Texas / Express News - HB730

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"The Texas Residential Construction Commission Act would create a commission with two-thirds majority control by the homebuilding industry. It would decide criteria for building performance standards and warranties, and would establish a new layer to the already multilayered homebuyer dispute resolution process." http://news.mysanantonio.com/story.cfm?xla=saen & xlb=110 & xlc=985970 Janet Ahmad, PresidentHomeOwners for Better BuildingSan , TXhttp://www.hobb.org

Home-dispute panel to be argued

By Adolfo Pesquera

Express-News Business Writer

Web Posted : 04/25/2003 12:00 AM

A proposed law, initially drafted by Texas homebuilders to create a state commission to resolve construction disputes and set building standards, is set for debate today in the Texas House of Representatives. The Texas Residential Construction Commission Act would create a commission with two-thirds majority control by the homebuilding industry. It would decide criteria for building performance standards and warranties, and would establish a new layer to the already multilayered homebuyer dispute resolution process. Under current state law, homeowners must give 60 days notice and allow a contractor 45 days after receiving notice to inspect damages and make a reasonable offer. If the offer is rejected, most contracts require the homeowner to settle the dispute through binding arbitration instead of in civil courts. "These bills allow the shoddy construction to perpetuate and makes it impossible for anybody to get a decent remedy," said Anne Stark, a Dallas construction defects attorney who opposes this and a companion bill in the Senate. The state commission, if created, would be the only venue for a homeowner who is economically or physically hurt by a badly built house. The homeowner would have to pay an application fee up front to start the process and for the professional services of a commission-appointed, third-party inspector. On administrative appeal, a three-member panel appointed by the commission then could overrule the inspector. Erben, a KB Home lobbyist, told the House Regulated Industries Committee that unless homebuyers are forced to go through the commission, they "could avoid making a genuine attempt to resolve construction disputes." Remedies under the bill would be strictly limited to recovering the cost of repairs, professional fees and temporary housing. It would bar the consumer from including punitive damages and damages for personal injury in a construction defect case. A substitute bill that called for registering builders never got out of the committee. The homebuilders' bill incorporated some weaker registration language to get to the House floor. However, registration does not require builders to show any level of construction science knowledge, nor does it require a minimum level of job experience. In disputes with homebuilders, the commission could revoke a license only if the builder fails to pay a final judgment. There would be a fine process capped at $500 per violation. By comparison, land has a builder registration law, enforced by its attorney general, which requires bonding and includes fines of up to $5,000. Reggie , head of the Consumers Union Southwest Regional Office, said the bill just would put consumers through more hurdles and an additional three-month administrative process. "Every piece of this bill, you can tell, was made by builders," said. "The registration process has no real teeth. The commission can't really take disciplinary action, except for administrative action for fraud on a registration application and misappropriation of funds. But isn't misappropriation stealing, a criminal act?" Rep. Allan Ritter, D-Nederland, authored the bill. Co-authors include Phil King, R-Weatherford; Beverly Woolley, R-Houston; Gene Seamann, R-Corpus Christi; and Al , D-Houston. The Texas Association of Builders began drafting legislation last year in response to grass-roots efforts to get a fairer resolution process, and because state appeals courts were insisting that builders could not force homebuyers to waive state implied warranties of habitability. "My intention," King said, "is to take ambiguity out of the process. By codifying standards, homeowners and builders know what to expect."