I. Deductible
Texas Law requires a person insured under a property insurance policy to pay any deductible applicable to a claim made under the policy. It is a violation of Texas Law for a seller of goods or services who reasonably expects to be paid wholly or partly from the proceeds of a property insurance claim to knowingly allow the insured person to fail to pay, or assist the insured person’s failure to pay, the applicable insurance deductible. No portion of this Agreement is to be construed as an avenue for Owners’ avoidance of payment of their insurance deductible.
II. WAIVER OF THE LIST OF SUBCONTRACTORS AND SUPPLIERS
AN OWNER IS NOT REQUIRED TO WAIVE THE RIGHT GRANTED BY SECTION 53.256, PROPERTY CODE, TO RECEIVE FROM THE CONTRACTOR AN ORIGINAL OR UPDATED LIST OF SUBCONTRACTORS AND SUPPLIERS. BY SIGNING THIS DOCUMENT, OWNERS AGREE TO WAIVE THEIR RIGHT TO RECEIVE FROM THE CONTRACTOR AN ORIGINAL OR UPDATED LIST OF SUBCONTRACTORS AND SUPPLIERS. OWNERS UNDERSTAND AND ACKNOWLEDGE THAT, AFTER SIGNING THIS DOCUMENT, THIS WAIVER MAY NOT BE CANCELED AT A LATER DATE. OWNERS HAVE VOLUNTARILY CONSENTED TO THIS WAIVER.
III. Liquidated Damages
AFTER THIS AGREEMENT BECOMES BINDING PURSUANT TO SECTION 2 ABOVE, IF OWNERS ELECT NOT TO REPLACE THE DAMAGED PROPERTY OR OWNERS DEFAULT IN THEIR OBLIGATION TO USE GENERAL CONTRACTOR TO PERFORM THE REPAIRS DETAILED IN THE SPECIFICATIONS, FOR ANY REASON OTHER THAN A DEFAULT BY GENERAL CONTRACTOR, AND OWNERS FAIL TO CURE SUCH DEFAULT WITHIN 10 DAYS AFTER RECEIVING WRITTEN NOTICE OF SUCH DEFAULT FROM GENERAL CONTRACTOR, THEN, UPON DEMAND BY GENERAL CONTRACTOR, THE LIQUIDATED DAMAGES PAYMENT OF 25% OF THE TOTAL PROJECT PRICE, SHALL BE PAID BY OWNERS TO GENERAL CONTRACTOR AS LIQUIDATED DAMAGES, WHICH IS BASED ON AVERAGE LOST EARNINGS OF GENERAL CONTRACTOR AS A RESULT OF OWNERS’ BREACH OF THIS AGREEMENT. THE PARTIES HERETO EXPRESSLY AGREE AND ACKNOWLEDGE THAT GENERAL CONTRACTOR’S ACTUAL DAMAGES IN THE EVENT OF A DEFAULT BY OWNERS WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO ASCERTAIN BECAUSE FACTORS SUCH AS ULTIMATE TOTAL LABOR AND MATERIAL UTILIZED, ALONG WITH ON-SITE COMPLICATIONS SUCH AS EXISTING PROPERTY CONDITIONS AND WORKMANSHIP AND WEATHER, ARE UNKNOWN UNTIL ENCOUNTERED, AND THAT AS A RESULT THE AMOUNT OF THE LIQUIDATED DAMAGES PAYMENT REPRESENTS THE PARTIES’ REASONABLE ESTIMATE OF SUCH DAMAGES AND A REASONABLE FORECAST OF JUST COMPENSATION THAT WOULD BE OWNED TO GENERAL CONTRACTOR THROUGH COMPLETION OF THE SCOPE OF WORK. THE PARTIES ACKNOWLEDGE THAT THE PAYMENT OF SUCH LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY, BUT IS INTENDED TO CONSTITUTE A LIQUIDATED DAMAGES TO GENERAL CONTRACTOR FOR ALL PURPOSES. GENERAL CONTRACTOR EXPRESSLY WAIVES ITS RIGHTS TO SEEK ADDITIONAL DAMAGES IN THE EVENT THE WORK ON THE PROPERTY AS CONTEMPLATED HEREUNDER IS NOT CONSUMMATED DUE TO OWNERS’ DEFAULT HEREUNDER. GENERAL CONTRACTOR DOES HEREBY SPECIFICALLY WAIVE ANY RIGHT TO PURSUE ANY OTHER REMEDY AT LAW OR EQUITY FOR SUCH DEFAULT OF OWNERS, INCLUDING, WITHOUT LIMITATION, ANY RIGHT TO SEEK, CLAIM, OR OBTAIN RESCISSION, DAMAGES, PUNITIVE DAMAGES OR CONSEQUENTIAL DAMAGES. IN ANY AND ALL ACTIONS BROUGHT PURSUANT TO OR TO ENFORCE OWNERS’ OBLIGATIONS UNDER THIS AGREEMENT, IT SHALL BE CONCLUSIVELY PRESUMED THAT THE ABOVE-DESCRIBED LIQUIDATED DAMAGES SHALL BE THE SOLE REMEDY OF GENERAL CONTRACTOR IN THE EVENT OF OWNERS’ DEFAULT HEREUNDER.
IV. Additional Insurance Matters
a. If decking is required but not covered by your policy it will be replaced and you agree to pay to General Contractor, $3.00 per square foot for OSB decking and $8.00 per linear foot repaired for plank decking – $400.00 Minimum Charge.
b. The “Insurance Pricing” may be modified as needed due to additional insurance supplements (ie – O&P, additional trades, etc.) or the addition or deletion of trades by Contractor or Owners. Owners authorize Contractor to obtain labor and material in accordance with “Insurance Pricing”.
c. If the insurer indicates that any line item of the work is not covered at full replacement cost (RCV), Owners will be responsible for the difference between the replacement cost and insurance coverage. To the extent we are informed of those items by the insurer in a timely manner, we will inform you, and you can decide whether you want to proceed with the work and pay the portion of the costs not covered by your insurer.
d. Any insurance supplements obtained are to be paid directly to the Contractor.
e. If you have non-recoverable depreciation or “ACV” policy you agree to pay those amounts directly to Contractor.
V. Work Commencement, Delays, Force Majeur
a. Following approval by the insurance company and acceptance by General Contractor, work will be scheduled to commence within thirty (30) days of General Contractor’s receipt of the initial insurance payment.
b. Owners understand and agree that the insurance claim negotiation process, including the statutory appraisal process, is highly variable and involves escalated degrees of communication, meetings, inspection, and coordination of schedules, and that reasonable delays in seeking or obtaining insurance approval for payment for the Project does not constitute a breach of this Agreement.
c. Owners understand and agree that delays due to weather and materials supplies are reasonable and due not constitute a breach of this Agreement.
d. Force Majeure: No Party shall be liable or responsible to the other Party, nor be deemed to have defaulted under or breached this Agreement, for any failure or delay in fulfilling or performing any term of this Agreement (except for any obligations to make previously owed payments to the other Party hereunder) when and to the extent such failure or delay is caused by or results from acts beyond the impacted Party’s (“Impacted Party”) reasonable control, including, without limitation, the following force majeure events (“Force Majeure Event(s)”) that frustrates the purpose of this Agreement: (a) acts of God; (b) flood, fire, earthquake or explosion; (c) war, invasion, hostilities (whether war is declared or not), terrorist threats or acts, riot or other civil unrest; (d) government order or law; (e) actions, embargoes or blockades in effect on or after the date of this Agreement; (f) action by any governmental authority; (g) national or regional emergency; (h) strikes, labor stoppages or slowdowns or other industrial disturbances; (i) epidemic, pandemic or similar influenza or bacterial infection (which is defined by the United States Center for Disease Control as virulent human influenza or infection that may cause global outbreak, or pandemic, or serious illness); (j) emergency state; (k) shortage of adequate supplies and equipment; (l) shortage of power or transportation facilities; and (m) other similar events beyond the reasonable control of the Impacted Party.
VI. Warranty
a. Contractor provides a limited five-year labor warranty on its roofing services. This warranty is limited to defects in workmanship and customer’s sole remedy shall be to allow Contractor to repair any defective workmanship. This warranty is transferable upon payment of the transfer fee, and does not cover damage to roofs caused by lightning, wind (50 mph or higher on residential), hurricane, tornado, hailstorm, impact of foreign objects or other violent storm or casualty, or damage due to settlement, distortion, failure or cracking of the roof deck, walls or foundation of a building. Labor warranty applies to the installation of the roof only.
b. Warranty for materials is limited to any Manufacturer Material Warranty. Contractor does not warranty materials. Manufacturer’s Warranties will be placed in effect when all monies for project have been cleared or as per Manufacturer Warranty terms. All Manufacturers’ warranties on the material are assigned to Owners.
c. Contractor is to be notified if any changes are to be made to the roofing system once installed, in order to maintain these warranties.
d. THE ABOVE WARRANTIES ARE VOID IF INVOICE IS NOT TIMELY PAID WHEN BALANCE IS DUE.
e. Disclaimer of Warranties: CONTRACTOR MAKES NO OTHER WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, CONCERNING THE ROOFING MATERIALS AND LABOR AND EXPRESSLY DISCLAIMS ALL OTHER EXPRESS AND IMPLIED WARRANTIES TO THE FULLEST EXTENT PERMITTED BY LAW.
VII. Reduction of Work:
a. If you inform Contractor of intent to remove any portion of Contractor’s scope of work from the contract, Contractor will prepare a written change order for the change in Specifications, and reduce the Insurance Pricing by the insurer’s current line-item RCV/ACV offer including the associated portion of general Contractor markup, where applicable.
VIII. Items Specifically Excluded:
a. These items are not included unless listed in the Specifications: electrical, plumbing, wood nailer, gypsum/lightweight concrete/wood/metal/tectum decking, signs, siding, and A/C mechanical forces, etc. Further, replacement of deteriorated decking, fascia boards, roof jacks ventilators, flashing and other materials, unless otherwise stated in this Agreement, is not included
b. Contractor will not be responsible for re-alignment of satellite dish antennas.
c. Contractor is not responsible for evaluating your homes ventilation and circulation system.
d. Additional Work: If you elect to perform additional work beyond the insurer’s agreed scope, or if additional damage requiring repairs is discovered, a construction change order will be prepared indicating the change in scope of work and associated cost. If the work is not part of the insurance claim, the Owners will have financial responsibility for costs related to that portion of the work.
e. Contractor will not be held liable for energy code requirements or upgrades. In the event such requirements or upgrades are necessary, a construction change order will be prepared indicating the change in scope of work and associated cost. If the work is not part of the insurance claim, the Owners will have financial responsibility for costs related to that portion of the work.
f. Required city permit fees are to be paid by Owners and would be applied for reimbursement on the final invoice that will be submitted to insurance company.
g. Any leftover materials are the property of Contractor.
IX. Risk of Loss and Liability for Damage:
a. Owners assume all risk and liability for the loss of or damage, for the death of or injury to any person or property of another, and for all other risks and liabilities arising from conditions not created by Contractor.
b. Contractor expressly disclaims any liability in the event of any breakdown or failure of Contractor’s labor, equipment, tools, transportation and anything else necessary in the performance and completion of the Work. In no event shall the Contractor be liable for any consequential damages or loss of profit.
c. Owners agree that Contractor will not be responsible for any damages caused by mold, or any other fungus or biological material.
d. Contractor is not responsible for improperly installed Water, Gas or HVAC lines. Owners are fully responsible for all gas lines, electrical lines, HVAC, freon lines or any lines mounted to roof decking or within 3” of roof decking.
e. Contractor is not responsible for nail pop interior damage caused by improperly installed drywall.
f. Contractor is not responsible for over spray if a 2 hour notice has been given verbally to the on duty manager or maintenance department or for content/property damage after installation and during warranty period.
g. Contractor will not be obligated to make any attic line repairs in the event of failure or punctured lines due to improper installation.
X. Lien on Homestead Property:
a. If Contractor is repairing or remodeling existing improvements Owners may rescind this Agreement without penalty or charge within three (3) days from the execution of this Agreement by both Owners and Contractor, unless the work and material are necessary to complete immediate repairs to conditions on the homestead and the Owners of the homestead acknowledge such in writing.
b. If Owners are applying for credit to finance the work and materials under this Agreement, this Agreement MUST be signed within five (5) days after Owners make a written application for any extension of credit for the work and material, unless the work and material are necessary to complete immediate repairs to conditions on the homestead and the Owners of the homestead acknowledge such in writing.
c. If the Project is to be paid for by financing secured by Owners Homestead, this Agreement MUST be signed by both Owners at the office of either: (1) the 3rd party lender financing the work and material, (2) an attorney’s office, or (3) at a title company.
d. By signing this Agreement, Owners consent to the placement of a mechanic’s lien on the homestead property described in this Agreement, for work and materials provided under this Agreement, in the event of non-payment upon substantial completion of the project.
XI. Representations and Miscellaneous Additional Terms:
a. Representations. Each of the Parties hereby covenants, represents and warrants that:
(1) Prior to executing this Agreement, such Party carefully read this Agreement and became fully and completely informed and aware of (i) the facts relating to the subject matter of this Agreement; (ii) such Party’s rights and liabilities; and (iii) the terms, contents, provisions, and effect of this Agreement.
(2) Such Party entered into this Agreement voluntarily after having given careful and mature consideration to the making of this Agreement.
(3) In entering into and signing this Agreement, such Party has had the benefit of the advice of their attorneys, or ample opportunity to retain attorneys, and enters into this Agreement freely and voluntarily by such Party’s own choosing and judgment, and without duress or other influence.
(4) In entering into and signing this Agreement, each Party represents that such Party has not relied upon, is not relying upon, and will not rely upon, any statements, representations, acts, or omissions of any other Party, except as expressly set forth in writing herein.
(5) This Agreement is duly executed by each Party with full knowledge and understanding of its terms and meaning, on such Party’s own judgment and upon the advice of such Party’s attorneys.
(6) Such Party has authority to bind the Party for whom that signatory acts, and that the claims, suits, rights, or interests which are being released are owned by the Party, have not been assigned, transferred, or sold, and are free of encumbrance for which the Party contends such Party is obligated.
(7) Each Party agrees to sign any and all other documents necessary to effectuate the intent of this Agreement.
b. Entire Agreement: This Agreement, Additional General Terms & Conditions, and the Attached Addendum A , constitute, the entire understanding of the parties and no other understanding, collateral or otherwise, shall be binding, unless in writing signed by all parties. Any representations, or other communications not written in this Agreement are agreed to be immaterial and not relied on by either party or do not survive the execution of this Agreement. No salesperson of Contractor has any authority to make oral or written agreements or representations that modify, add to or change the terms and conditions of this Agreement. All modifications must be in writing and signed by both Owners and by Contractor.
c. Notice of Defect: If you have a complaint concerning a defect arising from the performance of this Agreement and the defect has not been corrected through normal warranty service, you must provide written notice by certified mail, return receipt requested to Contractor, not later than the 60th day before the date you file suit. The notice must describe the construction defect with particularity. Upon request by Contractor, you must provide Contractor, with an opportunity to inspect and cure the defect.
d. Costs, Expenses, and Attorney’s Fees: Each of the Parties shall be responsible for paying their own costs and expenses incurred in connection with entering into and performing this Agreement. However, starting from the date this Agreement is signed, should either Party hereto institute any action or proceeding in court to enforce any provision hereof or for damages by reason of any alleged breach of any provision of this Agreement or for any other judicial remedy, the prevailing Party shall be entitled to receive from the losing Party all reasonable attorneys’ fees and all court costs in connection with said proceeding.
e. Mediation: It is the policy of the State of Texas to encourage resolution of disputes through alternative dispute resolution procedures such as mediation. Any dispute between Owners and Contractor related to this contract which is not resolved through informal discussion WILL be submitted to a mutually acceptable mediation service or provider. The parties to the mediation shall bear the mediation costs equally. This paragraph does not preclude a party from seeking equitable relief from a court of competent jurisdiction.
f. Limitations Period for Claims: Any action, regardless of form, arising out of the transactions covered by this contract must be brought within two (2) years of the date of this contract.
g. Applicable Law: This Agreement is made in Rockwall County, Texas and shall be governed by, construed, interpreted, and enforced in accordance with the laws of the State of Texas. Any action related to this Agreement shall be brought in Rockwall County, Texas.
h. No Waiver: No right or remedy granted herein or reserved to the parties is exclusive of any right or remedy herein by law or equity provided or permitted; but each shall be cumulative of every right or remedy given hereunder. No covenant or condition of this contract may be waived without consent of the parties. Forbearance or indulgence by any party shall not constitute a waiver of any covenant or condition to be performed pursuant to this contract.
i. Severability: If any provision contained in this Agreement is determined to be void, illegally or unenforceable, in whole or in part, then the other provisions contained herein shall remain in full force and effect as if the provision which was determined to be void, illegally or unenforceable had not been contained herein. Further, if any provisions are deemed unenforceable as written for any reason, the parties expressly authorize the court making the determination as to enforceability to revise, delete or add to the provision to the extent necessary to enforce the intent of the parties.
j. Modification: This agreement may not be modified, altered or amended, except by written agreement of all the parties hereto, except as provided by order of any court. Any work outside that identified in “Addendum A” will be considered a change order to this Agreement and must be in writing, agreed to by all parties hereto.
k. Standard of Care: All work performed by Contractor will meet requirements defined by the Residential Construction Performance Guidelines of the National Association of Home Builders – 3rd Edition. Clean up shall consist of reasonable efforts to leave the jobsite clean at the end of the project. Contractor does not engage in Architectural or Engineering design services unless specifically included in the contract.
l. Interest: All past due sums for the contracted work shall bear interest at the maximum rate allowable by law, until paid in full.
m. Not a Public Adjuster: Owners acknowledge that Contractor is not a public insurance adjuster and cannot act to negotiate or settle an insurance dispute or claim.
ADDENDUM A: RESIDENTIAL DISCLOSURE NOTICE – TEX. PROP. CODE 53.255
“KNOW YOUR RIGHTS AND RESPONSIBILITIES UNDER THE LAW. You are about to enter into a transaction to build a new home or remodel existing residential property. Texas law requires your contractor to provide you with this brief overview of some of your rights, responsibilities, and risks in this transaction.
“CONVEYANCE TO CONTRACTOR NOT REQUIRED. Your contractor may not require you to convey your real property to your contractor as a condition to the agreement for the construction of improvements on your property.
“KNOW YOUR CONTRACTOR. Before you enter into your agreement for the construction of improvements to your real property, make sure that you have investigated your contractor. Obtain and verify references from other people who have used the contractor for the type and size of construction project on your property.
“GET IT IN WRITING. Make sure that you have a written agreement with your contractor that includes: (1) a description of the work the contractor is to perform; (2) the required or estimated time for completion of the work; (3) the cost of the work or how the cost will be determined; and (4) the procedure and method of payment, including provisions for statutory reservation of funds and conditions for final payment. If your contractor made a promise, warranty, or representation to you concerning the work the contractor is to perform, make sure that promise, warranty, or representation is specified in the written agreement. An oral promise that is not included in the written agreement may not be enforceable under Texas law.
“READ BEFORE YOU SIGN. Do not sign any document before you have read and understood it. NEVER SIGN A DOCUMENT THAT INCLUDES AN UNTRUE STATEMENT. Take your time in reviewing documents. If you borrow money from a lender to pay for the improvements, you are entitled to have the loan closing documents furnished to you for review at least one business day before the closing. Do not waive this requirement unless a bona fide emergency or another good cause exists, and make sure you understand the documents before you sign them. If you fail to comply with the terms of the documents, you could lose your property. You are entitled to have your own attorney review any documents. If you have any question about the meaning of a document, consult an attorney.
“GET A LIST OF SUBCONTRACTORS AND SUPPLIERS. Before construction commences, your contractor is required to provide you with a list of the subcontractors and suppliers the contractor intends to use on your project. Your contractor is required to supply updated information on any subcontractors and suppliers added after the list is provided. Your contractor is not required to supply this information if you sign a written waiver of your rights to receive this information.
“MONITOR THE WORK. Lenders and governmental authorities may inspect the work in progress from time to time for their own purposes. These inspections are not intended as quality control inspections. Quality control is a matter for you and your contractor. To ensure that your home is being constructed in accordance with your wishes and specifications, you should inspect the work yourself or have your own independent inspector review the work in progress.
“MONITOR PAYMENTS. If you use a lender, your lender is required to provide you with a periodic statement showing the money disbursed by the lender from the proceeds of your loan. Each time your contractor requests payment from you or your lender for work performed, your contractor is also required to furnish you with a disbursement statement that lists the name and address of each subcontractor or supplier that the contractor intends to pay from the requested funds. Review these statements and make sure that the money is being properly disbursed.
“CLAIMS BY SUBCONTRACTORS AND SUPPLIERS. Under Texas law, if a subcontractor or supplier who furnishes labor or materials for the construction of improvements on your property is not paid, you may become liable and your property may be subject to a lien for the unpaid amount, even if you have not contracted directly with the subcontractor or supplier. To avoid liability, you should take the following actions:
(1) If you receive a written notice from a subcontractor or supplier, you should withhold payment from your contractor for the amount of the claim stated in the notice until the dispute between your contractor and the subcontractor or supplier is resolved. If your lender is disbursing money directly to your contractor, you should immediately provide a copy of the notice to your lender and instruct the lender to withhold payment in the amount of the claim stated in the notice. If you continue to pay the contractor after receiving the written notice without withholding the amount of the claim, you may be liable and your property may be subject to a lien for the amount you failed to withhold.
(2) During construction and for 30 days after final completion, termination, or abandonment of the contract by the contractor, you should reserve or cause your lender to reserve 10 percent of the amount of payments made for the work performed by your contractor. If you choose not to reserve the 10 percent for at least 30 days after final completion, termination, or abandonment of the contract by the contractor and if a valid claim is timely made by a claimant and your contractor fails to pay the claim, you may be personally liable and your property may be subject to a lien up to the amount that you failed to reserve.
“If a claim is not paid within a certain time period, the claimant is required to file a mechanic’s lien affidavit in the real property records in the county where the property is located. A mechanic’s lien affidavit is not a lien on your property, but the filing of the affidavit could result in a court imposing a lien on your property if the claimant is successful in litigation to enforce the lien claim.
“SOME CLAIMS MAY NOT BE VALID. When you receive a written notice of a claim or when a mechanic’s lien affidavit is filed on your property, you should know your legal rights and responsibilities regarding the claim. Not all claims are valid. A notice of a claim by a subcontractor or supplier is required to be sent, and the mechanic’s lien affidavit is required to be filed, within strict time periods. The notice and the affidavit must contain certain information. All claimants may not fully comply with the legal requirements to collect on a claim. If you have paid the contractor in full before receiving a notice of a claim and have withheld the 10 percent of the contract price or value of work, you may not be liable for that claim. Accordingly, you should consult your attorney when you receive a written notice of a claim to determine the true extent of your liability or potential liability for that claim.
“OBTAIN A LIEN RELEASE AND A BILLS-PAID AFFIDAVIT. When you receive a notice of claim, do not release withheld funds without obtaining a signed and notarized release of lien and claim from the claimant. You can also reduce the risk of having a claim filed by a subcontractor or supplier by requiring as a condition of each payment made by you or your lender that your contractor furnish you with an affidavit stating that all bills have been paid. Under Texas law, on final completion of the work and before final payment, the contractor is required to furnish you with an affidavit stating that all bills have been paid. If the contractor discloses any unpaid bill in the affidavit, you should withhold payment in the amount of the unpaid bill until you receive a waiver of lien or release from that subcontractor or supplier.
“OBTAIN TITLE INSURANCE PROTECTION. You may be able to obtain a title insurance policy to insure that the title to your property and the existing improvements on your property are free from liens claimed by subcontractors and suppliers. If your policy is issued before the improvements are completed and covers the value of the improvements to be completed, you should obtain, on the completion of the improvements and as a condition of your final payment, a ‘completion of improvements’ policy endorsement. This endorsement will protect your property from liens claimed by subcontractors and suppliers that may arise from the date the original title policy is issued to the date of the endorsement.