Key points
- Your contract, including its notice, change-order, dispute and arbitration provisions, controls most of the dispute. Read it before you act.
- The Prompt Payment Act generally requires owners to pay contractors within 35 days of a proper payment request on private projects, and contractors to pay subcontractors within 7 days of receiving payment.
- Under the Trust Fund Act, misapplying construction funds can create personal liability for the individuals who controlled them.
- Lien and bond rights run on their own deadlines while you negotiate.
Disputes we handle
- Nonpayment and slow payment to contractors, subcontractors and suppliers;
- Change orders and extra work: disputes over scope, pricing and whether written authorization was required;
- Delay and disruption claims, liquidated damages and acceleration;
- Termination for cause or convenience, and wrongful termination claims;
- Defective or incomplete work (see construction defects);
- Diversion of construction funds under the Trust Fund Act;
- Payment bond and performance bond claims; and
- Design and spec disputes involving architects and engineers.
Texas statutes that change the outcome
Prompt Payment Act (Property Code ch. 28)
On private projects, an owner generally must pay a contractor within 35 days after receiving a proper payment request, and a contractor generally must pay subcontractors within 7 days after receiving payment for their work. Unpaid amounts accrue interest at 1.5% per month, and the prevailing party in an action under the Act may recover reasonable attorney’s fees. Good-faith disputes over the amount can justify withholding, but only of the disputed portion and with proper written notice.
Construction Trust Fund Act (Property Code ch. 162)
Payments made under a construction contract for improving specific property are trust funds held for the benefit of the subcontractors, suppliers and workers on that project. A contractor or individual who controls those funds and intentionally or knowingly misapplies them can face civil liability and, in serious cases, criminal liability. This often lets an unpaid subcontractor reach the company’s principals.
Mechanic’s liens and bonds
Your lien rights are often your strongest collection tool, but they expire on fixed deadlines. Public projects use payment bonds under Government Code ch. 2253 instead.
Before you stop work or withhold payment, call us.
Walking off a job or withholding the wrong amount can turn a strong position into a breach. Book a discovery call or call (346) 363-0334.
Arbitration, mediation and litigation
Many construction contracts, especially AIA and ConsensusDocs forms, require mediation before arbitration or litigation, and many require binding arbitration under the American Arbitration Association’s Construction Industry Rules. We evaluate early whether arbitration is mandatory and whether it serves your interests, since it changes cost, speed, discovery and appeal rights. When the case belongs in court, we litigate in the Harris County district courts or the appropriate county where the project is located.
Documentation wins construction cases
We’ll ask for the contract and all amendments, change orders and directives, pay applications and lien waivers, daily logs and photos, schedules, RFIs, and correspondence. If the project is ongoing, we’ll help you create the record now: written notices of delay or changed conditions, reservation-of-rights letters, and properly documented payment withholding.
Who we represent
Owners and developers of commercial, multifamily and residential projects; general contractors; specialty subcontractors such as electrical, mechanical, roofing, concrete and site work; and material suppliers. Our real estate litigation background means we understand how construction disputes affect financing, title and the value of the asset.