Texas amends construction defect laws for contracts over ten million dollars

In the bustling halls of the Texas State Capitol, lawmakers gathered on January 22, 2025, to introduce a significant piece of legislation: House Bill 2021. This bill, aimed at reforming the construction industry, seeks to address the complexities surrounding claims of construction defects in private contracts exceeding $10 million.

At its core, HB 2021 establishes a structured process for addressing alleged construction defects, mandating that private owners and governmental entities provide detailed reports before initiating legal action. These reports must identify specific defects, describe the current condition of the affected structures, and outline any modifications made since the structures were first occupied. This requirement aims to foster transparency and accountability among contractors, subcontractors, and suppliers involved in large-scale construction projects.

One of the bill's notable provisions is the stipulation that parties must be given a reasonable opportunity to inspect the reported defects and correct them before any legal claims can be pursued. Specifically, contractors will have 30 days to inspect the defects and an additional 120 days to rectify the issues or negotiate a separate agreement for corrections. This approach is designed to encourage resolution outside of the courtroom, potentially reducing litigation costs and fostering better relationships among parties involved in construction projects.

However, the bill is not without its critics. Some lawmakers and industry advocates have raised concerns about the potential for delays in addressing legitimate claims, arguing that the extended timelines could hinder timely repairs and leave property owners vulnerable. Additionally, the bill explicitly excludes claims related to personal injury, wrongful death, and certain types of public projects, which has sparked debate about whether it adequately protects all stakeholders involved in construction.

The implications of HB 2021 extend beyond the immediate construction industry. Economically, the bill could streamline processes and reduce litigation costs, benefiting both contractors and property owners. Socially, it aims to enhance safety and quality in construction projects, ultimately protecting the interests of the public. Politically, the bill reflects a growing trend among states to reform construction defect laws, balancing the needs of property owners with the realities of the construction industry.

As discussions continue and amendments are proposed, the future of HB 2021 remains uncertain. Lawmakers will need to navigate the complexities of stakeholder interests while ensuring that the bill serves its intended purpose of improving accountability and efficiency in Texas's construction sector. The outcome of this legislative effort could set a precedent for similar reforms across the nation, making it a pivotal moment in the ongoing evolution of construction law.