Get Two Signatures on that Contract

Last June I described a solar job that fell off the rails. Leonard signed the agreement as owner. Wife Rhonda didn’t. That left the solar contractor with half a contract. Under New Jersey law, Rhonda wasn’t bound by the contract’s arbitration clause. That made enforcement a true headache – half arbitration, half lawsuit.

Black Letter Law  

If two adults reside in a home, assume both are owners. A signed agreement by one owner doesn’t bind the other. Without signatures from all owners, you’re at a big disadvantage if there’s a dispute. How do you identify each “owner”? Easy. Your county recorder’s web site lists the owner of every property in the county. When in doubt, check the recorder’s site.

Texas puts another spin on this rule of two signatures. Witness Rock Solid Building v. Pounds, decided July 24, 2024.

Robert and Camille Pounds contracted with Rock Solid to install stucco and stone cladding on their new Travis, Texas home. As it turns out, the Pounds didn’t like Rock Solid’s work and refused to pay the contract price. Rock Solid filed a mechanic's lien on the property.

In most states, a mechanic’s lien attaches to the property being improved no matter who the owner may be, even if there’s no written contract. That’s what Rock Solid wanted. It’s easy to understand why. Camile hadn’t signed the contract! Under Texas Property Code § 53.254(c), to "fix a lien on a homestead," written contract must be signed by both spouses.

Did the Pounds have a homestead? In most states, an owner has to file a notice of homestead to have protection of the homestead law. The Pounds didn’t declare a homestead on their new home until more than a year after the Rock Solid agreement was signed.

Texas is famous for its homestead law. Every urban home on 10 acres or less can be protected as a homestead. Texas Property Code § 41.007(a) requires a special notice in every contract for building or remodeling a homestead. Failure to include this notice is a deceptive practice and invalidates any mechanics lien.

Were the Pounds protected by Texas homestead law? Remember, they didn’t declare a homestead until a year after contracting with Rock Solid. And they hadn’t moved in when the contract was signed.

Decision of the Texas Court

1.  In Texas, filing for a homestead is not necessary.
2.  It’s enough to show intent to claim a homestead eventually.
3.  Property intended to become a homestead is legally a homestead from the day of acquisition.
4.  An owner may establish a homestead even before he or she takes up occupancy.

An Expensive Lesson for Rock Solid

They lost the balance claimed on the contract and had to reimburse $9,523.25 in Pounds’ attorney's fees.

Suggestion: Next time, use a good contract form. Get signatures from all owners. Construction Contract Writer drafts agreements that include all required notices and disclosures, no matter the site or type of job. The trial version is free.