The Disaster Restoration Racket: When “Cleanup” Quietly Turns into Unlicensed, Unqualified Remodeling

Attorneys who handle residential construction defect litigation, insurance disputes, and DTPA cases see this pattern repeatedly. A storm, fire, or plumbing loss occurs. The carrier dispatches-or the homeowner independently hires-a national “disaster cleanup” brand. The marketing pitch is remediation, mitigation, and speed. What actually follows is something far more troubling: wholesale remodeling work performed by entities that were never hired, never qualified, and never legally authorized to act as residential contractors in Texas.

This is not an aberration. It is an industry-wide business model.

Cleanup Ends-Unpermitted Construction Begins

Disaster remediation companies are, at best, specialists in demolition, drying, and environmental cleanup. Their core competency is removal, not construction. Yet, once the structure is opened up and the homeowner is vulnerable, these companies routinely segue into reconstruction: framing, electrical, plumbing, insulation, drywall, cabinetry, tile, and finishes. This work is often performed under the same contract, the same logo, and the same implied authority-despite the fact that the legal, technical, and regulatory requirements for construction are entirely different.

In Texas, this is not a gray area. Reconstruction following demolition is construction, not mitigation. Construction triggers permitting, inspections, and compliance with adopted codes. When disaster firms cross that line without proper licensure, permitting, and trade oversight, the result is predictable: latent defects, code violations, and systemic noncompliance that will not surface until well after the check has cleared.

Code Compliance Is Not Optional-Even in an Insurance Claim

Insurance involvement does not suspend the law. Contractors performing residential work in Texas are required to comply with the codes adopted by the authority having jurisdiction. For single-family residential construction, that typically includes the locally adopted edition of the International Residential Code (IRC), International Energy Conservation Code (IECC), and the National Electrical Code (NEC), with local amendments.

There is no “insurance exception” to:

• IRC R105 – Permit requirements for construction, alteration, and repair

• IRC R109 – Required inspections

• IRC R110 – Certificate of occupancy / approval

• IRC Chapters 3–11 – Structural, fire-resistance, energy, and life-safety provisions

• IECC (adopted edition) – Envelope, insulation, and air sealing requirements

• NEC (Texas has adopted the 2023 NEC) – Branch circuits, grounding, bonding, AFCI/GFCI protection, and workmanship standards

When disaster companies perform reconstruction without permits-or bury subcontracted work behind drywall before inspections-they create structures that are presumptively noncompliant. The absence of municipal enforcement does not legalize the work; it merely postpones discovery.

The Subcontracting Shell Game

A common defense raised by these firms is that they “subcontracted” the work. That argument fails both legally and practically. The entity contracting with the homeowner (or insurer) remains responsible for code compliance, supervision, and coordination of trades. Delegation does not equal absolution.

In practice, what is observed on site is worse: loosely vetted subs, no trade permits pulled in their names, no inspection sequencing, and no quality control. Electrical alterations performed without AFCI/GFCI upgrades. Plumbing modifications without pressure testing or proper supports. Insulation reinstalled without meeting IECC R-values or air-barrier continuity. Fireblocking omitted entirely. These are not cosmetic issues; they are life-safety and durability failures.

This Is Fertile Ground for Litigation

From a legal standpoint, this conduct exposes multiple fault lines:

• Negligence per se, where statutory and code violations establish breach

• DTPA violations, including false, misleading, or deceptive acts and unconscionable conduct

• Breach of contract, where the work fails to meet minimum legal standards

• Misrepresentation, where companies hold themselves out as qualified remodelers

• Insurance bad faith implications, when carriers rely on or endorse noncompliant reconstruction

The paper trail is often damning: generic scopes, vague line items, missing permits, and no inspection records. Once an independent forensic inspection is performed, the defect inventory is rarely short.

The Bottom Line for Counsel

Disaster remediation companies are not neutral actors restoring homes to their pre-loss condition. Many operate as vertically integrated profit centers that leverage chaos, fear, and insurer pressure to perform construction they are neither qualified nor authorized to perform. The homeowner believes the work is legitimate because a familiar national brand is involved. The insurer believes the claim is closed because the invoice was paid. Both are wrong.

For attorneys, these cases warrant immediate skepticism and aggressive discovery. Ask who pulled permits. Ask who supervised the trades. Ask which codes were followed. Ask where the inspection approvals are. In most cases, the silence will be louder than any marketing brochure.

This is not cleanup. It is construction masquerading as mitigation-and it fails homeowners every time.