Canterbury Attorneys Publish Article in Headnotes on the Residential Construction Liability Act
Canterbury, PC is pleased to share that Brad W. Gaswirth and DaNae Couch authored the article, "Who Is a 'Contractor' Under the Residential Construction Liability Act?", published in the August 2026 edition of Headnotes, the official magazine of the Dallas Bar Association.
In their article Mr. Gaswirth and Ms. Couch examine the Residential Construction Liability Act's (RCLA) statutory definition of "contractor," discuss the impact of the Legislature's 2003 amendments, and explore how Texas courts have addressed potential personal liability for owners, officers, directors, shareholders, partners, and employees involved in residential construction projects.
Originally published in Headnotes, August 2026.
Who Is a “Contractor” Under the RCLA?
By Brad Gaswirth and DaNae Couch
Homeowners who sue over construction usually name the general contractor as the primary defendant. However, the Residential Construction Liability Act’s (RCLA) definition of “contractor” raises questions about whether individual owners and officers can also be included in such lawsuits. This article explores how the term “contractor” is applied in practice and its impact on homeowners who bring claims under the RCLA.
RCLA’s Broad Definition of a Contractor
The Texas Legislature enacted the Residential Construction Liability Act in 1989 to balance the interests of residential contractors and homeowners. Codified in Chapter 27 of the Texas Property Code, the statute has been amended six times, with the most significant changes occurring in 2003. That year, the legislature created the Texas Residential Construction Commission (TRCC) to oversee single-family residential construction, register homebuilders, and manage dispute resolution. The definition of “contractor” was expanded in the amendment to include an “owner, officer, director, shareholder, partner, and employee” of the contractor. These changes signaled that individual officers’ protections against corporate liability could be at risk.
Although the TRCC was dissolved in 2009, many of its dispute-resolution mechanisms remain in effect under the RCLA. The definition of “contractor” has not changed since 2003. This leads to a key question in RCLA cases: Can “owner, officer, director, shareholder, partner, and employee” be a responsible party for construction defects based on the amended definition of a contractor? If so, do their corporate protections still apply?
When Individual Principals Face Exposure
Under the RCSLA’s plain language, individual owners and officers can fall within the statute’s scope without the need for veil-piercing or other fraud-based claim that would otherwise give rise to individual liability beyond the corporate veil. However, Texas courts have applied the RCLA in a nuanced manner.
The RCLA expressly does not create a new cause of action; rather, it modifies existing claims. An individual officer’s personal liability depends on whether they qualify as a “contractor” and whether their actions support the underlying claim , such as breach of contract, negligence, fraud, or violations of the Deceptive Trade Practices Act. Plaintiffs may sue an individual officer or owner under the RCLA in three ways: (1) if the individual personally contracted with the homeowner or performed the work; (2) if the individual personally participated in the defective work or misrepresentation; or (3) through alter ego or veil-piercing theories, where the court disregards the corporate shield. In all cases, the homeowner must provide timely notice of the defect, otherwise the contractor is not liable for damages as specified in § 27.003(2)(B)(iii).
Practical Implications
No controlling Texas law holds an individual officer personally liable for defects caused by an employee. Trial court decisions imposing individual liability have been reversed on appeal. When individual owners and officers were found liable, it was due to their own, personal actions, not those of other employees.
For defense counsel, it is essential to prevent individual principals, officers, and shareholders from being exposed to liability by clearly distinguishing personal and corporate roles during contract negotiations with homeowners. Ultimately, liability depends on who contracted for repairs, who performed the work, and who represented the company and its promises throughout the project.
Conclusion
Because the RCLA defines “contractor” broadly, it may include more than just the company named on the invoice. Counsel for individual officers, principals, and shareholders should carefully assess the risks of direct contracts with homeowner or making representations about construction. It is important to ensure that actions taken during construction and in communications do not unintentionally create personal liability.
-Brad Gaswirth and DaNae Couch are Shareholders at Canterbury, PC and can be reached at bgaswrith@canterburylaw.com and dcouch@canterburylaw.com respectively.