! ! OWNER BUILDER NETWORK SPECIAL ! !
Join us at our custom home building workshop/seminar.
Saturday, September 16, 2017
11 a.m. to 1 p.m.
For those in attendance a coupon will be given in the amount of $500.00 off our fees, applicable at construction loan closing.
Owner Builder Network® is celebrating 20 years!
Note From the Founder:
If you or a loved one needs help please call Sheila Marler at (281) 356-9050 or cell: (281) 414-0477 and leave a message if I don't answer. We have been working with area shelters to assist with getting them what they need by networking and making deliveries. The office is now a drop off area for what is needed. It is then being dispersed to shelters.
Once again, we are proud of our 20 years. We have reached out to most of our customers from the past 5 years, and some more, along with the 30 plus homes we are working on now. None of them were flooded while many neighbors were. If you do it right the first time and have a soil test done where the home is being placed. And get your slab and frame engineered. Bring the slab at least 2 boards high and do a true compaction test. And have it tested many if not all your problems are taken care of.
P.S. Please pass this newsletter along if you think it will help someone. Thanks!
Flood Insurance Tips for Those Drowning in Red Tape
In the last Legislative session, laws were passed that will limit and/or restrict claims made by property owners against their insurance carriers. The new law go into effect Sept. 1st and lift many of the protections and remedies that Texas had concerning claims.
To attempt to take advantage of current Texas Insurance Law protecting property owners with regard to damage claims resulting from Hurricane Harvey, policyholders should send a written message and/or email directly to their insurance company that specifically references their claim and is dated before Sept. 1, 2017
Remember to keep copies of everything – document, document, document!!!
Important Reminder about Construction Claims for Builders and Contractors
AUTHOR(S) IAN P. FARIA, JON PAUL HOELSCHER
In light of the recent devastation caused by Hurricane Harvey, we want to remind area builders of the 2011 law that applies to disaster remediation contractors performing work in Texas.
A new law was passed in 2011 by the Texas Legislature and was included in Chapter 58 of the Texas Business & Commerce Code.
The law applies to disaster remediation contractors, which is identified as those engaged in the removal, cleaning, sanitizing, demolition, reconstruction, or other treatment of improvements to real property performed because of damage or destruction to that property caused by a natural disaster. A natural disaster is defined as widespread or severe damage, injury, or loss of life or property related to any natural cause, including fire, flood, earthquake, wind, storm, or wave action, that results in a disaster declaration by the governor. This means that any construction remediation project related to a natural disaster falls under this new law.
The statute requires any agreement for disaster remediation work be reduced to a written contract. Contracts for disaster remediation projects must contain a disclosure statement with specific language outlining the statute's prohibitions in boldfaced type of at least 10 point font:
This contract is subject to Chapter 58, Business & Commerce Code.A contractor may not require a full or partial payment before the contractor begins work and may not require partial payments in an amount that exceeds an amount reasonably proportionate to the work performed, including any materials delivered.
The requirements and legal effects of the statute cannot be waived by any party through contract or other means. Additionally, any violation of the statute is also considered a violation of the Texas Deceptive Trade Practices Act which allows for the recovery of attorneys' fees and multiplying damages in certain instances.
The law also provides that a contractor may not require a full or partial payment before the contractor begins work and may not require partial payments in an amount that exceeds an amount reasonably proportionate to the work performed, including any materials delivered. Therefore, a contractor cannot require a down payment, draw or other form of payment until work begins.
The law does not apply to remediation contractors if they maintain a physical business address in the county or a county adjacent to where the work is to be performed for one year prior to the date of contracting. This exception allows "local" companies to continue business as usual. However, the best practice would be to have your contracts and business practices set to comply with this law so that you can be ready to help in the event the next natural disaster is more than a county away. This new law affects all contracts entered into on or after September 1, 2011.
Disinfecting your well in 5 easy steps
Follow these directions for disinfecting your well if your water has coliform bacteria in it. This disinfection process treats only biological contaminants, not chemical or mineral contaminants.
Flush the System.
If your water is cloudy, let the water run for 10-15 minutes before disinfecting.
Chlorinate the well.
Use household bleach which typically has a chlorine concentration of 6%. Do not use "ultra" concentrated bleach or bleach products with additives or perfumes.
The amount of bleach to use is according to the chart below.
Mix bleach in a bucket of water. Remove well cap, plug, or vent (see diagram); using a funnel, pour the bleach into your well.
Mix the bleach with the well water.
Attach a hose to the nearest outside faucet and allow the water to run onto the ground for 1-2 minutes until you smell chlorine. Then place the hose in the hole where you poured to bleach, allow the water to turn back into the well for 15-20 minutes.
Remove the hose and replace the well cap, plug, or vent.
Chlorinate the lines.
Turn on each tap attached to well (kitchen, bathroom, outdoor spigot, etc.), starting with the nearest tap to the well, and let the water run until you smell blach, trun off and then go to the next tap.
Turn off electricity to the pump and let sit (12 hours or overnight.)
Flush the chlorinated water out of the system.
Choose any outdoor spigot and let the water run onto the ground, away from your septic system (also keep water flow from going into creeks, streams, or where fish or vegetation can be harmed), until you no longer smell bleach. This empties the bleach from the well.
Turn on each faucet inside the house until you no longer smell bleach.
Once the system has been flushed of all bleach, the water can be used for laundry and bathing but you should not yet use it for drinking, brushing teeth, making ice or preparing food.
Wait 3-4 days after flushing the bleach out to collect coliform bacteria samples. You may need to repeat this process several times before coliform test results are "satisfactory". Also, be aware that the bleach may disturb built-up minerals in your pipes and temporarily discolor your water. This discoloration should disappear once the bleach is flushed out of your system.
*1 gallon bleach for 300 – 400 ft. well
Flood Damage Best Practices and Notes:
August 30, 2017
First of all, my thoughts and prayers go out to everyone involved that you eventually find safe haven, safety, and that no health problems arise.
If you, as a contractor, are going to help, make sure FIRST that your family is all safe and sound. Secondly, make sure your business is prepared structurally and most importantly financially. This will be one of the most demanding experiences you will ever be involved with. So, if you are not prepared for that, it could ruin you, your family, and your business. That will not help anyone.
- Make sure your cash flow can survive minimally 3-4 months. This is how long it will be before you will see money even for the initial demo and cleanup.
- Check your resources so that you will have available what will be needed just to render aid.
- Do not make promises other than the help you can offer and that better days will come.
- When dealing with the client, the first thing you must do is to take care of their immediate needs (a hug, where they will stay while rebuilding, etc.) These people have lost all they have and will need some reassurance. This is crucial because you will need their help to reconstruct; therefore, their emotional health and safety is paramount.
- Sign a contract for preliminary work and another for the re-construction with all the proper elements of a contract including "Direction of payment to the insurance company." If you cannot get it signed, then you need to reconsider doing the work! Charge for preliminary work or it will break you.
- Before any demo begins, take enough pictures to document the property and the damage it received. These pictures need to be clear and capture all of the elements of damage possible. Open doors, move furniture, etc. to get the picture.
- This is BLACK WATER—do not start demo before using the proper protective gear of gloves, boots, N99 masks, etc. I generally spray an antimicrobial first to do an initial knockdown of bacteria. Remember that this water contains most pathogens known to man and can cause infections to occur quickly. If you even get scratched, attend to the wound immediately.
- Tear out must be methodical and documented. If the home received damages from wind, then the flood damages and the wind/storm damages must be separated and individually documented because the insurance coverages are different for each of them.
- If you were in the middle of a remodel, you must document where you were in completed works and any material on the job. Make sure you are paid contractually for this because insurance will not cover that. Insurance will cover the damage only, but not your interest in it.
- Only tear out and professional dry out should occur at this time. Until the various insurance companies agree on a reconstruction scope and price, it would be unwise to proceed. If the client is not insured and/or contractually commits to your reconstruction scope and price, then you can proceed.
- Make sure the scope of work is the first agreement with all parties. You cannot price it out without this. It will make the process easier if you do that. Your scope needs to be as clear and complete as possible. As a job is torn out your scope may change as damages are revealed. Update your scope and estimate continually to keep it current. Make the owner and the adjuster aware as well. Do not do these exhaustive estimates for free. They take too much time and effort and will need to be much more detailed than a regular remodel estimate. These estimates will have to be made room by room with multiple line items breaking down the scope and price of the damage. Either secure a contract to work or charge accordingly. This is a time-consuming effort and the magnitude of this work does need wasted effort. Most flood insurance companies will hold to what is known as "Xactimate pricing" and will not budge. It will take a lot of negotiations to move an estimate off that mark. Even though you might contract with the client to pay your contract regardless of the insurance commitment, it will take your best effort to get your client the best settlement. They are your client, and you owe them that! The work must be priced at what you are willing to do it for. That will vary company to company, but only you know what you can afford to do the work for.
- Before reconstruction begins, you need to make sure the property has been dried out professionally and tested dry or within industry standards. If you are not professionally certified to do this, do not do so!!! DO NOT close up any structure before you personally check to see if it is dry and that decontamination procedures involving antimicrobial spray were completed. You may find that a homeowner will need to occupy part of the home during reconstruction. Unless there is an upstairs this will be next to impossible. If you do this, set up some house rules and provide an entrance and exit for the client out of the work area. DO NOT let them move in until all wet materials are removed and the home decontaminated. It is your responsibility to protect everyone from harm!!
- Document reconstruction more so than you normally do during a remodel.
- As soon as contractually possible, secure your materials and take delivery. Local supplies WILL run out, and deliveries will be delayed. We have had to have materials drop shipped to us from hours away from our job. Make sure you get a commitment from all subs ASAP to keep your project on schedule and on their radar. Make those critical orders for doors and cabinets ASAP. Any item that is in your critical path of completion is what we are talking about here.
- Material and labor prices are going up. Get your orders in early to secure prices. Insurance companies will not base their pricing on this but on their previously set prices.
- Make sure contractually that you set a money collection schedule and stick to it. You are not a bank. When my business was in full reconstruction mode, it took a cash reserve of 250K-500K to handle the cash flow each month. I also had a signature line of credit of 250K just for insurance. Your subs and suppliers need payment upon demand regardless of whether you have been paid. This will also build loyalty and service to your company.
- If your client's insurance makes payment to the homeowner and the mortgage company, the mortgage company most likely will control the cash flow. Make sure you know their rules before you start so that you can make sure they release funds in a timely manner. Guys and gals, this can be a nightmare! Once again, you will have to be involved to help your client get YOUR money. It may not be what you want to do, but to help your client and yourself, you must help this process with your best negotiating skills.
- It is perfectly fine to do remodeling or other repairs during reconstruction. Just make sure you separate the two with paperwork and picture documentation.
- It is paramount that you meet with the adjuster ASAP and get them what they request. Always follow up so that your client's claim does not get bogged down. God forbid that during your process another storm event happens in another part of the country and your adjuster gets pulled to that area, basically putting you on hold. This has happened to every event over the past two years that I am aware of. So, stay on top of your client's claim. It is your claim, too.
- It will take more "hand holding" with your client during this process than with regular remodeling. Be patient, caring, and stay in touch. Indifference to your client and their family in any manner cannot be tolerated. Your clients are the whole family, their possessions, animals, etc. They have lost everything they held dear—pictures, clothes, jewelry, antiques, etc. This is an extremely tough and emotional time, and they will need reassurance from you that you can at least repair their structure and give them that support.
- Secure the premises on which you will work protecting your client, yourself, and your associates.
If you, as a contractor, want to travel to this area to help, there are additional consideration you must consider if you cannot return home each day
- Lodging is at a premium. You will most likely need an RV/travel trailer and a place to park it that is convenient to the area you will work in.
- Food and water are also at a premium, and you will need to take that with you and have secure storage.
- Generators and protective gear must go with you as well as secure storage for them and any other tools you may transport.
- Take a medical kit that can take care of small emergencies including bandages, antiseptics, aspirin, etc.
- Security and safety for you and your crew is crucial. Know the area, dynamics, and logistics of the area you intend to work.
- Work with and through a local contractor or close associate if possible. This will make all the above easier to deal with.
- Motivation to go and do this work must come from the heart and not your pocketbook. Although there are always opportunities in any disaster, the next disaster will be yours if your motives are wrong.
- Decide who you can help and what area you will work in.
- Be safe above all else. Treat your clients as family. Decide how many people you can help and what geographical area you can professionally and adequately serve. Do not overload your boat. Decide beforehand how much work you can handle. Maintain your health and your associates' health during this stressful time and BE PATIENT.
- REMEMBER that your client just lost all that they have and will be very emotional. Unfortunately, most of us have had no training in how to handle these intense owner emotions, but if you work from the heart you will do fine. Just know that those emotions are coming and that they will invoke deep emotions for you as well if you are a normal caring person. This is normal, but you will need to check most of that at the door so that you can help your client. That does not mean you act cold, sound uncaring, or insensitive, just that if you are not under control it will be harder to help them. Again, treat them as family.
Some other general notes:
- Tear out the wet and damaged goods ASAP even if you cannot dry it. You are better off this way.
- Know where you will put the spoiled material and contents.
- Have somewhere to safely store dry/dried salvageable contents.
- Although tear out and drying takes what it takes, it cost approximately $5-$6 per foot to do the demo and $4-$6 per foot to dry it. It still will take what it takes and I dry and demo by unit cost and per machine.