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How can I get paid for windows built for Gainesville Texas Housing Authority since they changed the start date?

TexasNotice of Commencement

I was to sign the notice to proceed papers on November 5, 2019 for a window job at the Gainesville , Texas Housing Authority. On September 25, 2019 all parties agreed to this date I ordered the specifically fabricated windows. They were to be delivered November 4, 2019. On Friday November 1, 2019 the director decided to wait until spring. The windows are built and were already loaded in the 18 wheeler. The director will not pay for the windows now until spring. The director is forcing the supplier to store the windows. My supplier wants to be paid. I have another window job coming up and he will not make the windows until these are paid for. I installed pilot windows in one apartment in September. I have not been paid for that. I have a $95,000 bond out that is just sitting there. There is another contractor that has a window job in Gainesville as well. He has had his job since April 9, 2019. He has not been allowed to do his job either. I got my job on June 13, 2019. I need to pay my window supplier and get reimbursed for my bond.

1 reply

Dec 18, 2019
Specially fabricated materials can create unique payment problems, like the one you discuss above. Unlike parties who supply ordinary materials to construction sites - specially fabricated materials aren't easily reusable on other jobs. So, when a job gets delayed for a supplier of ordinary materials, those materials may well be used or sold elsewhere. But, since specially fabricated materials can't be so easily repurposed, payment issues get exacerbated.

Payment recovery options for specially ordered materials not delivered

There are a few approaches that might be helpful for recovering payment here.

Bringing everyone to the table and talking it out

It may sound a bit naive or hopeful, but bringing everyone to the bargaining table and explaining the issue at hand can go a long way. If an open conversation can be had about the project and why the payment issues are arising, it may be easier to come to some sort of agreement on how to proceed. What's more, it can also help reframe the issue for a supplier if they understand your customer's point of view - or if they at least understand the root cause of the dispute from the party who's created it. Even if it seems a little hopeless, attempting to resolve payment issues amicably before things get a little more adversarial is usually a good idea. By bringing everyone together, there might not be a clear-cut solution. But, it at least raises the possibility for finding an agreeable middle ground.

Leveraging potential mechanics lien rights

Of course - keep in mind if the underlying project property is publicly owned, lien rights will typically not be available and legal claims may be more appropriate. Generally, those who supply specially fabricated materials in Texas will be entitled to mechanics lien rights, even if the materials aren't incorporated, as long as the Notice of Specially Fabricated Materials is properly sent. And, the timeframe for sending such notice is pretty long. So, working with a supplier to preserve their lien rights and leveraging that potential right could be a powerful play. Lien rights might not sound very applicable when the materials aren't actually delivered and where the project, itself, gets shelved. However, under Texas Property Code § 53-023, those materials may be lienable "even if the material has not been delivered or incorporated..." into the project. So, if the required notice is sent, then a lien claim could be on the table. Certainly, filing a lien before the project has even begun isn't ideal. But, if a customer isn't taking payment issues seriously, using the threat of a lien claim could certainly make things more real for a customer who's blowing off payment issues. And, of course, lien rights will also exist for any work that's actually already been performed on the project as long as the requisite notices have been sent.

Leveraging other claims

It's possible that other claims may be available too. If there's nothing in the contract allowing the customer to pause or shelve the project, then their doing so may constitute a breach of the contract. What's more, even if they are entitled to pause the job - that doesn't mean the payment terms of the contract no longer apply to them. So, if they've run afoul of those terms, that may also give rise to contract claims. Further, even in a situation where the customer is entitled to take liberties with the project schedule - like delaying it for several months - certain notice of the delay must typically be given. And, a customer must take that liberty in good faith, too - so if they've decided to wait on the job for questionable reasons, that could create liability for them, too. Again, making payment claims can cause strife on a project and such claims can test relationships. What's more, making claims can be costly and cause headaches for claimants themselves. But the point remains - payment claims are powerful tools, and if need be, a claimant can wield them. So, hinting at, warning, or threatening to make certain claims can help to resolve the matter and reach an amicable middle ground.

Pursuing mechanics lien claims or contract claims

Of course, actually pursuing some type of payment claim (or assisting/encouraging another party to pursue them) could work to force payment. For more information on pursuing mechanics liens or for more background on contract claims, these resources should be valuable: - Texas Mechanics Lien Guide and FAQs - Construction Contracts | A Deep Dive on Breach of Contract

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