12 Ways for Homeowners to Keep Contractors, Builders & Remodelers Honest

There are presently thousands of complaints by homeowners against contractors, builders and remodelers in Texas. While many of these disputes will be resolved through the Texas Residential Construction Commission, hunderds will end-up in Court. Here are 7 suggestions from a Construction Lawyer to make sure that disputes have a chance of being averted:

1. Ensure that your prospective builder or remodeler is registered with the Texas Residential Construction Commission BEFORE hiring him or her. The check is simple, and can be performed online at the TRCC website. Tell him that you will insist that YOUR PROJECT be registered with TRCC.

2. Before hiring a builder, ask for at least 3 recent references from satisfied customers, and follow-up on those references.

3. Make sure that the Residential Construction Contract is Written, and provides specific deadlines, specifications, and payment provisions. The PLANS & SPECIFICATIONS should be attached as an Exhibit to the Contract.

4. Make sure that your builder is in solid financial condition -- ask for a letter of good standing from his or her bank. Many builders, while seemingly well-to-do, are in financial dire straits.

5. Ask for copies of your contractor's "BUILDER's RISK INSURANCE POLICY." If he doesn't have one, insist that he obtain such coverage BEFORE beginning your project.

6. Obtain from the builder a list of all suppliers and subcontractors (including names, telephone numbers and address) who will perform work or supply materials for your residence. You have a right to know who expects to be paid from your project, and who will enter your home.

7. Insist that your construction lender REQUIRES your signature and approval of all draw requests that the builder or remodeler makes against your construction or home improvement loan -- do NOT rely on bank inspectors. No money should be disbursed WITHOUT YOUR WRITTEN APPROVAL.

8. SPEND AS MUCH TIME AS YOU CAN ON THE JOBSITE! Watch the painters paint and the framers frame. Work will be perform3ed more satisfactorily if you are watching, and you can immediately address discrepancies or deviations from the plans.

9. Each time the builder or remodeler takes a draw, DEMAND that he has all suppliers and subcontractors sign PAYMENT AFFIDAVITS AND/OR LIEN RELEASES. You must, at all costs, avoid situations where a builder draws payment for a subcontractor's work, but fails to pay that subcontractor.

10. DO NOT RELEASE THE "RETAINAGE" or "final 10%" of the construction loan proceeds until FINAL CLOSING -- which should take place at a title company. Unless and until you obtain a "COMPLETION AFFIDAVIT," the retainage should not be released.


Following these POINTERS may help you avoid conflicts with your builder or remodeler. If, despite your best efforts, a dispute cannot be resolved, contact Attorney Trey Wilson for assistance in resolving or litigating construction disputes.