USA – TEXAS Law and Practice Contributed by: Taylor Cooksey, David Brooks, Serena Kramer and Philip Kinkaid, Cokinos | Young
7. Construction 7.1 Common Structures Used to Price Construction Projects Fixed Price With a fixed price contract, a predetermined price for the entire project is agreed upon, based on existing plans and specifications and well-defined require - ments. The owner has cost certainty because the contractor assumes the risk of cost overruns. Agreed change orders may revise the fixed price. Cost-Plus With a cost-plus contract, the contractor is reim - bursed for the actual costs of labour, materials and equipment, plus an agreed fee which is either a fixed amount or a percentage of the costs. With a cost-plus price contract, the owner assumes the risk of cost overruns. Guaranteed Maximum Price The foregoing are the most common structures, but a guaranteed maximum price contract is sometimes used. This represents a hybrid of the most common contracts, with the contractor providing a cost-plus estimate with a guaranteed maximum price not to be exceeded. The contractor will absorb overruns above that maximum, but savings below it are shared between the contractor and the owner by an agreed percentage. 7.2 Assigning Responsibility for the Design and Construction of a Project The different methods for assigning responsibility for the design and construction of a project are as fol - lows. • Design-Bid-Build: this is the most common method for assigning design (architect/engineer) and construction (contractor) responsibilities, where separate entities are involved for each discipline. • Design-Build: disciplines of both design and con - struction are assigned to a single entity. • Construction Manager at Risk: a construction man - ager is engaged to oversee the project from start to finish. The construction manager acts as a consult - ant during the design phase and as the general contractor during construction.
in order to be accepted for recording. No taxes are payable at recording, but a nominal recording fee will be imposed. 6.21 Forced Eviction Tenants can be evicted prior to the expiration of their lease if they breach their lease and fail to cure their default within the time specified in the lease. There are procedural requirements with which landlords must strictly comply. The eviction process can take anywhere from 23 to 30 days from the initial notice to vacate (if the tenant does not appeal), to three months or even longer if the tenant appeals or there are court delays. Within the foregoing dates is a ten to 21-day trial timeline after a petition is filed. In cases involv - ing squatters or unauthorised occupants, the eviction procedural timeline may be shortened, but not the trial timeline. 6.22 Termination by a Third Party A lease may be terminated by the government or by a quasi-governmental entity through eminent domain. The eminent domain process typically takes between 12 and 18 months, and permits any party with an interest in the affected property to pursue claims for a condemnation award. Tenants are entitled by law to compensation for the lost value of their remaining lease term and for moving expenses. 6.23 Remedies/Damages for Breach Landlords in Texas have a legal duty to take reason - able steps to attempt to relet premises and mitigate their damages in the event a tenant defaults under a lease. In addition to pursuing a claim for damages, Texas landlords have a statutory lien and will usually have a contractual lien contained in a lease, creating a security interest in their tenants’ personal property located in the leased premises. After following requi - site statutory and contractual requirements (depend - ing on whether the statutory or contractual lien is being foreclosed), they can seize and sell the tenant’s personal property after a tenant default to help cover damages. Security deposits are held in cash but, in certain cir - cumstances, landlords may accept a letter of credit in addition to or in lieu of a security deposit.
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