’s damage, Hurricane Irma was taking shape in the Atlantic. Fewer than two weeks later, Irma would crash into the Florida Keys. Estimates put Harvey and Irma’s combined impact in excess of $275 billion. No small part of that amount will be required for cleaning and restoration services. Before Irma made landfall, even as Harvey hovered over the Houston area, restoration professionals from around the country arrived along the Texas coast to kick-start Texas’ recovery. For the people who lost their homes, possessions, and even family or friends, the focus turned to recovery. For some of the restoration professionals who helped, and continue to help, a second storm is forming: owner and insurer payment disputes. Like boarding up windows and setting out sandbags, there are some steps cleaning and restoration professionals can take in an effort to minimize the damage from the approaching payment dispute storm. Continue Reading

Protecting Yourself in a Volatile Labor Market

Posted in Labor/Workforce

 

Co-authors: JP Vogel and Tim Fandrey
Published in Build Houston Magazine

Texas is a hot-bed for construction. In 2016, according to the Virtual Builders Exchange, Texas was second only to New York in construction expenditures, spending $44.4 billion. And there is no sign that the proliferation of construction is slowing down.  New housing starts are up in Texas as a result of an influx of new employees moving to the area. The U.S. Census Bureau reported that Texas has experienced the largest population growth of any state between 2010 and 2016. This, in turn, increases demand on civil infrastructure thus requiring more construction. This explosion of growth in construction spending has taken place without consideration given to the rebuilding efforts arising from the aftermath of Hurricane Harvey. Continue Reading

A Myth About Delay – Revisited

Posted in Construction Contracts, Delay Damages

Construction lawyers routinely deal with delay claims. I have presented or defended more of them than I can remember.  That is why I was curious when, earlier this year, I received a series of email invitations to presentations on the use of “concurrent delay” as a defense to contractor or owner claims for delay damages on construction projects.  I’ve written about the subject in the past and wondered what, if anything, had changed.

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Softening a Hurricane’s Blow: Force Majeure and Builder’s Risk

Posted in Construction Contracts

 

Co-authors: Russell Jumper and Tim Fandrey

Hurricane Harvey caused severe destruction in Texas with its significant winds and historic rainfall. But Harvey may also prove to be a costly lesson for many project owners and contractors. As Texas begins to focus on recovery in the coming weeks, Harvey will further serve as a reminder to all construction industry stakeholders that hurricanes, and other “acts of God”, are risks that must be effectively managed during the pre-construction and construction phases of every project. While it is difficult to effectively avoid the risks attendant to a highly-destructive, low probability event that occurs on short notice, owners and contractors have two primary tools at their disposal to mitigate the effects of such an event: (i) contractual force majeure provisions; and (ii) builder’s risk insurance. Continue Reading

“Buy American” Law Changes How Texans Buy Iron and Steel

Posted in Construction Legislation

Co-authors: Jeff Leach, Tim Fandrey.
Published in Pipeline Magazine and Build Houston Magazine.

As a result of newly enacted Texas Senate Bill 1289, buying American iron and steel is now a requirement on certain public infrastructure projects in Texas. Promoted by President Trump, passed by the Texas Legislature in May and signed in to law this summer by Governor Greg Abbott, the new law, effective Sept. 1, 2017, requires that iron and steel be purchased from an American supplier unless the American supplier price is more than 20 percent higher than the price of the cheaper foreign importer. Foreign iron and steel may also be used if American suppliers are not prepared to supply a project, or if there is a compelling state interest that warrants the use of a foreign manufacturer’s steel. Continue Reading