You finished the work. The money stopped. Scott Templeton is a San Angelo construction contract dispute lawyer who represents owners, general contractors, subcontractors, and suppliers when a project turns into a payment fight. Templeton Law Firm works with businesses across Tom Green County and the Permian Basin region, in English and Spanish.
Call 325-482-9120 or contact the firm online to discuss your project.
What Counts as a Construction Contract Dispute?
Any disagreement over what the contract required, what got built, and who owes whom. In practice these fall into four groups: nonpayment and slow payment, change orders that were performed but never signed, defective or incomplete work, and delay or scheduling claims.
Most of them start the same way. Someone keeps working on a verbal promise that the paperwork will catch up later, and it does not.
When Does a Texas Owner Have to Pay a Contractor?
Within 35 days of receiving a written payment request, under Chapter 28 of the Texas Property Code, known as the Prompt Payment to Contractors Act. Money then has to keep moving down the chain on a tight schedule.
| Who pays whom | Deadline |
| Owner pays the general contractor | 35th day after receiving a written payment request |
| General contractor pays subcontractors | 7th day after receiving the owner's payment |
| Subcontractor pays its own subs and suppliers | 7th day after receiving payment |
| Interest on late payment | 1.5 percent per month, starting the day after payment was due |
An owner can hold back money for a good faith dispute, but on commercial property the amount withheld is capped at 100 percent of the disputed difference. The 110 percent figure that circulates in the industry applies only to residential projects.
What Happens to Change Orders Nobody Signed?
They are still recoverable, and Texas builds in a partial safety net. Chapter 28 addresses unsigned change orders directly, so extra work performed at the owner's direction does not automatically become free work.
The practical answer is contemporaneous paper. Daily reports, field tickets, photographs with dates, and a single confirming email after a verbal instruction turn a disputed extra into a documented one. Owners rarely deny asking for the work. They deny agreeing to the price.
Can You Stop Work if You Are Not Getting Paid?
Yes, with written notice first. Section 28.009 allows an unpaid party to suspend performance on the 10th day after giving written notice to the owner and the owner's lender stating that payment has not been received and that work will stop.
Walking off without that notice is where contractors get hurt. Follow the statute and the suspension is protected. Skip it and the other side reframes the whole dispute as your breach.
Before you stop work or send a final demand, get the notice right. Call 325-482-9120.
How Long Do You Have to File a Mechanic's Lien in Texas?
Not long, and the rules changed for contracts signed on or after January 1, 2022. Chapter 53 of the Property Code now runs its deadlines off the 15th day of the month, and every deadline that lands on a weekend or legal holiday rolls to the next business day.
| Step | Commercial project | Residential project |
| Notice from a sub or supplier to the owner and general contractor | 15th day of the 3rd month after the month labor or materials were furnished | 15th day of the 2nd month |
| Filing the lien affidavit | 15th day of the 4th month after completion or last work | 15th day of the 3rd month |
| Notice to claim retained funds | 30th day after your contract or the original contract ends | Same |
Owners are required to reserve 10 percent of the contract price during the work and for 30 days after completion. Missing one of these dates does not erase the debt, but it removes the leverage that makes the debt collectible.
What if the Job Was for a School District, the City, or the County?
You cannot lien public property, so the payment bond replaces the lien. Chapter 2253 of the Government Code requires a payment bond on most governmental contracts over $25,000, and a performance bond on contracts over $100,000.
Bond claims have their own clock. Notice generally goes out on or before the 15th day of the third month after each month labor was performed or material delivered, and suit becomes available once the claim sits unpaid past the 61st day after that notice was mailed. Attorney fees are recoverable on a successful bond claim, which changes the economics of pursuing one.
Is a "Pay-If-Paid" Clause Enforceable in Texas?
Sometimes, and there are real ways around it. A pay-if-paid or pay-when-paid clause says a contractor does not owe its subcontractor until the owner pays first. Chapter 56 of the Business and Commerce Code makes those clauses unenforceable in several situations.
The clause fails if the party invoking it did not meet its own contract obligations, if the relationship between the payor and the owner is a sham, or if enforcement would be unconscionable. A subcontractor can also object in writing once 45 days have passed since it requested payment. Critically, the clause cannot be used to defeat a lien or a bond claim.
One warning specific to this region: Chapter 56 does not apply to civil engineering and public infrastructure work such as roads, highways, bridges, water and wastewater systems, drainage, or airports. On that kind of job, the protection is simply not there.
Can an Out-of-State Company Force You to Litigate Somewhere Else?
No, if the project is in Texas. Under Chapter 272 of the Business and Commerce Code, a clause requiring another state's law, or litigation or arbitration in another state, is voidable by the party performing the work.
The word voidable matters. The clause is not automatically dead. You have to affirmatively void it, which means raising it early rather than after you have already appeared in a Colorado or Oklahoma proceeding.
Arbitration clauses themselves are a separate question. Texas courts enforce them in construction contracts as a matter of course, so the realistic fight is usually over where the arbitration happens, not whether it happens.
How Long Do You Have to Sue Over Construction Work?
Four years for a breach of contract claim, under Section 16.051 of the Civil Practice and Remedies Code. A separate outer limit called a statute of repose then caps everything.
Claims against contractors, and against architects and engineers, generally must be brought within 10 years of substantial completion. That drops to 8 years when the claimant is a governmental entity. It drops to 6 years for certain residential work where the builder gave the specific written warranties the statute requires. These periods run regardless of when the defect was discovered.
What Does a Lawyer Look at First in a Construction File?
The paper trail, in order. I read the subcontract, the change order log, the daily reports, and the payment applications, then tell you plainly whether the file supports the claim. Construction cases are contract cases with a schedule attached, and I have been litigating contract disputes in West Texas since 1998.
Suits filed here go to the 51st, 119th, 340th, or 391st District Courts of Tom Green County. This work connects directly to the firm's contract disputes practice and to the wider set of the firm's commercial disputes practice.
Bring the contract and the last three pay applications. Call 325-482-9120.
Get the Money Question Answered Before the Deadlines Answer It for You
Construction disputes rarely announce themselves. They accumulate through one unsigned change order, one short payment, one month of silence, until a deadline you did not know about has already passed.
The office is at 905 S. Abe Street in San Angelo, weekdays from 9 AM to 5 PM. Fee arrangements for business matters are discussed during your consultation. Call 325-482-9120, email scott@templetonlawfirm.com, or schedule a consultation about your construction dispute.
Construction Dispute Questions San Angelo Contractors Ask
Does Texas license general contractors?
No. Texas has no statewide license for general contractors, home builders, or remodelers. Individual trades are licensed instead: electricians and air conditioning contractors through the Texas Department of Licensing and Regulation, and plumbers through the Texas State Board of Plumbing Examiners. City registration requirements are separate from all of that, and a licensing gap can become an argument in a dispute.
Can I recover my attorney fees?
Often, on a contract claim. Chapter 38 of the Civil Practice and Remedies Code allows fee recovery on written and oral contracts and on claims for labor and materials, but only after you present the claim and let 30 days pass without payment. Presentment does not have to be in writing, though writing is far easier to prove.
A 2021 amendment extended this to claims against LLCs and partnerships, not just individuals and corporations.
What if we never signed a written contract?
You may still have an enforceable agreement. Texas recognizes oral construction contracts, and courts also allow recovery under a theory called quantum meruit, which compensates the reasonable value of work accepted and used by the other party. Emails, texts, invoices, and field notes become the contract in those cases.
The owner says my work was defective. Does that end my payment claim?
No, it changes the shape of it. A defect allegation becomes an offset argument, meaning the owner claims a credit against what is owed rather than a free project. Independent inspection, the approved submittals, and the punch list usually decide how much of the claim survives, and a defect in one scope rarely justifies withholding payment on all of it.