Thursday, December 15, 2016

Liens on a Homestead

Liens on a Homestead
By Linda White, Associate Attorney at The Cromeens Law Firm, PLLC

In my experience with residential contractors and subcontractors, I have found that the pervasive beliefs of those contractors regarding their ability to file a mechanic’s and materialman’s lien on residential homestead properties falls into two extreme categories: either they believe it is not an option at all or they believe they can lien the homestead property just like any non-homestead property. Neither of these beliefs are representative of the law on liening homestead property.

It is absolutely possible to file a valid mechanic’s and materialman’s lien on homestead property IF the correct legal process for doing so is followed by the original contractor. Unfortunately, for a subcontractor, whether or not it may place a lien on a homestead property is dependent on whether the original contractor complied with the necessary steps allowing a valid lien on the homestead. Protections for homesteads against liens are based on the Texas Constitution and are additionally regulated by the Texas Property Code, both of which set out a number of steps which must be followed to for a mechanic’s and materialman’s lien to be valid on a homestead. Which of those steps an original contractor must follow depends on whether the original contractor is to perform new improvement or whether it will be doing repair or renovation work on existing improvements.

If the original contractor has been hired by the owner to build new improvements, the Texas Constitution requires only that the contract must be in writing.  In addition to that constitutional requirement, the Texas Property Code requires that the contract must set forth the terms of the agreement, must be signed by the owner and the owner’s spouse (if there is a spouse) BEFORE work commences, and must be recorded in the real property records.  Because the contract must be recorded in the real property records, there is an additional requirement that the signatures be notarized, as unsworn documents cannot be filed in the real property records.  When we have residential contractors come to us wishing to assert their lien rights as to a residential homestead property, the lack of notarized signatures is the most common barrier to doing so because this requirement is not specifically enumerated in the statute.

When the original contractor is performing work for the renovation or repair of an existing home, there are additional and far more stringent requirements for perfecting a lien on a residential homestead.  The original contractor and owner and owner’s spouse must sign a written contract providing the terms of their agreement before the work begins and no more than 5 days after the owner has applied for credit to finance the work.  The contract must contain specific language providing that the owner may rescind the contract without penalty within three days after all parties have signed the contract. The contract for the work must be signed by the owner and the owner's spouse at the office of the lender financing the work, at an attorney’s office, or a title company and then filed in the real property records of the county in which the property is located. 

This article is intended as a general educational overview of the subject matter and is not intended to be a comprehensive survey of recent jurisprudence, nor a substitute for legal advice for a specific legal matter. If you have a legal issue, please consult an attorney.

The Cromeens Law Firm, PLLC
8558 Katy Freeway, Suite 116
Houston, TX 77024

Thursday, August 25, 2016

3 Tips to Preparing for Post-Judgment Collections

In the collections process, obtaining a judgment is just half the battle, and only as good as the ability to enforce it. Unfortunately in the State of Texas, debtors enjoy an extensive list of laws that protect them. Often times, even with the assistance of qualified attorneys, there is no guarantee of a payment collection, and furthermore, enforcing judgments can incur additional costs not covered through the judgment. In order to save you time and money, Houston Senior Attorney, Rhonda Allen recommends planning a collections strategy and preparing the following information prior to enlisting the help of an attorney:
  • Research key information: Save your attorney’s time in allowing them to focus on the more important matter of collecting the money you are owed. Gather as much information as you can on the debtor ahead of time and provide this to your attorney, including additional/other known names, bank account information, driver’s license number, any known address and social security number. 
  • Identify assets: Start with the easily accessible assets, such as real property, wages, bank accounts, money paid to a debtor’s business, etc. Going for any of the bigger ticket items, such as the sale of a debtors’ vehicle, house or personal property can be complicated, time consuming and expensive.
  • Set expectations: Even though a judgment was granted in your favor, the court, judges and constables will not always be ready and willing to assist in enforcing it as it tends to be a complicated process at times. If you are going to use constables for assistance, your attorney will be the best choice to get in contact with them and schedule them to visit your debtor.
Many attorneys shy from this area of the law because it requires an aggressive approach, but the lawyers of The Cromeens Law Firm know the appropriate balance of persistence and tenacity to get results in your favor.

With more than 10 years’ experience assisting clients with collection matters, Senior Attorney Rhonda Allen can help you develop a collections strategy unique to your individual situation. Contact us today for a free consultation.

Thursday, June 30, 2016

Identifying and Resolving Ethical Conflicts in Construction

The construction industry is the largest production sector in the U.S., with one out of every 20 people employed within the industry, yet a recent study of those in the field, including engineers, general contractors and subcontractors, found that 63 percent of participants felt the construction industry was “tainted by unethical acts.”

The Cromeens Law Firm, PLLC, employment and ethics lawyer, Christa Boyd, discusses some ethical issues surrounding the industry and a few preventive measures to help you stay in compliance.

Determining Contractor Qualifications

A good way to avoid ethical issues is to weed out questionable contractors in the pre-qualification stage. Often times, you may be unable to determine a contractors’ ethical practice prior to hiring them, but as a rule of thumb, try to minimize your pool of candidates to those who are members of an accredited organization, such as the America Institute of Architects or the Association of General Contractors. Additionally, consider requiring your chosen contractor to be bonded. Bonding refers to the ability of a contractor to get a surety bond to ensure performance in accordance to their contract obligations. If for some reason they are unable to get bonded, it is typically an indicator that the contractor either tends to default or is undercapitalized.

Ethical Issues in Bid Practices

Bid rigging is a form of fraud in which a commercial contract is promised to one party even though for appearance sake, several other parties submit bids as well. Types of bid rigging include bid suppression, cover bidding, bid rotation and kickbacks, among other forms. While bid rigging is a felony offense, it is still rampant in the construction industry. To help prevent this issue, consider casting a wider net and invite several qualified contractors or subcontractors from various areas to participate in bid selections. Train your staff to maintain accurate procurement records to track bids and be on the lookout for warning signs that good recordkeeping can reveal.

Bid shopping is the practice of divulging general contractors’ and subcontractors’ bids to their competitors in an attempt to pressure other contractors’ and subcontractors’ to submit even lower bids. While bid shopping is seen as unethical in the construction industry, it is not illegal and unfortunately there are few measure you can take to protect yourself from this practice.

5 Rules to Implement for Bidding

  1. Talk to more than one supplier
  2. Be objective and implement criteria (share this criteria to all suppliers)
  3. Do not share bid information with other suppliers 
  4. Do not allow anyone with financial or personal interests evaluate bids 
  5. Stick with rules the rules set forth in your solicitation for the bid

Discrimination and Harassment

The most common types of claims in the workplace are those of discrimination and/or harassment. As a business owner, you may not always have time to keep up with all employee matters, but it is important that your staff feels they have someone to take their problems to who does have the time to listen. Designate a trusted employee to oversee employee relations and have them document any claim or issue that comes their way. Treat any incident as a serious matter and take the time to thoroughly investigate any claim. If your company does eventually face a lawsuit, proper documentation of the claim investigation can go a long way to help your case.

As a final tip, the attorneys at The Cromeens Law firm remind you, if you don’t already have an ethics policy in place, be sure to write one and provide a copy for all of your employees. If you do have one in place, take some time to read over it and make sure it is up to date. Any changes or updates should also be communicated to your staff. Written ethics policies give you an added layer of support should you have a claim arise. Additionally, when in doubt, seek out guidance from an experienced employment and ethics attorney. Call The Cromeens Law Firm today for a free consultation.

Tuesday, May 31, 2016

Get Paid With These 5 Collection Tips

No matter what industry you are in, a hinder in cash-flow can put any company in a bind, especially if you are already in a tight spot as it is. Receiving payments for services or materials provided is critical for the success of any business, but there is always the chance that one, or a few, clients are behind on payments or even refusing to pay altogether. 

Unlike the construction industry, many industries do not have tools such as mechanic liens to put pressure on the contractor or owner to remit payment for what is owed, therefore making it much more difficult to collect, and forcing you to explore other avenues to recover a debt.

When a customer or client is skipping out on their payment, a strategic and persistent approach may be required to collect, and sometimes legal action is necessary to ensure you collect what is owed to you. Before the problem occurs, the collection attorneys at The Cromeens Law Firm, PLLC, provide these insightful tips you can implement to ease the collection process.
  1. Prepare yourself ahead of time. Do you know what type of history and relationship your company has with the client? Is collection a reoccurring issue with them, if so, how have you handled it in the past? Knowing the type of relationship you have with the client helps you determine what steps will be most effective in collect on the debt owed.
  2. Be conscious of timing. Chances are that once you have submitted an invoice to be paid, you have also designated a deadline as to when you expect to receive payment. Set a schedule for reminder emails, including an “upcoming payment due” reminder at the half-way point, as well as, a “past due notice” the day after payment was missed. Additionally, keep records of what was sent and the dates as proof in case the matter requires legal action. Your attorneys will ask you to provide copies of these letters or emails should you require legal assistance in collecting.
  3. Consider rewarding early payments and loyal clients. Most business owners are always on the lookout for ways to cut costs. Offering a discount for early payments or rewarding long-time customers who always pay on time could be incentive enough to prompt payment.
  4. Make the payment process simple and convenient. Consider accepting credit cards as forms of payment in addition to cash and checks, and offer an online payment option so your clients have the convenience of making payments without even leaving their desk.
  5. Take action on late payments early on. The longer you wait on a past due invoice, the less likely you are to collect. Follow up with the client as soon as the invoice has reached its deadline. A gentle reminder call or email informing them a payment is now past due will often times be enough for them to take action. 
Once you have exhausted your options and it has become clear that the situation is out of your hands, enlisting the help of a professional collection attorney is your next step. In choosing an attorney, a strong willed and tenacious lawyer is what you need to get the job done. As debt collection attorneys, The Cromeens Law Firm can effectively protect the rights of creditors in all industries. We know what is at stake for you, and we implement an aggressive, firm approach with the party that is refusing to pay.

Our high-quality service is why many businesses seek out our support for collections and to represent them in court on future matters. If you have outstanding debts owed to you, give us a call today to keep your cash-flow on track and business moving forward.

Tuesday, May 3, 2016

4 Common Pitfalls to Consider When Filing Your Flood Claims

The recent flooding in the Houston Metropolitan area resulting from nearly 15 inches of rain in a 10-hour period caused the city to come to a standstill. With the water beginning to recede, it also begins to uncover the damage to homes, buildings, highways and construction projects in the area. If you are one of the many Houstonians affected by the floods, you may be in the process of working with your insurance company to file a claim, but are having difficulties understanding the logistics of your plan. 

The Cromeens Law Firm, PLLC, Senior Counsel and insurance coverage expert Janet Giessel Townsley, J.D., provides these four pitfalls to be on the lookout for while navigating through the complications of filing a claim:

  • Limitations to your policy – Simply having your standard homeowners, renters or auto insurance does not guarantee that you are covered for flood damages. Even with flood insurance, your policy may only cover direct physical loss, and not replacement costs or other losses.
  • Flood loss deductibles – Do you know which deductibles and limits will apply in a flood occurrence? While your automobile deductible can be straightforward, flood insurance deductibles have options for your structure and a different option for your possessions. Have you chosen yours wisely? 
  • Requirement misunderstandings – Often times, a business owner renting a commercial space is under the impression they are covered through the policy of the property owner; even if you are renting a commercial space, flood insurance is still required under the name of your business. 
  • Failure to seek out professional assistance – It’s easy for business and home owners to get caught up in the technical insurance verbiage within their policy and not fully understand what they are reading, therefore, missing an opportunity to file a claim. Seeking out the assistance of a knowledgeable professional can help you understand your coverage and get the assistance you are entitled to.
With most insurance cases, the damage and liability is evaluated on a case-by-case basis, and since insurance policies can be difficult to understand, you should contact an experienced insurance lawyer to help you better analyze your policy.

If you have suffered a loss of property as a result of the recent flooding, The Cromeens Law Firm can assist you in beginning the clean-up process. Whether it’s home or auto insurance, our insurance attorneys can help you claim the coverage you are entitled to.