Hurricane Harvey was the most powerful natural disaster to hit Texas in its history, resulting in billions of dollars in property damage and untold pain and suffering for its victims. Although those impacted by this disaster can never truly be compensated, the Texas Business and Commerce Code provides protection for persons and companies working with disaster remediation contractors to try and reassemble their lives.
Texas Business and Commerce Code Section 58.003 requires that any contract subject to Chapter 58 be in writing. Further, a disaster remediation contractor (1) cannot require a person to make a full or partial payment before the contractor begins work; and (2) cannot require that partial payment exceed an amount reasonably proportionate to the work performed. In addition, the contractor must include the following clause in the contract in a conspicuous, boldfaced font of at least ten (10) points in size:
"This contract is subject to Chapter 58, Business & Commerce Code. A contractor may not require a full or partial payment before the contractor begins work and may not require partial payments in an amount that exceeds an amount reasonably proportionate to the work performed, including any materials delivered."
The provisions of Chapter 58 cannot be waived, and a violation of this chapter’s provisions is a deceptive trade act or practice, allowing damages recoverable under the DTPA.
Section 58.001 of the Texas Business and Commerce Code defines a natural disaster as “the occurrence of widespread or severe damage, injury, or loss of life or property related to any natural cause, including fire, flood, earthquake, wind, storm, or wave action, that results in a disaster declaration by the governor or a local disaster declaration by a county judge under Chapter 418, Government Code.”
Accordingly, disaster remediation is “the removal, cleaning, sanitizing, demolition, reconstruction, or other treatment of improvements to real property performed because of damage or destruction to that property caused by a natural disaster.”
Similarly, a disaster remediation contractor is defined as a “person who engages in disaster remediation for compensation, other than a person who has a permit, license, registration, or other authorization from the Texas Commission on Environmental Quality for the collection, transportation, treatment, storage, processing, or disposal of solid waste.”
Given the definition of “person,” individuals, corporations, trusts, partnerships, associations, and other legal entities all benefit from the protection of this statute.
The chapter does not apply, however, to a contractor who has maintained a physical business address in the county where the property is located, or an adjacent county, for at least a year before the contract was made.