Construction Defect Claims in Texas: Who Is Liable and for How Long

Who is liable for a construction defect?

Start with the contracts, because Texas law follows them. The owner hired the general contractor, so the general contractor is liable to the owner for defective work whether it was self-performed or subcontracted. The general contractor in turn has contract claims against the subcontractor whose work failed. Design professionals are liable to the party who hired them for errors in the plans, and a claim against an architect or engineer requires a certificate of merit from a licensed professional at filing (Tex. Civ. Prac. & Rem. Code § 150.002).

Suing a party you did not contract with is harder. Texas applies the economic loss rule: a party whose only loss is the reduced value or repair cost of the thing that was the subject of a contract generally cannot recover that loss in negligence from a stranger to the contract. Owners usually proceed against the general contractor, who then brings in the subcontractors. The economic loss rule explains where the line falls.

What claims are available?

• Breach of contract. The plans and specifications are part of the contract; work that does not conform is a breach. Damages are the reasonable cost of repair, or the diminished value of the property if repair would be economically wasteful.
• Breach of express warranty. Most construction contracts contain a one-year correction period and sometimes longer system warranties. A warranty claim is a contract claim with the warranty's own terms and notice requirements.
• Implied warranties. Texas courts recognize implied warranties in construction, including that work will be performed in a good and workmanlike manner, and parties can replace them with sufficiently specific express warranties.
• Negligence. Available against parties outside the owner's contract when the defect caused damage to other property or personal injury, within the economic loss rule.
• Residential Construction Liability Act. For a residence, Property Code chapter 27 governs the contractor's liability for construction defects and requires the pre-suit notice described below.
• DTPA. Consumers, including some businesses, may bring deceptive trade practices claims about construction, subject to that statute's own notice and limits.

Does a homeowner have to give notice first?

Yes. Before a claim against a contractor for a construction defect in a residence, the claimant must send written notice by certified mail, return receipt requested, describing the defects in reasonable detail, at least 60 days before filing (Tex. Prop. Code § 27.004). The contractor then has 35 days to request inspection and up to 60 days to make a written offer to repair or settle. Rejecting a reasonable offer caps the owner's recovery at the value of that offer and cuts off later fees. A suit filed without the notice is abated until it is given. The step is detailed in the Texas Residential Construction Liability Act. Commercial projects have no statutory notice step, but the contract's own notice and cure provisions usually apply.

How long do I have?

Two different kinds of clock run at once, and the shorter one controls.

Limitations runs from when the claim accrued. Breach of contract claims generally carry four years under the residual period in Civil Practice and Remedies Code § 16.051. Negligence claims for property damage generally carry two years under § 16.003. Texas applies the discovery rule to some claims where the injury is inherently undiscoverable, which can delay accrual for a hidden defect, but that is argued case by case.

Repose runs from substantial completion regardless of discovery. A suit against a person who constructed or repaired an improvement must be filed within ten years after substantial completion (§ 16.009), and the same ten years applies to registered architects, engineers and other design professionals (§ 16.008). Since June 9, 2023, a contractor who gave a written warranty meeting the statute's minimums on a new or remodeled residence has a six-year repose period instead. Presenting a written claim during the period extends it, and claims based on willful misconduct or fraudulent concealment are excepted. Statute of repose and limitations for construction claims works through each period and the exceptions.

Example

Suppose a Frisco retail center was substantially completed in May 2018 and the roof membrane began failing in 2025, seven years later. A contract claim against the general contractor accrued when the defective work was delivered, so limitations is the first fight and the discovery rule the owner's answer. The ten-year repose period runs to May 2028, so the claim is not barred by repose yet, but a claim filed in 2029 would be, no matter how late the leak appeared. Presenting a written claim to the contractor and the roofing designer before May 2028 extends repose by two years.

What decides these cases?

• Causation. Whether the failure came from design, materials, workmanship, maintenance or a later alteration. An expert report that separates these is the center of every defect case.
• Scope documents. The plans, specifications, submittals and approved changes define what was promised. Work that matches an approved substitution is not a defect even if it underperforms.
• Notice and opportunity to cure. Most contracts require the owner to give the contractor a chance to fix the problem before hiring someone else. Skipping it reduces or eliminates recovery.
• Damages measure. Repair cost is the usual measure; when repair cost far exceeds the loss in value, courts may limit recovery to the diminished value.
• Insurance. The contractor's commercial general liability policy may respond to resulting property damage but typically not to the cost of redoing the defective work itself, which shapes settlement.

What should an owner do when a defect appears?

1. Photograph and video the condition before any repair, with dates, and keep the damaged components if practical.
2. Pull the contract, the warranty, the approved plans and every change order; identify the notice clause and follow it.
3. Send written notice to the general contractor describing the problem and requesting inspection and repair, and the statutory RCLA notice if the property is a residence.
4. Retain an engineer or consultant to determine cause before accepting or rejecting a repair proposal.
5. Calendar the limitations and repose dates from substantial completion and from discovery, and present a written claim to extend repose if the ten-year date is near.

Where does the case go?

Most construction contracts in Dallas–Fort Worth require arbitration, often under AIA documents; without a clause, the suit is filed in the district court of the county where the property is located. Multi-party defect cases tend to pull in the general contractor, several subcontractors, the designer and their insurers, so the forum clause in each contract matters. Should a construction dispute go to arbitration or court compares the two. Tina Wysk handles construction defect claims and defenses for owners, contractors and design professionals in Dallas.