Can a contractor demand us to pay him upfront for the 20% fee he charged to assist us in a supplement to our original claim for the Texas freeze last year, prior to the work being completed, inspection, and or the payment by the insurance company? We researched and found Texas House Bill 2013: Contractors Cannot Act as Public Adjusters. Texas, it is illegal for a contractor to handle or negotiate your insurance claim on your behalf. The public adjuster must be licensed and the contractor cannot be the same person or company. Even if he was licensed inTexas, a PA's fee is capped at 10% of the settlement of the claim.
If the property is the your homestead (meaning that the owner owns the property and lives there) then the contract with the owner would have to satisfy the requirements of Texas Property Code sections 53.254, et seq., which requires specified homestead lien warnings, signing by husband and wife, and recordation in the county property records.
You really should retain a construction attorney to review and evaluate your legal position based on the contract and pertinent documents. The right to be entitled to file a mechanic's lien is set out in Texas Property Code Chapter 53, and you really need to make sure that if the contractor does file a lien, you can properly and appropriately address the filing.
Filing an invalid lien could subject the contractor to liability under the Texas Fraudulent Lien Act, and the contractor could be liable for statutory damages of $10,000, or actual damages, whichever is greater, plus attorney's fees.
The contractor may have violated the Texas Public Adjusters Act by settling or attempting to settle your claim with your insurer.
The contractor may have violated the Texas Home Solicitation Act by not providing a detachable notice of cancellation form.
In either event, you may be able to declare the contract void.
Again, retain a construction attorney to evaluate your legal situation and to provide advice.
Good luck.
The legal analysis would start with a review of the contract(s) and extend to any communications which have occurred, and the contractor's efforts to settle your insurance claim.
Feel free to email me your contract(s) with some limited explanations as to the facts. I will be happy to review the documents briefly at no charge to you.
Brian W. Erikson
The Erikson Firm, A Professional Corporation
P.O. Box 140249
Dallas, Texas 75214-0249
Telephone: 214-202-4742
Telecopier: 1-214-853-5320
eMail: Brian.Erikson@eriksonfirm.com
Thank you.