What is the Residential Construction Liability Act (RCLA)? How Can It Reduce Your Damages?
Remember the cul-de-sac house you finished last month, the one with the monster roof that took twice as long to lay out? Well, now the homeowner has filed a claim against you under the Residential Construction Liability Act, or RCLA, and you are expected to be in court. What the heck is an RCLA?!
The RCLA is designed to promote settlement, and it is mostly in favor of the property owner. Fortunately, the law contains stipulations that offer relief, and a way to reduce damages, for construction business owners.
In short, RCLA provides a framework for homeowners to bring claims against builders. It acts as a buffer between the actual dispute and expensive litigation by including notice provisions that must be followed prior to the filing of a lawsuit.
The full text of the Residential Construction Liability Act is located in Chapter 27 of the Texas Property Code.
How Does It Apply to You?
Unfortunately, the RCLA has a wide application. RCLA applies to “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.” That’s a pretty broad brush stroke!
So how does one define “construction defect”? And where does your liability come into play?
Texas law defines “construction defect” as “…a matter concerning the design, construction, or repair of a new residence, of an alteration of or repair or addition to an existing residence, or of an appurtenance to a residence, on which a person has a complaint against a contractor. The term may include any physical damage to the residence, any appurtenance, or the real property on which the residence and appurtenance are affixed proximately caused by a construction defect.”
Defenses Against RCLA
Here’s where it gets good for business owners: There are a number of defenses against RCLA claims that prohibit a contractor from being liable for any percentage of damages:
- Negligence of a person other than the contractor or an agent, employee, or subcontractor of the contractor.
- Failure of a person other than the contractor or an agent, employee, or subcontractor of the contractor to mitigate damages or maintain the residence.
- Normal wear, tear, or deterioration.
- Normal shrinkage due to drying or settlement.
- The contractor’s reliance on written information relating to the residence obtained by official government records-if false or inaccurate.
Think one of these applies to your situation? Find out for sure by getting the best legal representation in the construction industry! Here at the Cromeens Law Firm, our legal experts are pros at building a solid defense against RCLA claims, with years of industry experience.
It’s About Time
The law dictates that a homeowner must follow specific notice provisions for their claim to be valid:
- RCLA Letter: Before filing a lawsuit, the homeowner must provide the contractor with 60 days written notice (CMRRR) of the alleged defects.
- Inspection: Within 35 days after the contractor receives the notice letter, a contractor may submit a written request to inspect the property. The inspection provides the contractor with an opportunity “to determine the nature and cause of the defect and the nature and extent of repairs necessary to remedy the defect.” The Homeowner is required to provide a reasonable opportunity for the contractor to inspect the property.
While the notice provisions can work in your favor, there are some exceptions:
- Statute of Limitations: A homeowner does not have to provide notice to the contractor if the homeowner is attempting to prevent the expiration of the statute of limitations.
- Counterclaim: If a contractor initiates a lawsuit against a homeowner, the homeowner may bring his/her defects claims as a counterclaim in the pending action. At that time, the RCLA period for inspection is extended to 75 days after service of the lawsuit.
In Residential Construction Liability Act, Part 2, we will take a closer look at the statute of limitations requirements as well as the offer of settlement and just how much an RCLA can hurt you financially.
Call the Experts
The Cromeens Law Firm provides clients with expert navigation of Texas law and RCLA claims ensuring business owners reduce their liability by having access to the right tools. Contact one of our experienced attorneys today to discuss your options.