Cost to Repair Defective Work: In a construction defect case, the most obvious and justifiable category of recoverable damages is the cost to correct the defective work as expressly allowed under Texas Property Code, Chapter 27. The “cost to repair” is typically supported by expert opinions that identify the nature of the defect, the proper method to repair the defect, and the cost to correct the defect.

Cost to Repair Damaged Property: It is not uncommon for defective work to cause or result in damage to other property, or for contractors to inadvertently cause damage to personal property or fixtures while performing their work, which would be a recoverable damage.

Reimbursement of Money Paid: Contractors, especially pool contractors, tend to require large deposits or progress payments in advance of the work being performed. In a breach of contract case, any money paid to a contractor which has not been used to improve the Property is a recoverable category of damages.

Temporary Housing Expenses: Pursuant to Texas Property Code. Chapter 27, if the house cannot be occupied while the defective work is being repaired, then Homeowners are entitled to recover the reasonable cost of temporary housing incurred while the repairs are made.

Liquidated Damages: A well-drafted Construction Contract might include a “liquidated damage provision” which expressly states the dollar amount a Contractor is required to pay the Homeowners if the Project is not completed by a specific date. Liquidated damage provisions are enforceable in Texas if: (1) the actual damages that would be incurred because of the delay are too uncertain to measure at the time the parties enter into the Contract; and (2) the amount agreed to as a result of the delay is a reasonable estimate of the actual loss. The amount of the liquidated damages cannot be so large that it becomes a penalty as opposed to compensation for the actual loss.

Delay, Indirect or Consequential Damages: Homeowners commonly incur indirect or consequential damages because of a Builder’s or Contractor’s delay in completing the house or the work. It is very common to seek recovery of these damages which typically take the form of the costs incurred during the delay period that would not have otherwise been incurred but for the delay, e.g., increased or additional interest incurred on a loan, personal property storage fees, and apartment or house rental fees. However, most Contracts contain a “consequential damage waiver” or a “no damage for delay” provision, wherein both parties agree to waive this category of damages. Additionally, Chapter 27 does not expressly allow for the recovery of these types of damages and at least one Texas Appellate Court decision has therefore held that Homeowners are not entitled to recover delay damages in a construction case.

Diminution of Property Value: Although this category of damages is rarely sought because it is very difficult to prove, Chapter 27 does allow Homeowners to recover the reduction in Property value, if any, after the repairs have been made if the defect was a structural failure.

Mental Anguish and Emotional Distress: Although it is certainly not unreasonable nor uncommon for Homeowners to experience emotional distress and mental anguish as a direct result of construction defects or having to interact with a deceptive/difficult Builder or Contractor, this category of damages is typically not recoverable in a construction defect case. In fact, since it is not one of the seven categories of recoverable damages under Chapter 27, it is expressly not allowed. Moreover, construction Contracts typically contain a provision which requires Homeowners to waive claims for mental anguish regardless of the cause. Notwithstanding, if the Builder or Contractor has violated the Deceptive Trade Practices Act (“DTPA”) [https://statutes.capitol.texas.gov/Docs/BC/htm/BC.17.htm] through conduct unrelated to defective or poor workmanship, then it may be possible to recover mental anguish damages under that statute.

Treble Damages: Treble damages (3 times the amount of actual damages) are a potential recoverable damage under the DTPA; however, as stated above, the wrongful conduct cannot arise or be related to a construction defect or poor workmanship since treble damages are not allowed under Chapter 27.

Exemplary (Punitive) Damages: Chapter 12 of the Civil Remedies & Practice Code expressly authorizes the Court to award exemplary damages when a Builder, Contractor or Subcontractor knowingly files or maintains an invalid mechanic’s Lien against a Property with the intent to defraud and to cause the Property Owner to suffer financial injury or mental or emotional distress.

Civil Penalties: If a Builder or Contractor fails to include the following Chapter 27 Notice in its Contract, then the Court may award the Homeowner a $500.00 civil penalty:

Reimbursement of Attorneys’ Fees and Court Costs: Most Contracts contain an Attorney Fee provision which expressly states that the “Prevailing Party” in a lawsuit or binding arbitration is entitled to reimbursement of reasonable attorneys’ fees and costs. Chapter 27 also expressly allows the recovery of attorneys’ fees and costs if also allowed by Contract or statute. There are a few statutes which allow a judge or arbitrator to award reimbursement of reasonable attorneys’ fees and costs in a construction dispute.

Reimbursement of Consulting Fees: Most construction defect claims cannot be won without the support of a paid consulting expert. Unfortunately, this is another category of damages that is typically not recoverable in the United States for most all types of claims. Now, with that said, Chapter 27 expressly allows Homeowners to recover “reasonable and necessary engineering and consulting fees”; however, Texas Courts have interpreted this to mean that there still must be an underlying Contract provision or statute authorizing the recovery. However, that is very rare, but sometimes, certain Home Builder Contracts will expressly state that the prevailing party shall recover reimbursement of reasonable “expert fees”. The standard Perry Homes Contract typically contains such a provision.