About Kelly M. Davis Esq.

Kelly M. Davis is the owner of Kelly M. Davis & Associates, LLC. She grew up around the construction industry and knew once she opened her practice she would help construction related businesses.

Law Changes: Mandate Attorney’s Fees in Foreclosure Actions and Higher Interest in Contract Claims Against Local Government

Over the last several months I have written about several of the law changes that were produced by the 82nd Texas Congressional Session.  First was the change in the contract indemnification laws, I then wrote about the changes involving lien waivers and retainage notices.  Well these last two involve two relatively small changes to the Texas Property Code.  However, these “small” changes could possibly have large implications with regards to obtaining your attorney’s fees and interest in some construction litigation.  These are TX SB 539 and TX HB 345.

With regards to SB 539, there was a one word substitution from may to shall that now requires a court to award costs and attorney fees in any proceeding to foreclose a lien or to enforce a claim against a bond on a municipal project.  As far as I’m concerned the less wiggle room you give to a judge on what the Court “may” award, the better.  Additionally, I have already found that this new law has been helpful in settling mechanic’s lien and bond claims because I tell them “look, if we foreclose on our suit we are automatically going to get our attorney’s fees.”  That has much more weight than “a Judge might award us attorney’s fees.”

Again with HB 345, the law was changed to clarify how the interest should be calculated on breach of contract lawsuits against local governments.  It now uses the same interest calculation used under the prompt pay statute, which is eighteen percent per annum.

If you have ever talked to a non-construction law attorney who tries to figure out the mechanic’s lien/bond claim statutes in the Texas Property Code, they will usually tell you they are confusing and vague.  Well I believe these two new additions, in addition to the other ones we have already covered this year, are a step forward in clarifying and adding weight to the Statutes.  It is important to note that both of these laws are already in effect and have been in effect since September 1, 2011.