Say you just bought your dream property—the one you’ve pictured since you were a kid. You’re thrilled to set down roots, make friends with your neighbors, and maybe update it a little to make it yours. 

Except the next time it rains, you notice the roof leaks. Or you notice that you can’t run the dishwasher and the microwave simultaneously. Or the HVAC system is taking the “Slow Down, Children Playing” sign on your street a little too seriously. 

Repairs are a normal part of homeownership—but when they result from how your home was built rather than how it was maintained, you may find yourself dealing with the Texas Residential Construction Liability Act (RCLA). 

The RCLA is complicated. It practically has prerequisites for its prerequisites. But, if you work with an experienced real estate litigation attorney, you can navigate the RCLA and potentially receive recompense for any residential construction defect. 

What is the RCLA?

The RCLA, enacted in Texas in 2003, provides a structured legal process for homeowners to pursue claims against contractors for defects in the construction of all types of residential buildings. 

The goal of the RCLA is to encourage communication and settlement between the homeowner and the contractor rather than costly litigation battles, which can help all parties save on legal fees. 

The statute of limitations under the RCLA is four years for a breach of contract or warranty and two years for product liability or negligence. However, there are some exceptions. For example, if a defect cannot be noticed before a specific event (e.g., a flooded basement due to heavy rains), the statute of limitations may begin when the discovery is first possible. 

Types of RCLA violations

To understand what falls under the RCLA, let’s define two concepts: construction defects and residential buildings. 

1. What is considered a construction defect under the RCLA?

The RCLA broadly defines the term “construction defect” as:

• A failure of the design, construction, or repair of a home
• Repairs that do not meet warranty standards or cause physical damage to the property 
• An alteration of the design, construction, or repair of a home to meet building and performance standards during the warranty period
• Any physical damage to the home caused by a design, construction, or repair failure

2. What is considered a residential building under the RCLA?

The RCLA applies to buildings that are considered a residence, which include:

• Real property and any improvements to that property, including a single-family home, duplex, or multi-family residence
• A unit within a multi-unit residential structure, like a condominium

Because these definitions are broad, it’s helpful to speak with an attorney experienced in interpreting the statute’s language and the nuances of faulty constructions. With this insight, they can advise you on your options for pursuing litigation. 

What does not fall under the RCLA?

There are several reasons why a contractor may not be held liable for damages to a residential building.

Damages that don’t fall under the RCLA include:

• Normal wear and tear of a property
• Negligence from a party other than the contractor or subcontractor
• Failure to maintain the property
• If official government records that the contractor used for construction or design were false or inaccurate
• If the suit is frivolous, in bad faith, or brought for harassment

How does the RCLA work when you have a potential claim?

A detailed process must be followed before a homeowner can file a lawsuit through the RCLA. 

Under the Act, contractors must be allowed to address defects fairly. So, what does this mean?

Sending a demand letter

First, a homeowner must send a 60-day notice of their intent to file a lawsuit against the contractor under the RCLA. This demand letter gives the contractor time to resolve the dispute and must include the following:

• A description of the construction defects with reasonable background, such as the nature and extent of the issue, the location, and the impact of the defect on the property
• Supporting evidence, such as photos, videos, professional assessments, and inspection reports

The demand letter is then sent via Certified Mail to provide a legal record of when the letter was sent and received.  

Potential contractor responses

Contractors can request up to three instructions to assess the defects alleged in the demand letter. Once they receive the demand letter, they have 35 days to make a written settlement offer, including their proposal for repair, replacement, or monetary compensation. 

Homeowners then have 25 days to accept or reject the settlement offer, at which point the contractor has 10 days to make a new offer. 

Then, the homeowner may reject the offer and file a lawsuit. 

The RCLA and good-faith settlements

Fun fact: the term “reasonable” is used 31 times in the RCLA. 

The RCLA emphasizes fair dealings between homeowners and contractors and encourages good-faith settlement offers. 

The RCLA allows homeowners to recover:

• Reasonable costs necessary for repair of construction defects and damage to personal property caused by that defect
• Reasonable consulting fees
• Reasonable temporary housing costs during the repair period
• Reasonable legal fees

Notice a trend?

The bottom line is that the RCLA is designed to help homeowners and contractors reach reasonable settlements, which is important to remember as you go through the process.

Recoverable damages under RCLA

While RCLA is designed to keep parties out of the courtroom, there are some situations in which litigation is ultimately required to resolve a matter. If a claim moves to litigation, working closely with an experienced attorney is key to putting together the best case to recover damages. 

Homeowners may be entitled to recover damages such as: 

• Reasonable costs for necessary repairs
• Expenses for replacement or repair of damaged goods in the residence
• Reduction in current market value after repair of structural failure defects
• Necessary engineering and consulting fees
• Reasonable temporary housing expenses during repairs
• Reasonable attorney’s fees

However, RCLA may limit certain types of damages, such as exemplary damages, unless specific conditions are met. 

Finding the right Texas RCLA attorney

The RCLA has strict timeline requirements that must be followed if a homeowner wants to receive damages from a contractor. 

With various assessors and inspections required to pursue damages, working with an experienced real estate attorney who can help you navigate the RCLA process and its various time constraints is critical. Contact our offices today to learn what an experienced Texas real estate litigation attorney can do for you.