When buying a home, you should consider several important considerations. Among them are finding competent representatives knowledgable in real estate and law to assist you. You should also be aware that the following provisions of law establish and protect your important rights as a homebuyer:
Consumer Credit Protection Act (1960) - Guarantees confidentiality of credit reports and allows consumers to correct inaccurate information in their reports.
Equal Credit Opportunity Act of 1975 (ECOA) - Prohibits the discrimination in any credit action based on race, sex, marital status, color, religion, age, handicap, or national origin.
Equal Housing Opportunity - Prohibits housing discrimination based on race, sex, marital status, color, religion, age, handicap, family status or national origin.
Fair Housing Act - Prohibits the discrimination based on race, sex, marital status, handicap, or national origin in any real estate transaction.
Federal Consumer Credit Protection Act (commonly known as the Truth in Lending Act) (1969) - Requires that lenders disclose the actual terms and conditions of a loan before an applicant commits to the loan.
Home Mortgage Disclosure Act (1975) - Provides information to help determine whether public institutions are assisting the housing needs of their communities and neighborhoods.
Real Estate Settlement Procedures Act of 1974 (RESPA) - Encouraging homeownership through consumer protection, this act regulates certain lending actions related to closing/settlement. Some of its provisions are:
RESPA requires lenders to provide buyers a good faith estimate of the cost of the loan, including disclosure of the Annual Percentage Rate (APR). RESPA requires lenders to provide buyers with general information about settlement costs. Lenders must provide buyers a copy of the Mortgage Servicing Disclosure Statement, regarding loan servicing and transfer. Within three days after receiving the loan application, lenders must provide the buyer with an estimate of closing costs and monthly payments. RESPA provides the borrower the opportunity to see the HUD-1 Settlement Statement one day before the actual settlement. Prohibits kickbacks between Real Estate professionals for referrals and prohibits fee-splitting and receiving unearned fees for services not rendered.
Regulation B of the Consumer Credit Protection Act - Requires lenders to inform potential borrowers of any adverse actions taken on their loan applications.
Regulation Z - Includes regulations related to consumer credit disclosures identified in the Consumer Credit Protection Act.
Veterans Housing Benefits Act (1978) - Increases the housing benefits for eligible veterans including increased loan amounts.
Trey Wilson is an experienced real estate lawyer in San Antonio. In addition, he is a licensed real estate agent, and is intimately familiar with the laws affecting buyers and sellers of real property in Texas. Trey Wilson was voted as one of San Antonio's best real estate litigation lawyers in San Antonio in August 2008.
Chủ Nhật, 31 tháng 8, 2008
NEW LAW -- EFFECTICE 9/1/08 -- MANDATORY INSPECTIONS & STANDARDS FOR HOMES OUTSIDE CITY LIMITS
As of September 1, 2008, the Texas Residential Construction Commission Act (Subtitle F; Chapter 446) requires that residential construction completed by builders and remodelers in unincorporated areas or in areas not subject to municipal inspections (commonly called "in the county") must have a minimum of three inspections conducted by a fee inspector. The builder/remodeler is responsible for hiring a fee inspector. The three required minimum inspections are a foundation inspection, a framing, mechanical and delivery systems inspection and a final inspection.
What if a builder starts work before September 1, 2008? Are some of the inspections required?The new county inspection requirements apply to new construction or remodeling projects that begin on or after September 1, 2008. If construction starts on a home before September 1, 2008, the builder/remodeler is exempt from completing the inspections.
Who can be a fee inspector?
A fee inspector can be an actively licensed professional engineer, a licensed architect, a professional inspector licensed by the Texas Real Estate Commission or a Texas Residential Construction Commission certified third-party inspector.
What is the process for a fee inspector to document the three required inspections? What form is needed?Fee inspectors must fill out the required Contracted Inspections information in order to submit an inspection on the commission’s online County Inspection Certification System. The Contracted Inspections information is the only information that an inspector needs to submit for an inspection. To submit a report, an inspector first must secure a builder-assigned project number; an inspector can submit reports only for projects that pass inspection. Once the information has been submitted, an emailed receipt confirmation will be sent to the builder/remodeler informing them that an inspection has been completed. Fee inspectors should not submit documentation supporting the inspection findings to the commission.
What are the code requirements for these required inspections?
The statewide residential building codes are the 2000 International Residential Code (IRC) and the 1999 National Electrical Code (NEC). These, however, may be amended in local jurisdictions if they have updated the code provisions. The code that applies to an unincorporated area is the same code adopted by the county seat. If the county seat has not adopted an updated version of the code, then the 2000 IRC applies.
Will the Texas Residential Construction Commission audit inspectors?
While the commission does not audit fee inspectors, builders and remodelers must keep inspection records. The commission randomly conducts audits on builders and remodelers once a year to verify inspection documentation ensuring that inspections were performed according to applicable codes and commission rules. However, if audit results show that a fee inspector repeatedly did not comply with the commission rules or apply the applicable code to construction projects inspected, the TRCC may withdraw the fee inspector’s registration.
What are the penalties if a builder does not obtain these inspections?
The commission can take disciplinary action against a builder or remodeler who fails to comply with the inspection requirements. It is the builder and remodeler’s responsibility to secure the three required inspections for qualified residential construction projects in unincorporated areas or areas not subject to municipal inspections.
What if a builder starts work before September 1, 2008? Are some of the inspections required?The new county inspection requirements apply to new construction or remodeling projects that begin on or after September 1, 2008. If construction starts on a home before September 1, 2008, the builder/remodeler is exempt from completing the inspections.
Who can be a fee inspector?
A fee inspector can be an actively licensed professional engineer, a licensed architect, a professional inspector licensed by the Texas Real Estate Commission or a Texas Residential Construction Commission certified third-party inspector.
What is the process for a fee inspector to document the three required inspections? What form is needed?Fee inspectors must fill out the required Contracted Inspections information in order to submit an inspection on the commission’s online County Inspection Certification System. The Contracted Inspections information is the only information that an inspector needs to submit for an inspection. To submit a report, an inspector first must secure a builder-assigned project number; an inspector can submit reports only for projects that pass inspection. Once the information has been submitted, an emailed receipt confirmation will be sent to the builder/remodeler informing them that an inspection has been completed. Fee inspectors should not submit documentation supporting the inspection findings to the commission.
What are the code requirements for these required inspections?
The statewide residential building codes are the 2000 International Residential Code (IRC) and the 1999 National Electrical Code (NEC). These, however, may be amended in local jurisdictions if they have updated the code provisions. The code that applies to an unincorporated area is the same code adopted by the county seat. If the county seat has not adopted an updated version of the code, then the 2000 IRC applies.
Will the Texas Residential Construction Commission audit inspectors?
While the commission does not audit fee inspectors, builders and remodelers must keep inspection records. The commission randomly conducts audits on builders and remodelers once a year to verify inspection documentation ensuring that inspections were performed according to applicable codes and commission rules. However, if audit results show that a fee inspector repeatedly did not comply with the commission rules or apply the applicable code to construction projects inspected, the TRCC may withdraw the fee inspector’s registration.
What are the penalties if a builder does not obtain these inspections?
The commission can take disciplinary action against a builder or remodeler who fails to comply with the inspection requirements. It is the builder and remodeler’s responsibility to secure the three required inspections for qualified residential construction projects in unincorporated areas or areas not subject to municipal inspections.
FAQ - Home Registration with the TRCC
When did the home registration requirement begin?
Since January 1, 2004, the law has required all home builders and remodelers in Texas to register each qualifying home construction project with the commission.
What projects does the builder have to register?
The registered builder/remodeler must complete a Home Registration for: new homes; residential remodeling projects involving interior renovations exceeding $10,000; and, residential material improvements (a modification to the home that either increases or decreases the home's total square footage of living space and that also alters a perimeter wall, foundation or roof; e.g. room additions). For new homes built on the builder's lot, you must register and pay the fee no later than the 15th day of the following month in which the title transferred from builder to homeowner. If no title is transferred (e.g. home built on homeowner's lot or remodeling project), you must file the registration and pay the fee paid no later than the 15th day after: substantial completion of the project or upon the issuance of a certificate of occupancy or completion. You can register homes online.
What is the home registration fee?
The fee to register a home online is $25. If you use the paper registration form, it costs $40 per project. If your company registered more than 25 homes with the commission in the preceding calendar year, you must use the online registration system or file a waiver request in order to submit paper registration forms. You can pay the fee with cash, check, money order or credit card.
How long is the home registration process?
It can take up to 15 days, although online registration occurs overnight. The commission processes applications in the order received and there are no expedited methods of registration.
Are any residential construction projects exempt from home registration?
A home built by an individual (either alone or with the help of the individual's employees or independent contractors) and used as the primary residence for at least one year after completion or substantial completion of construction is exempt from registration. Home improvement projects that do not change the square footage of the home's living space or an interior renovation that does not exceed $10,000 during a 12-month period are also exempt. Please note that the $10,000 threshold only applies to interior renovations, not material improvement projects.
Why do builders have to register their projects?
The law requires that builders register all qualified projects. Registration helps to identify newly constructed homes and remodel projects that are subject to the inspection process and that fall under limited statutory warranty and building and performance standards. The limited statutory warranty and building and performance standards apply to construction started after June 1, 2005.
How will the TRCC enforce the home registration process?The commission has the authority to levy severe penalties against builders or remodelers who fail to register a home. Sanctions can range from disciplinary actions, such as a reprimand, a suspension or revocation of a builder or remodeler registration to administrative penalties, which can reach as high as $10,000 per violation.
Can a person building his/her own home register the home without registering as a builder?Individuals who build their own home and plan to live there for at least one year do not have to register as a builder and do not have to register their home. That home also is exempt from the state-sponsored inspection and dispute resolution process. If the owner sells the home within ten years of completion, you must disclose in the contract that the home or project is not subject to the minimum statutory warranties and performance standards.
Does the commission ever refund registration fees?
The commission only refunds registration fees that involve commission errors/typos. According to policy, the commission generally does not issue refunds due to builder/remodeler registration errors. Refunds may take up to six weeks to process.
What types of home construction projects require registration?
Builders/remodelers must register all single family homes, duplexes, certain townhomes and qualifying residential remodeling projects.
What is the definition of a townhome?
A townhome is a single-family dwelling unit constructed in a group of three or more attached dwelling units in which each unit extends from foundation to roof and with open space on at least two sides not more than three stories in height with a separate means of ingress and egress.
Since January 1, 2004, the law has required all home builders and remodelers in Texas to register each qualifying home construction project with the commission.
What projects does the builder have to register?
The registered builder/remodeler must complete a Home Registration for: new homes; residential remodeling projects involving interior renovations exceeding $10,000; and, residential material improvements (a modification to the home that either increases or decreases the home's total square footage of living space and that also alters a perimeter wall, foundation or roof; e.g. room additions). For new homes built on the builder's lot, you must register and pay the fee no later than the 15th day of the following month in which the title transferred from builder to homeowner. If no title is transferred (e.g. home built on homeowner's lot or remodeling project), you must file the registration and pay the fee paid no later than the 15th day after: substantial completion of the project or upon the issuance of a certificate of occupancy or completion. You can register homes online.
What is the home registration fee?
The fee to register a home online is $25. If you use the paper registration form, it costs $40 per project. If your company registered more than 25 homes with the commission in the preceding calendar year, you must use the online registration system or file a waiver request in order to submit paper registration forms. You can pay the fee with cash, check, money order or credit card.
How long is the home registration process?
It can take up to 15 days, although online registration occurs overnight. The commission processes applications in the order received and there are no expedited methods of registration.
Are any residential construction projects exempt from home registration?
A home built by an individual (either alone or with the help of the individual's employees or independent contractors) and used as the primary residence for at least one year after completion or substantial completion of construction is exempt from registration. Home improvement projects that do not change the square footage of the home's living space or an interior renovation that does not exceed $10,000 during a 12-month period are also exempt. Please note that the $10,000 threshold only applies to interior renovations, not material improvement projects.
Why do builders have to register their projects?
The law requires that builders register all qualified projects. Registration helps to identify newly constructed homes and remodel projects that are subject to the inspection process and that fall under limited statutory warranty and building and performance standards. The limited statutory warranty and building and performance standards apply to construction started after June 1, 2005.
How will the TRCC enforce the home registration process?The commission has the authority to levy severe penalties against builders or remodelers who fail to register a home. Sanctions can range from disciplinary actions, such as a reprimand, a suspension or revocation of a builder or remodeler registration to administrative penalties, which can reach as high as $10,000 per violation.
Can a person building his/her own home register the home without registering as a builder?Individuals who build their own home and plan to live there for at least one year do not have to register as a builder and do not have to register their home. That home also is exempt from the state-sponsored inspection and dispute resolution process. If the owner sells the home within ten years of completion, you must disclose in the contract that the home or project is not subject to the minimum statutory warranties and performance standards.
Does the commission ever refund registration fees?
The commission only refunds registration fees that involve commission errors/typos. According to policy, the commission generally does not issue refunds due to builder/remodeler registration errors. Refunds may take up to six weeks to process.
What types of home construction projects require registration?
Builders/remodelers must register all single family homes, duplexes, certain townhomes and qualifying residential remodeling projects.
What is the definition of a townhome?
A townhome is a single-family dwelling unit constructed in a group of three or more attached dwelling units in which each unit extends from foundation to roof and with open space on at least two sides not more than three stories in height with a separate means of ingress and egress.
FAQ – State Inspection Process (formally called the State-Sponsored Inspection and Dispute Resolution Process, or SIRP)
What is the state inspection process?
During a state inspection, an independent third-party inspector looks at alleged defects that are under warranty. The state inspection process provides a homeowner and builder/remodeler a final report issued by a professional engineer, architect or certified inspector. The findings in the report carry legal weight if any future arbitration, mediation or litigation occurs. Since the report can be used in a legal action, the costs for expert witness fees should be reduced greatly if not eliminated.
The commission uses professional third-party inspectors. The independent inspector compares the alleged defect to the building and performance standards. The commission uses three types of inspectors. One type handles workmanship and materials issues. Another type handles structural issues. If there are both structural issues and unrelated workmanship and materials issues, the commission will assign an inspector who is qualified to inspect both types of alleged defects. If the third-party inspector finds a problem, the inspector will recommend a repair. Either person may appeal the inspector’s report.
If a defect is found, the law expects your builder/remodeler to make a repair offer. The offer can be based on the inspector’s report or those of the appeal panel, if the report was appealed. You can accept or reject any offer your builder/remodeler makes.
If you still can’t resolve the dispute after the required state inspection, either person can still pursue other legal remedies.
How does the state inspection process work?
The process actually begins before anyone submits an inspection request to the commission. A homeowner who believes their home has post-construction defects must submit a written notice of alleged defects to the builder or remodeler at least 30 days before the inspection process can begin. Once the homeowner has notified the builder of alleged construction defects, the homeowner must give the builder a reasonable opportunity to inspect the alleged defects.
Typically, a homeowner who is not satisfied with the builder’s response to the written notice of the alleged defects files an inspection request. However, builders can file inspection requests, too. In nearly all cases, builders and homeowners must use the inspection process before turning to other civil remedies. A homeowner is not required to use the inspection process before pursuing civil remedies if a builder was not properly registered when the parties entered the construction contract or if the commission has revoked a builder’s registration.
Once the commission receives an inspection request, commission staff determines if the request is eligible. If the request is eligible, the commission assigns a third-party independent inspector to inspect the alleged defect(s) described in the request. The commission appoints third-party inspectors on a rotating basis from a list of certified third-party inspectors. The third-party inspector gathers information from the homeowner and the builder. The inspector then conducts an inspection to evaluate each alleged construction defect to determine whether the home is in compliance with applicable building standards.
Either the homeowner or the builder can appeal to the commission for a review of the third-party inspector's findings by a panel of state inspectors. At the end of the inspection process, the builder or remodeler should submit the homeowner a written offer of settlement, pursuant to the Residential Construction Liability Act (RCLA). Then the settlement provisions of RCLA come into play. If there is no satisfactory settlement, the homeowner can then pursue other legal remedies.
Does my builder have to fix my house if a defect is confirmed?
For inspection requests filed after September 1, 2007, the statute authorizes the commission to fine any builder that repeatedly fails to make an offer of repair after a commission-appointed inspector has affirmed that there are construction defects. The commission can also fine any builder that repeatedly fails to make good on a repair offer.
Will the inspector sit down with the builder and homeowner to help settle differences?No. The inspector is not in a position to mediate with a homeowner and builder. While the commission has no formal mediation process to offer, it does employ a team of ombudsmen. The commission’s ombudsmen work with the homeowner and builder to help achieve a resolution to a dispute.
Can my builder file an inspection request?
The inspection process is available to builders and consumers.
My builder requested an inspection. Do I have to participate?
The commission cannot make a homeowner participate in the inspection process if the builder files an inspection request. On the other hand, if there is a dispute over an alleged defect that is in its warranty period, the statute requires the parties involved to proceed through the inspection process before accessing arbitration or the court system. Therefore, the penalty for a homeowner who refuses to participate in the process is that according to the law a homeowner cannot pursue other legal action against the builder arising from alleged defects if the homeowner does not first go through the inspection process.
If my builder makes a repair, how do I know they did it correctly?
When a builder completes a repair as a result of the inspection process, the builder must rehire the same inspector who initially inspected the alleged defect to inspect the repair.
Can the builder provide a monetary offer instead of a repair offer?
Yes, although the builder is not required to do so.
Can I pick the subcontractor that’s going to fix my house?
You are not obligated to accept a builder’s repair offer. If you refuse and are doing so because you don’t wish to use a particular subcontractor, let the commission and builder know. To achieve a resolution, the builder may offer to let you choose your subcontractor, choose from a list of potential subcontractors or allow you to present a list from which the builder can choose.
What will it cost a homeowner to file an inspection request?
Statute requires that the party filing an inspection request must pay a fee associated with the third party inspection. The fee for a homeowner to start the inspection process is $250. The commission reimburses the homeowner, however, if the third-party inspector's findings confirm even a single defect. The commission may also reduce or waive fees for those who show financial need. If the inspector confirms a defect, the builder/remodeler is responsible for the actual inspection fee.
If a builder/remodeler requests the inspection, the fee for a workmanship and materials inspection is $450, a structural inspection is $450, and a joint inspection of a structural issue and an unrelated workmanship and materials issue is $800.
How does a homeowner file an inspection request for a workmanship and materials or a structural defect-related issue?Fill out the Inspection Request form and mail the form to: P.O. Box 13144; Austin, Texas 78711-3144 or by fax at (512) 463-9507.
What is the deadline for a homeowner or builder to submit an inspection request?
You must submit the request on or before: the second anniversary of the date the claimed construction defect was discovered, but not later than the 90th day after the date the applicable warranty period expires; and not later than the tenth anniversary of the initial title transfer from the builder to the owner of the home. If there is no title transfer, you must submit the request by the tenth anniversary of the date on which the contract for construction of an improvement was entered into.
Does the homeowner have to let the builder inspect the alleged construction defects before making an inspection request?The homeowner must notify the builder in writing of each alleged construction defect at least 30 days before submitting an inspection request to the commission. The homeowner also must provide the builder a reasonable opportunity to inspect the alleged defect.
What information must the request include?
The request must provide a fairly detailed description of each alleged construction defect. The request must include the following information (if known or available): the amount of known out-of pocket expenses and engineering or consulting fees the homeowner incurred in connection with each alleged construction defect; if there is one, a copy of the contract between the homeowner and the builder; evidence of the cause and nature of each alleged defect including the nature and extent of repairs necessary to remedy the defect (for example, expert reports, photographs and videotapes); the signed contract and written warranty (if one was provided); proof of 30-days notice provided to the builder; and the name of anyone who inspected the home in connection with the alleged defects on behalf of the party submitting the request.
A requestor does not have to have this information to submit a request to the commission. Required inspection fees offset the cost of the third-party inspector and must be submitted with the request.
If a homeowner goes through the process, can the homeowner still take legal action against a builder?
Yes. At the end of the inspection process, the third-party inspector issues a report that identifies if there is a construction defect that the builder should address. If the homeowner is not satisfied, he or she can pursue arbitration or litigation — depending upon whether the homeowner's contract with the builder contains a binding arbitration clause. The inspector's report creates a rebuttable presumption and can be part of the record in any subsequent legal action. Basically, a rebuttable presumption means that the inspector’s findings carry a lot of weight if future legal action is necessary.
If a residential construction dispute results in an arbitration award and that award is filed in a court of competent jurisdiction, the filer must file a summary of the award with the commission no later than 30 days after the award is filed as a judgment.
I don’t agree with what the inspector’s report says. Can I appeal?
Yes, you can file an appeal. In fact, either party may appeal the inspector’s findings or recommendations on or before the 15th day after receiving the inspector’s report. A three-member panel of state inspectors (commission employees) considers the appeals. The appeal panel reviews the third-party inspector’s recommendation and may either approve, reject, modify or remand the inspection to the third-party inspector for further action. The panel also reviews the inspection process to make sure it complies with the law.
What can I appeal?
Essentially, you can appeal the findings and conclusions of the inspector, the standard applied or the repair recommendation on or before the 15th day after receiving the inspector’s report. The appeal panel cannot review any new material or information that was not made a part of the record. A party to an inspection request must provide all of its supporting documentation and any background, general or additional information to the third-party inspector for consideration when the inspector writes the report. The appeal panel reviews the inspector’s report and the record of material he considered or had available to consider when he wrote the report to determine if the inspector’s findings and recommendations are supported by the evidence.
I think my builder is using shoddy materials during construction. Can I request a state inspection immediately?
The commission’s inspection process only is available when what is at issue is an alleged post-construction defect. However, a homeowner should address any concerns with the builder as soon as they arise. Many times, your city building official can help.
After the homeowner receives the title to the house from the builder, the homeowner can submit an inspection request to the commission after providing the builder 30-days notice of the alleged construction defects and giving the builder an opportunity to respond. Commission staff will review each inspection request to determine whether the alleged construction defect is eligible. Only allegedly failing items that an inspector can view without removing wall coverings or destroying the fit and finish of a home are eligible. However, if one of the parties is willing to pay for the removal and replacement of wall coverings, or other destructive testing, the inspector can use the test results.
Does the inspection process include personal injury claims?
No, the inspection process applies only to post-construction defects, not to personal injury claims. A homeowner is free to pursue those claims through other legal venues.
Can I hire an attorney to represent me during the inspection process?
Hiring an attorney is optional. Anyone involved in the inspection process may seek legal representation. Most builders have the resources and foresight to hire an attorney. Owners should hire a lawyer with knowledge and experience of the TRCC process and the laws concerning residential construction. San Antonio Trey Wilson has served as the homeowners' lawyer in numerous TRCC complaints, and in lawsuits against builders. Trey Wilson is an experienced lawyer with a history of helping homeowners achieve resolutions in defective construction claims, and in securing releases of improperly filed construction liens. Trey Wilson is the principal lawyer of R L Wilson, P.C. Law Firm in San Antonio. He may be reached at 210/223-4100 or www.sa-law.com
During a state inspection, an independent third-party inspector looks at alleged defects that are under warranty. The state inspection process provides a homeowner and builder/remodeler a final report issued by a professional engineer, architect or certified inspector. The findings in the report carry legal weight if any future arbitration, mediation or litigation occurs. Since the report can be used in a legal action, the costs for expert witness fees should be reduced greatly if not eliminated.
The commission uses professional third-party inspectors. The independent inspector compares the alleged defect to the building and performance standards. The commission uses three types of inspectors. One type handles workmanship and materials issues. Another type handles structural issues. If there are both structural issues and unrelated workmanship and materials issues, the commission will assign an inspector who is qualified to inspect both types of alleged defects. If the third-party inspector finds a problem, the inspector will recommend a repair. Either person may appeal the inspector’s report.
If a defect is found, the law expects your builder/remodeler to make a repair offer. The offer can be based on the inspector’s report or those of the appeal panel, if the report was appealed. You can accept or reject any offer your builder/remodeler makes.
If you still can’t resolve the dispute after the required state inspection, either person can still pursue other legal remedies.
How does the state inspection process work?
The process actually begins before anyone submits an inspection request to the commission. A homeowner who believes their home has post-construction defects must submit a written notice of alleged defects to the builder or remodeler at least 30 days before the inspection process can begin. Once the homeowner has notified the builder of alleged construction defects, the homeowner must give the builder a reasonable opportunity to inspect the alleged defects.
Typically, a homeowner who is not satisfied with the builder’s response to the written notice of the alleged defects files an inspection request. However, builders can file inspection requests, too. In nearly all cases, builders and homeowners must use the inspection process before turning to other civil remedies. A homeowner is not required to use the inspection process before pursuing civil remedies if a builder was not properly registered when the parties entered the construction contract or if the commission has revoked a builder’s registration.
Once the commission receives an inspection request, commission staff determines if the request is eligible. If the request is eligible, the commission assigns a third-party independent inspector to inspect the alleged defect(s) described in the request. The commission appoints third-party inspectors on a rotating basis from a list of certified third-party inspectors. The third-party inspector gathers information from the homeowner and the builder. The inspector then conducts an inspection to evaluate each alleged construction defect to determine whether the home is in compliance with applicable building standards.
Either the homeowner or the builder can appeal to the commission for a review of the third-party inspector's findings by a panel of state inspectors. At the end of the inspection process, the builder or remodeler should submit the homeowner a written offer of settlement, pursuant to the Residential Construction Liability Act (RCLA). Then the settlement provisions of RCLA come into play. If there is no satisfactory settlement, the homeowner can then pursue other legal remedies.
Does my builder have to fix my house if a defect is confirmed?
For inspection requests filed after September 1, 2007, the statute authorizes the commission to fine any builder that repeatedly fails to make an offer of repair after a commission-appointed inspector has affirmed that there are construction defects. The commission can also fine any builder that repeatedly fails to make good on a repair offer.
Will the inspector sit down with the builder and homeowner to help settle differences?No. The inspector is not in a position to mediate with a homeowner and builder. While the commission has no formal mediation process to offer, it does employ a team of ombudsmen. The commission’s ombudsmen work with the homeowner and builder to help achieve a resolution to a dispute.
Can my builder file an inspection request?
The inspection process is available to builders and consumers.
My builder requested an inspection. Do I have to participate?
The commission cannot make a homeowner participate in the inspection process if the builder files an inspection request. On the other hand, if there is a dispute over an alleged defect that is in its warranty period, the statute requires the parties involved to proceed through the inspection process before accessing arbitration or the court system. Therefore, the penalty for a homeowner who refuses to participate in the process is that according to the law a homeowner cannot pursue other legal action against the builder arising from alleged defects if the homeowner does not first go through the inspection process.
If my builder makes a repair, how do I know they did it correctly?
When a builder completes a repair as a result of the inspection process, the builder must rehire the same inspector who initially inspected the alleged defect to inspect the repair.
Can the builder provide a monetary offer instead of a repair offer?
Yes, although the builder is not required to do so.
Can I pick the subcontractor that’s going to fix my house?
You are not obligated to accept a builder’s repair offer. If you refuse and are doing so because you don’t wish to use a particular subcontractor, let the commission and builder know. To achieve a resolution, the builder may offer to let you choose your subcontractor, choose from a list of potential subcontractors or allow you to present a list from which the builder can choose.
What will it cost a homeowner to file an inspection request?
Statute requires that the party filing an inspection request must pay a fee associated with the third party inspection. The fee for a homeowner to start the inspection process is $250. The commission reimburses the homeowner, however, if the third-party inspector's findings confirm even a single defect. The commission may also reduce or waive fees for those who show financial need. If the inspector confirms a defect, the builder/remodeler is responsible for the actual inspection fee.
If a builder/remodeler requests the inspection, the fee for a workmanship and materials inspection is $450, a structural inspection is $450, and a joint inspection of a structural issue and an unrelated workmanship and materials issue is $800.
How does a homeowner file an inspection request for a workmanship and materials or a structural defect-related issue?Fill out the Inspection Request form and mail the form to: P.O. Box 13144; Austin, Texas 78711-3144 or by fax at (512) 463-9507.
What is the deadline for a homeowner or builder to submit an inspection request?
You must submit the request on or before: the second anniversary of the date the claimed construction defect was discovered, but not later than the 90th day after the date the applicable warranty period expires; and not later than the tenth anniversary of the initial title transfer from the builder to the owner of the home. If there is no title transfer, you must submit the request by the tenth anniversary of the date on which the contract for construction of an improvement was entered into.
Does the homeowner have to let the builder inspect the alleged construction defects before making an inspection request?The homeowner must notify the builder in writing of each alleged construction defect at least 30 days before submitting an inspection request to the commission. The homeowner also must provide the builder a reasonable opportunity to inspect the alleged defect.
What information must the request include?
The request must provide a fairly detailed description of each alleged construction defect. The request must include the following information (if known or available): the amount of known out-of pocket expenses and engineering or consulting fees the homeowner incurred in connection with each alleged construction defect; if there is one, a copy of the contract between the homeowner and the builder; evidence of the cause and nature of each alleged defect including the nature and extent of repairs necessary to remedy the defect (for example, expert reports, photographs and videotapes); the signed contract and written warranty (if one was provided); proof of 30-days notice provided to the builder; and the name of anyone who inspected the home in connection with the alleged defects on behalf of the party submitting the request.
A requestor does not have to have this information to submit a request to the commission. Required inspection fees offset the cost of the third-party inspector and must be submitted with the request.
If a homeowner goes through the process, can the homeowner still take legal action against a builder?
Yes. At the end of the inspection process, the third-party inspector issues a report that identifies if there is a construction defect that the builder should address. If the homeowner is not satisfied, he or she can pursue arbitration or litigation — depending upon whether the homeowner's contract with the builder contains a binding arbitration clause. The inspector's report creates a rebuttable presumption and can be part of the record in any subsequent legal action. Basically, a rebuttable presumption means that the inspector’s findings carry a lot of weight if future legal action is necessary.
If a residential construction dispute results in an arbitration award and that award is filed in a court of competent jurisdiction, the filer must file a summary of the award with the commission no later than 30 days after the award is filed as a judgment.
I don’t agree with what the inspector’s report says. Can I appeal?
Yes, you can file an appeal. In fact, either party may appeal the inspector’s findings or recommendations on or before the 15th day after receiving the inspector’s report. A three-member panel of state inspectors (commission employees) considers the appeals. The appeal panel reviews the third-party inspector’s recommendation and may either approve, reject, modify or remand the inspection to the third-party inspector for further action. The panel also reviews the inspection process to make sure it complies with the law.
What can I appeal?
Essentially, you can appeal the findings and conclusions of the inspector, the standard applied or the repair recommendation on or before the 15th day after receiving the inspector’s report. The appeal panel cannot review any new material or information that was not made a part of the record. A party to an inspection request must provide all of its supporting documentation and any background, general or additional information to the third-party inspector for consideration when the inspector writes the report. The appeal panel reviews the inspector’s report and the record of material he considered or had available to consider when he wrote the report to determine if the inspector’s findings and recommendations are supported by the evidence.
I think my builder is using shoddy materials during construction. Can I request a state inspection immediately?
The commission’s inspection process only is available when what is at issue is an alleged post-construction defect. However, a homeowner should address any concerns with the builder as soon as they arise. Many times, your city building official can help.
After the homeowner receives the title to the house from the builder, the homeowner can submit an inspection request to the commission after providing the builder 30-days notice of the alleged construction defects and giving the builder an opportunity to respond. Commission staff will review each inspection request to determine whether the alleged construction defect is eligible. Only allegedly failing items that an inspector can view without removing wall coverings or destroying the fit and finish of a home are eligible. However, if one of the parties is willing to pay for the removal and replacement of wall coverings, or other destructive testing, the inspector can use the test results.
Does the inspection process include personal injury claims?
No, the inspection process applies only to post-construction defects, not to personal injury claims. A homeowner is free to pursue those claims through other legal venues.
Can I hire an attorney to represent me during the inspection process?
Hiring an attorney is optional. Anyone involved in the inspection process may seek legal representation. Most builders have the resources and foresight to hire an attorney. Owners should hire a lawyer with knowledge and experience of the TRCC process and the laws concerning residential construction. San Antonio Trey Wilson has served as the homeowners' lawyer in numerous TRCC complaints, and in lawsuits against builders. Trey Wilson is an experienced lawyer with a history of helping homeowners achieve resolutions in defective construction claims, and in securing releases of improperly filed construction liens. Trey Wilson is the principal lawyer of R L Wilson, P.C. Law Firm in San Antonio. He may be reached at 210/223-4100 or www.sa-law.com
Mandatory County Code Inspections -- Being Outside the City Limits No Longer Enables Faulty Construction
Big changes are in effect for all homebuilders and remodelers who build in the unincorporated areas of the state. As of September 1, 2008, all homes constructed in unincorporated areas, or areas not subject to municipal inspections, must undergo a minimum of three inspections to ensure building code compliance.
Legislation was passed in 2001, making the International Residential Code (“IRC”) the municipal residential building code in the state. Then, in 2003, the Texas Legislature mandated that all homes in the state, including those in the unincorporated areas, be built to IRC standards. Finally, last session saw the passage of legislation requiring that all homes in the unincorporated areas, as well as areas without
municipal inspections, must be inspected for code compliance beginning September of
this year.
A minimum of three inspections will be performed by a third party inspector, or Fee
Inspector, and must occur at the following stages of construction:
1. foundation, prior to the placement of concrete;
2. framing and mechanical systems prior to being covered with sheetrock or other
interior wall covering; and
3. final inspection when the home is completed.
The builder/remodeler is responsible for contracting with the Fee Inspector, which
includes the following pool: (1) a licensed engineer; (2) a registered architect; (3) a professional inspector licensed by the Texas Real Estate Commission—a TREC
inspector; or (4) a third-party inspector approved by the Texas Residential Construction Commission (“TRCC”)—a TRCC code inspector.
It is important to note that the builder/remodeler may use the same or different Fee Inspector for the three required inspections, and that the builder/remodeler, has the ability to hire the Fee Inspector of his choice and is not forced to use any one category of Fee Inspectors.
The TRCC will create a unique numbering system using a builder’s registration number
for all construction subject to the new inspections. This number will be used to track the inspections. The fee inspectors will electronically report the completion of an inspection using the unique number and receive a verification document showing the inspections have been satisfactorily completed. The purpose of this document is to show that the home has passed these required inspections so as not to hold up closings.
Within 30 days thereafter of the registration of the home, the homeowner and builder will receive an official "Certificate of Completion."
For a remodel, the inspections will only be required if necessary based on the scope of work. The applicable building code will be the building code in effect for the area, as currently mandated by the TRCC Act. The applicable building code for residential construction located in an unincorporated area not in a city’s ETJ is the IRC as adopted and amended by the county seat of the county in which the construction is located. If the county seat has not adopted and/or amended the IRC, the applicable building code is the IRC as it existed on May 1, 2001. The applicable building codes as described above do not constitute a change in the rules or the statute.
Inspection records and documents will not be turned over to the TRCC by the inspector or builder. However, the TRCC will conduct random audits of the inspection records, and builders must maintain those records for a minimum of five years.
After publishing the proposed rules on the subject and making some amendments to them
based on formal Texas Association of Builders (“TAB”) comments, the TRCC has
adopted the final Fee Inspector rules. To see a copy of the formal rules, please visit the Commission’s website at: http://www.trcc.state.tx.us/Inspectors/CountyInspections.asp
Legislation was passed in 2001, making the International Residential Code (“IRC”) the municipal residential building code in the state. Then, in 2003, the Texas Legislature mandated that all homes in the state, including those in the unincorporated areas, be built to IRC standards. Finally, last session saw the passage of legislation requiring that all homes in the unincorporated areas, as well as areas without
municipal inspections, must be inspected for code compliance beginning September of
this year.
A minimum of three inspections will be performed by a third party inspector, or Fee
Inspector, and must occur at the following stages of construction:
1. foundation, prior to the placement of concrete;
2. framing and mechanical systems prior to being covered with sheetrock or other
interior wall covering; and
3. final inspection when the home is completed.
The builder/remodeler is responsible for contracting with the Fee Inspector, which
includes the following pool: (1) a licensed engineer; (2) a registered architect; (3) a professional inspector licensed by the Texas Real Estate Commission—a TREC
inspector; or (4) a third-party inspector approved by the Texas Residential Construction Commission (“TRCC”)—a TRCC code inspector.
It is important to note that the builder/remodeler may use the same or different Fee Inspector for the three required inspections, and that the builder/remodeler, has the ability to hire the Fee Inspector of his choice and is not forced to use any one category of Fee Inspectors.
The TRCC will create a unique numbering system using a builder’s registration number
for all construction subject to the new inspections. This number will be used to track the inspections. The fee inspectors will electronically report the completion of an inspection using the unique number and receive a verification document showing the inspections have been satisfactorily completed. The purpose of this document is to show that the home has passed these required inspections so as not to hold up closings.
Within 30 days thereafter of the registration of the home, the homeowner and builder will receive an official "Certificate of Completion."
For a remodel, the inspections will only be required if necessary based on the scope of work. The applicable building code will be the building code in effect for the area, as currently mandated by the TRCC Act. The applicable building code for residential construction located in an unincorporated area not in a city’s ETJ is the IRC as adopted and amended by the county seat of the county in which the construction is located. If the county seat has not adopted and/or amended the IRC, the applicable building code is the IRC as it existed on May 1, 2001. The applicable building codes as described above do not constitute a change in the rules or the statute.
Inspection records and documents will not be turned over to the TRCC by the inspector or builder. However, the TRCC will conduct random audits of the inspection records, and builders must maintain those records for a minimum of five years.
After publishing the proposed rules on the subject and making some amendments to them
based on formal Texas Association of Builders (“TAB”) comments, the TRCC has
adopted the final Fee Inspector rules. To see a copy of the formal rules, please visit the Commission’s website at: http://www.trcc.state.tx.us/Inspectors/CountyInspections.asp
Homeowners losing fights with builders
Article by Jennifer Hiller of the San Antonio Express News:
Hoses twist and snake through Jonathan Steiner's home. The makeshift plumbing lines run beneath furniture, across the living room and into the garage, where they block that door from closing completely. Air conditioning leaks out while bugs crawl in. The hoses were supposed to be a temporary fix when the plumbing system failed and sprung leaks all over the house.
That was more than two years ago.
After plumbers told Steiner the entire system needed replacing, the physical therapist couldn't get his builder to make repairs in his four-year-old brick home, located in the Woodridge neighborhood near USAA. So Steiner turned to the state agency the Legislature created to resolve disputes between homeowners and homebuilders. It didn't help.
The Texas Residential Construction Commission agreed the builder is responsible for the plumbing fiasco, but the agency can't force the company to fix it. That disconnect is one reason the Sunset Advisory Commission staff this month recommended abolishing the agency.
The TRCC is up for reauthorization by the Legislature next year. And the staff of the Sunset Commission, the legislative body charged with identifying and eliminating waste in government agencies, is the latest critic of the TRCC.
Homeowners have to go through the process before going to court, but don't trust the agency, the staff report said. “No other regulatory agency has a program with such a potentially devastating effect on consumers' ability to seek their own remedies,” it said.
Documents obtained under the Texas Public Information Act and interviews with more than four dozen San Antonio-area homeowners or their attorneys show a wide gulf exists between having the TRCC rule in a homeowner's favor and in actually getting a builder to repair shoddy construction. Of the homeowners interviewed over the past 18months, 27 people had builders who ignored needed repairs even after independent inspectors found construction defects in the home. Just 14 people had their homes repaired or had settled with the builder.
A handful of homeowners were involved in lawsuits and were legally prevented from disclosing settlement terms or said they still were working through the dispute resolution process. Three other TRCC decisions were unclear based on incomplete paperwork provided by the agency. And three homeowners had a TRCC ruling that didn't find construction defects in their homes, although in one of those cases the builder made the repairs anyway.
Statewide, only 12 percent of cases where the state has sent in inspectors to review alleged defects have resulted in a “satisfactory offer or repair or compensation over the life of the program,” according to last week's Sunset Commission report. “The remaining 88 percent of reported cases are pursued by one party or the other using the legal system — the very outcome the process was enacted to prevent,” the report said.“That's not a good batting average,” said Kendall County resident Joseph Bartoloni, who complained to the agency in 2006 when his builder would not repair problems or complete work on his custom home. He had to make the repairs himself. “I don't know how much the building community respects the TRCC. My builder blew it off.”
The process
The Legislature created the TRCC in 2003 as a way for homeowners and builders to resolve disputes without going through the expense of a lawsuit. The TRCC registers homebuilders and remodelers, and provides homebuyers an online search tool for researching homebuilders.
Homeowners who have a disputes with their builders can't sue until they have tried the agency's dispute-resolution process, which involves putting any alleged defects in writing and having an independent inspector look at the house. If the builder or homeowner disagrees with the inspector, either can appeal to a TRCC panel.
But since its inception, TRCC has had no shortage of critics — and it's not just homeowners or consumer groups complaining about the agency. In 2006, an audit from the Texas comptroller's office branded the agency a “paper tiger” and said the agency shields builders from responsibility. Then there was last week's Sunset Commission recommendation. “It didn't stack up,” said Joey Longley, the Sunset Commission's executive director, of the TRCC. “We really didn't see that you could fix it.”
The unlucky few
Thousands of people purchase new homes in Texas each year, and it's a happy transaction for nearly all of them. The TRCC estimates just one-half of 1 percent of new homebuyers end up in the agency's dispute-resolution process. Of the 600,000 new homes the agency has registered in the past few years, just 1,441 have gone through the TRCC process. The agency has 310 pending cases.
But for the handful of people who do have homes with construction defects that a builder does not address, the process can be like a race without a finish line. Even attorneys have found themselves entangled. County Court-at-Law Judge Karen Crouch spent more than five years battling with a contractor who walked off an extensive remodel of her Castle Hill's home. Crouch said the TRCC process causes delays that can give bad builders time to shield financial assets and prevents people from accessing the jury system. “The process to me is inherently unfair to consumers,” Crouch said. “I would love to see them abolished. I think that would be the most wonderful thing ever.” She was one of the first to go through the TRCC process, and she and her husband spent tens of thousands of dollars on home repairs and legal fees.
Earlier this year, they settled with the contractor for an amount that fell short of the expense of repairs and attorney's fees. “My husband still says we should have kept going. I said, ‘We need to take what we can get while we can get it,'” Crouch said.
Chad and Amanda Tenborg also settled with their builder for a fraction of what it would cost to make repairs to their house, figuring the builder had deeper pockets for a legal fight than they did. Chad Tenborg said the builder ignored the state inspector's repair recommendations. “It's a slap in the face,” he said. “All they're in favor of is the homebuilder.”
Giving it ‘teeth'
Legislators in 2007 reformed the TRCC in hopes of fighting that perception. The TRCC now can issue cease-and-desist orders to try to stop people from building homes or doing remodeling work if they repeatedly have refused to register with the agency or have let their registrations lapse. It also can take disciplinary action against builders who refuse to participate in the dispute-resolution process with homeowners, or who fail to make a repair offer when a defect is found with their work. Fines can be as much as $10,000 a day under the law.
Remodeling work worth more than $10,000 now also has to go through the agency's dispute-resolution process. The building industry says the 2007 changes haven't been given a chance yet and could benefit homeowners.
Some of the new rules encourage builders to make repair offers quickly, and by doing so, avoid having their firm's name given the black mark of having built a “defective” home.
“It makes no sense to vaporize numerous homebuyer safeguards,” said Ned Muñoz, director of regulatory affairs with the Texas Association of Builders. “I think pulling the cord on the most readily available and cost-effective path to resolution is anything but constructive.”
To be or not to be
Abolishing the TRCC would return Texas to the days of unregulated homebuilding, Muñoz said. TRCC Executive Director Duane Waddill also said the agency's new powers just were starting to bear fruit. “We're starting to see really big changes,” he said. “Every day I get e-mails from people who say they have been through the process and their problems are getting resolved.”
Consumer groups say little of substance changed with the updates because the TRCC still lacks the authority to force a builder to repair a defective home. They also say the agency focuses too much on registering builders and collecting fees.
“If you're going to force this kind of process on homeowners, there ought to be some sort of guarantee they can get their homes fixed,” said Alex Winslow, executive director of Texas Watch, a consumer advocacy group. “Homeowners are the ones being regulated. They're the ones being told what they can and cannot do.”
Michael Moore, president of the Greater San Antonio Builders Association, said abolishing the TRCC would benefit only attorneys. “Before tort reform happened, trial attorneys were just eating our industry alive,” Moore said. “We wanted to do dispute resolution before it gets to court. Anybody who has had the misfortune of being in court knows it's a very expensive process and is pretty much only good for the attorney.”
Gary Javore, an attorney who often represents homebuilders, said the dispute-resolution process isn't perfect, but that it would be premature to abolish the agency. “I'd like to see the Legislature set another Sunset (Commission review) in another three years, and let's see how the TRCC functions now that it's got these additional powers,” Javore said. “It's created an incentive for builders to be more proactive.”
Rep. Allan Ritter, D-Nederland, authored the bill that created the TRCC and said consumers without the money to hire attorneys would be left with no way to resolve disputes without the agency. “The Legislature would be making a mistake by doing away with TRCC completely,” Ritter said. “Then you're back to nothing. That means my constituents that don't have the money or the power to hire attorneys or engineers have no place to go.”
Taking a toll
But some homeowners say the process is too slow. Joseph Newton, an Air Force dentist, has a TRCC ruling in his favor and now is suing his builder over foundation problems. “It has done nothing to quickly resolve the dispute, which is what the agency is supposed to do,” Newton said. “Absolutely nothing has been resolved. I built my house over three years ago and I can't believe it will be four years when we go to trial.”
But Newton is glad to have the state's inspection report to take to court. “We have an independent person who will tell us the builder is at fault,” Newton said. “That's something good that came from all of this.”
Most homeowners say they felt validated to have a state inspector rule on their side, and some have been able to parlay that into a resolution. Melissa Eldridge thought that going through the TRCC process helped her reach a settlement with her builder. Eldridge's agreement prevented her from talking about the specifics of the settlement, but she and her family no longer live in the home, and they are building a new one with a different builder. “I'm driving the builder crazy,” she said. “But they know what we've been through.”
Some homeowners give up after the dispute resolution process. They either can't afford an attorney to continue the fight or decide it's not worth the continued energy and expense.
A state inspector sided with Miguel Mendez when he had problems with water leaks on a balcony of his new home. Then his builder went out of business. Mendez figured a lawsuit would waste more time and money. Mendez did the work himself. Then the flooring subcontractor turned up, threatening to file a lien against his house because the builder had never paid him. “That had me more stressed out,” said Mendez, who paid the man $5,000. “It was a sore subject in my life. It was a difficult time, but we've been able to move on.”
For other homeowners the fight becomes a battle of wills. Leslie Firestone will go to arbitration in November after more than three years of trying to get the builder to address problems with her house. “You get to a point in this whole process where you're in it so deep you really can't back out. You're sunk,” Firestone said. “You can't back out, or they win.”
What's next?
Steiner, whose home has the extensive plumbing problems, will head for an arbitration hearing with his homebuilder later this year. Like many homebuyers, he signed a binding arbitration clause that prevents him from seeking a jury trial. He has already spent tens of thousands of dollars for attorney's fees and plumbers. The kitchen has only hot water. The downstairs toilet cannot be flushed. And he said that his builder in a recent mediation session offered just $5,000.
“The arrogance of the builders and the failure of the TRCC and the Legislature to protect homeowners is unbelievable,” Steiner said. “This process has gotten me nowhere. I just want my life back.”
The TRCC will be fighting for its survival this fall. The full Sunset Commission will consider the recent staff report at hearings Sept. 23-24 in Austin. It will give its recommendation to the Legislature in mid-December.
Rep. Todd Smith, R-Euless, said the recent Sunset Commission report is powerful, but so is the building industry. “You just can't deny that the agency was created originally with the significant backing of the building industry itself,” Smith said. “The political reality is you will not be able to move legislation that does not at least have the building community at the table. That is just the stark reality of politics in Austin. If they don't want to abolish the agency, I doubt very seriously the agency will be abolished.”
But public relations may demand change, Smith said, and those changes could reform the agency to better help consumers, especially those who have smaller claims against their builders and can't hire attorneys. “I think the commission's stated purpose is laudable, and that's to provide consumers an alternative to expensive and time-consuming litigation with builders. There's nobody that's against that purpose,” Smith said. “The question is, are they accomplishing that objective?”
That's something the 2009 Legislature will have to answer.
San Antonio attorney Trey Wilson regularly represents owners in defective construction and residential construction claims against builders. Trey Wilson is intimately famliar with the TRCC SIRP (state sponsored inspection process), and the presentment of TRCC claims against unscrupulous builders. Trey Wilson has served as the homeowners' lawyer in various lawsuits filed against builders who have abandoned residential construction projects, and failed to pay subcontractors and/or suppliers, who, in turn, file liens.
Hoses twist and snake through Jonathan Steiner's home. The makeshift plumbing lines run beneath furniture, across the living room and into the garage, where they block that door from closing completely. Air conditioning leaks out while bugs crawl in. The hoses were supposed to be a temporary fix when the plumbing system failed and sprung leaks all over the house.
That was more than two years ago.
After plumbers told Steiner the entire system needed replacing, the physical therapist couldn't get his builder to make repairs in his four-year-old brick home, located in the Woodridge neighborhood near USAA. So Steiner turned to the state agency the Legislature created to resolve disputes between homeowners and homebuilders. It didn't help.
The Texas Residential Construction Commission agreed the builder is responsible for the plumbing fiasco, but the agency can't force the company to fix it. That disconnect is one reason the Sunset Advisory Commission staff this month recommended abolishing the agency.
The TRCC is up for reauthorization by the Legislature next year. And the staff of the Sunset Commission, the legislative body charged with identifying and eliminating waste in government agencies, is the latest critic of the TRCC.
Homeowners have to go through the process before going to court, but don't trust the agency, the staff report said. “No other regulatory agency has a program with such a potentially devastating effect on consumers' ability to seek their own remedies,” it said.
Documents obtained under the Texas Public Information Act and interviews with more than four dozen San Antonio-area homeowners or their attorneys show a wide gulf exists between having the TRCC rule in a homeowner's favor and in actually getting a builder to repair shoddy construction. Of the homeowners interviewed over the past 18months, 27 people had builders who ignored needed repairs even after independent inspectors found construction defects in the home. Just 14 people had their homes repaired or had settled with the builder.
A handful of homeowners were involved in lawsuits and were legally prevented from disclosing settlement terms or said they still were working through the dispute resolution process. Three other TRCC decisions were unclear based on incomplete paperwork provided by the agency. And three homeowners had a TRCC ruling that didn't find construction defects in their homes, although in one of those cases the builder made the repairs anyway.
Statewide, only 12 percent of cases where the state has sent in inspectors to review alleged defects have resulted in a “satisfactory offer or repair or compensation over the life of the program,” according to last week's Sunset Commission report. “The remaining 88 percent of reported cases are pursued by one party or the other using the legal system — the very outcome the process was enacted to prevent,” the report said.“That's not a good batting average,” said Kendall County resident Joseph Bartoloni, who complained to the agency in 2006 when his builder would not repair problems or complete work on his custom home. He had to make the repairs himself. “I don't know how much the building community respects the TRCC. My builder blew it off.”
The process
The Legislature created the TRCC in 2003 as a way for homeowners and builders to resolve disputes without going through the expense of a lawsuit. The TRCC registers homebuilders and remodelers, and provides homebuyers an online search tool for researching homebuilders.
Homeowners who have a disputes with their builders can't sue until they have tried the agency's dispute-resolution process, which involves putting any alleged defects in writing and having an independent inspector look at the house. If the builder or homeowner disagrees with the inspector, either can appeal to a TRCC panel.
But since its inception, TRCC has had no shortage of critics — and it's not just homeowners or consumer groups complaining about the agency. In 2006, an audit from the Texas comptroller's office branded the agency a “paper tiger” and said the agency shields builders from responsibility. Then there was last week's Sunset Commission recommendation. “It didn't stack up,” said Joey Longley, the Sunset Commission's executive director, of the TRCC. “We really didn't see that you could fix it.”
The unlucky few
Thousands of people purchase new homes in Texas each year, and it's a happy transaction for nearly all of them. The TRCC estimates just one-half of 1 percent of new homebuyers end up in the agency's dispute-resolution process. Of the 600,000 new homes the agency has registered in the past few years, just 1,441 have gone through the TRCC process. The agency has 310 pending cases.
But for the handful of people who do have homes with construction defects that a builder does not address, the process can be like a race without a finish line. Even attorneys have found themselves entangled. County Court-at-Law Judge Karen Crouch spent more than five years battling with a contractor who walked off an extensive remodel of her Castle Hill's home. Crouch said the TRCC process causes delays that can give bad builders time to shield financial assets and prevents people from accessing the jury system. “The process to me is inherently unfair to consumers,” Crouch said. “I would love to see them abolished. I think that would be the most wonderful thing ever.” She was one of the first to go through the TRCC process, and she and her husband spent tens of thousands of dollars on home repairs and legal fees.
Earlier this year, they settled with the contractor for an amount that fell short of the expense of repairs and attorney's fees. “My husband still says we should have kept going. I said, ‘We need to take what we can get while we can get it,'” Crouch said.
Chad and Amanda Tenborg also settled with their builder for a fraction of what it would cost to make repairs to their house, figuring the builder had deeper pockets for a legal fight than they did. Chad Tenborg said the builder ignored the state inspector's repair recommendations. “It's a slap in the face,” he said. “All they're in favor of is the homebuilder.”
Giving it ‘teeth'
Legislators in 2007 reformed the TRCC in hopes of fighting that perception. The TRCC now can issue cease-and-desist orders to try to stop people from building homes or doing remodeling work if they repeatedly have refused to register with the agency or have let their registrations lapse. It also can take disciplinary action against builders who refuse to participate in the dispute-resolution process with homeowners, or who fail to make a repair offer when a defect is found with their work. Fines can be as much as $10,000 a day under the law.
Remodeling work worth more than $10,000 now also has to go through the agency's dispute-resolution process. The building industry says the 2007 changes haven't been given a chance yet and could benefit homeowners.
Some of the new rules encourage builders to make repair offers quickly, and by doing so, avoid having their firm's name given the black mark of having built a “defective” home.
“It makes no sense to vaporize numerous homebuyer safeguards,” said Ned Muñoz, director of regulatory affairs with the Texas Association of Builders. “I think pulling the cord on the most readily available and cost-effective path to resolution is anything but constructive.”
To be or not to be
Abolishing the TRCC would return Texas to the days of unregulated homebuilding, Muñoz said. TRCC Executive Director Duane Waddill also said the agency's new powers just were starting to bear fruit. “We're starting to see really big changes,” he said. “Every day I get e-mails from people who say they have been through the process and their problems are getting resolved.”
Consumer groups say little of substance changed with the updates because the TRCC still lacks the authority to force a builder to repair a defective home. They also say the agency focuses too much on registering builders and collecting fees.
“If you're going to force this kind of process on homeowners, there ought to be some sort of guarantee they can get their homes fixed,” said Alex Winslow, executive director of Texas Watch, a consumer advocacy group. “Homeowners are the ones being regulated. They're the ones being told what they can and cannot do.”
Michael Moore, president of the Greater San Antonio Builders Association, said abolishing the TRCC would benefit only attorneys. “Before tort reform happened, trial attorneys were just eating our industry alive,” Moore said. “We wanted to do dispute resolution before it gets to court. Anybody who has had the misfortune of being in court knows it's a very expensive process and is pretty much only good for the attorney.”
Gary Javore, an attorney who often represents homebuilders, said the dispute-resolution process isn't perfect, but that it would be premature to abolish the agency. “I'd like to see the Legislature set another Sunset (Commission review) in another three years, and let's see how the TRCC functions now that it's got these additional powers,” Javore said. “It's created an incentive for builders to be more proactive.”
Rep. Allan Ritter, D-Nederland, authored the bill that created the TRCC and said consumers without the money to hire attorneys would be left with no way to resolve disputes without the agency. “The Legislature would be making a mistake by doing away with TRCC completely,” Ritter said. “Then you're back to nothing. That means my constituents that don't have the money or the power to hire attorneys or engineers have no place to go.”
Taking a toll
But some homeowners say the process is too slow. Joseph Newton, an Air Force dentist, has a TRCC ruling in his favor and now is suing his builder over foundation problems. “It has done nothing to quickly resolve the dispute, which is what the agency is supposed to do,” Newton said. “Absolutely nothing has been resolved. I built my house over three years ago and I can't believe it will be four years when we go to trial.”
But Newton is glad to have the state's inspection report to take to court. “We have an independent person who will tell us the builder is at fault,” Newton said. “That's something good that came from all of this.”
Most homeowners say they felt validated to have a state inspector rule on their side, and some have been able to parlay that into a resolution. Melissa Eldridge thought that going through the TRCC process helped her reach a settlement with her builder. Eldridge's agreement prevented her from talking about the specifics of the settlement, but she and her family no longer live in the home, and they are building a new one with a different builder. “I'm driving the builder crazy,” she said. “But they know what we've been through.”
Some homeowners give up after the dispute resolution process. They either can't afford an attorney to continue the fight or decide it's not worth the continued energy and expense.
A state inspector sided with Miguel Mendez when he had problems with water leaks on a balcony of his new home. Then his builder went out of business. Mendez figured a lawsuit would waste more time and money. Mendez did the work himself. Then the flooring subcontractor turned up, threatening to file a lien against his house because the builder had never paid him. “That had me more stressed out,” said Mendez, who paid the man $5,000. “It was a sore subject in my life. It was a difficult time, but we've been able to move on.”
For other homeowners the fight becomes a battle of wills. Leslie Firestone will go to arbitration in November after more than three years of trying to get the builder to address problems with her house. “You get to a point in this whole process where you're in it so deep you really can't back out. You're sunk,” Firestone said. “You can't back out, or they win.”
What's next?
Steiner, whose home has the extensive plumbing problems, will head for an arbitration hearing with his homebuilder later this year. Like many homebuyers, he signed a binding arbitration clause that prevents him from seeking a jury trial. He has already spent tens of thousands of dollars for attorney's fees and plumbers. The kitchen has only hot water. The downstairs toilet cannot be flushed. And he said that his builder in a recent mediation session offered just $5,000.
“The arrogance of the builders and the failure of the TRCC and the Legislature to protect homeowners is unbelievable,” Steiner said. “This process has gotten me nowhere. I just want my life back.”
The TRCC will be fighting for its survival this fall. The full Sunset Commission will consider the recent staff report at hearings Sept. 23-24 in Austin. It will give its recommendation to the Legislature in mid-December.
Rep. Todd Smith, R-Euless, said the recent Sunset Commission report is powerful, but so is the building industry. “You just can't deny that the agency was created originally with the significant backing of the building industry itself,” Smith said. “The political reality is you will not be able to move legislation that does not at least have the building community at the table. That is just the stark reality of politics in Austin. If they don't want to abolish the agency, I doubt very seriously the agency will be abolished.”
But public relations may demand change, Smith said, and those changes could reform the agency to better help consumers, especially those who have smaller claims against their builders and can't hire attorneys. “I think the commission's stated purpose is laudable, and that's to provide consumers an alternative to expensive and time-consuming litigation with builders. There's nobody that's against that purpose,” Smith said. “The question is, are they accomplishing that objective?”
That's something the 2009 Legislature will have to answer.
San Antonio attorney Trey Wilson regularly represents owners in defective construction and residential construction claims against builders. Trey Wilson is intimately famliar with the TRCC SIRP (state sponsored inspection process), and the presentment of TRCC claims against unscrupulous builders. Trey Wilson has served as the homeowners' lawyer in various lawsuits filed against builders who have abandoned residential construction projects, and failed to pay subcontractors and/or suppliers, who, in turn, file liens.
Thứ Tư, 27 tháng 8, 2008
CONDEMNATION PROCEDURE -- Eminent Domain in Texas
Eminent Domain is the ability of certain entities to take private property for a public use. Private property can include land and certain improvements that are on that property. Private property may only be taken by a governmental entity or private entity authorized by law to do so. Your property may be taken only for a public use. Eminent domain cannot be used to take your property for economic development purposes, except for limited exceptions provided by law.
Your property cannot be taken without adequate compensation. Adequate compensation includes the market value of the property being taken. It may also include certain damages, if any, to your remaining property caused by the acquisition itself or by the way the condemning entity will use the property.
How the Taking Process Begins
The taking of private property by eminent domain must follow certain procedures. First, the entity that wants to condemn your property must notify you about its interest in acquiring your property. Second, before a condemning entity begins negotiating with you to acquire your property, it must send this Landowner's Bill of
Rights statement to the last known address of the person in whose name the property is listed on the most recent tax roll. Third, the condemning entity must make a good faith offer to purchase the property. The condemning entity’s offer must be based on an investigation and an assessment of adequate compensation for the property. At the
time the offer is made, the governmental condemning entity must disclose any appraisal reports it used to determine the value of its offer to acquire the property. You have the right to either accept or reject the offer made by the condemning entity.
Condemnation Proceedings
If you and the condemning entity do not agree on the value of the property being taken, the entity may begin condemnation proceedings. Condemnation is the legal process for the taking of private property. It begins with a condemning entity filing a claim for your property in court. If you live in a county where part of the property being condemned is located, the claim must be filed in that county. Otherwise, the claim can be filed in any county where at least part of the property being condemned is located. The claim must describe the property being condemned, the intended public use, the name of the landowner, a statement that the landowner and the condemning entity were unable to agree on the value of the property, and that the condemning entity provided the landowner with the Landowner’s Bill of Rights statement.
Special Commissioners’ Hearing
After the condemning entity files a claim in court, the judge will appoint three landowners to serve as special commissioners. These special commissioners must live in the county where the condemnation proceeding is filed, and they must take an oath to assess the amount of adequate compensation fairly, impartially, and according to the law. The special commissioners are not authorized to decide whether the condemnation is necessary or if the public use is proper. After being appointed, the special commissioners must schedule a hearing at the earliest practical time and place and provide you written notice of that hearing. You are required to disclose to the governmental condemning entity, at least ten days before the special commissioners' hearing, any appraisal reports used to determine your opinion about adequate compensation for the property. You may hire an appraiser or real estate professional to help your determine the value of your private property. You may also hire an attorney regarding these proceedings.At the hearing, the special commissioners will consider evidence on the value of the property, the damages to
remaining property, any value added to the remaining property as a result of the project, and the uses to be made of the property being taken.
Special Commissioners’ Award
After hearing evidence from all interested parties, the special commissioners will determine the amount of money to be awarded as adequate compensation. You may be responsible for the costs if the Award is less than or equal to the amount the condemning entity offered before the condemnation proceeding began. Otherwise, the condemning entity will be responsible for the costs. The special commissioners will give a written decision to the court that appointed them. That decision is called the "Award." The Award must be filed with the court and the court must send written notice of the Award to all parties. After the Award is filed, the condemning entity may take possession of the property being condemned, even if either party appeals the Award of the special commissioners. To take possession of the property, the
condemning entity must either pay you the amount of the Award or deposit the amount of the Award into the registry of the court. You have the right to withdraw the deposited funds from the registry of the court.
Objection to the Special Commissioners’ Award
If either you or the condemning entity is dissatisfied with the amount of the Award, either party can object to the Award by filing a written statement of objection with the court. If neither party timely objects to the Award, the court will adopt the Award as the final judgment of the court. If a party timely objects to the special
commissioners' Award, the court will hear the case in the same manner as other civil cases. If you object to the Award and ask the court to hear the matter, you have the right to a trial by judge or jury. The allocation of costs is handled in the same manner as with the special commissioners’ Award. After that trial, either party may appeal any judgment entered by the court.
Dismissal of the Condemnation Action
A condemning entity may file a motion to dismiss the condemnation proceeding if it decides it no longer needs your property. If the court grants the motion to dismiss, the case is over and you are entitled to recover reasonable and necessary fees for attorneys, appraisers, photographers, and for other expenses incurred to the
date of the hearing on the motion to dismiss.You may also file a motion to dismiss the condemnation proceeding on the ground that the condemning entity did not have the right to condemn the property, including a challenge as to whether the property is being taken for a public use. If the court grants your motion, the court may award you reasonable and necessary fees for attorneys, appraisers, photographers, and for other expenses incurred to the date of the hearing or judgment.
Relocation Costs
If you are displaced from a residence or place of business, you may be entitled to reimbursement for reasonable expenses incurred while moving personal property from the residence or relocating the business to a new site. You are not entitled to these relocation costs if they are recoverable under another law. If you are entitled to these costs, they cannot exceed the market value of the property being moved and can only be reimbursed for moving distances within 50 miles.
Reclamation Options
If private property was condemned by a governmental entity, and the purpose for which the property was acquired is canceled before the 10th anniversary of the date of the acquisition, you may have the right to seek to repurchase the property for the fair market value of the property at the time the public use was canceled. This
provision does not apply to property acquired by a county, a municipality, or the Texas Department of Transportation.
Your property cannot be taken without adequate compensation. Adequate compensation includes the market value of the property being taken. It may also include certain damages, if any, to your remaining property caused by the acquisition itself or by the way the condemning entity will use the property.
How the Taking Process Begins
The taking of private property by eminent domain must follow certain procedures. First, the entity that wants to condemn your property must notify you about its interest in acquiring your property. Second, before a condemning entity begins negotiating with you to acquire your property, it must send this Landowner's Bill of
Rights statement to the last known address of the person in whose name the property is listed on the most recent tax roll. Third, the condemning entity must make a good faith offer to purchase the property. The condemning entity’s offer must be based on an investigation and an assessment of adequate compensation for the property. At the
time the offer is made, the governmental condemning entity must disclose any appraisal reports it used to determine the value of its offer to acquire the property. You have the right to either accept or reject the offer made by the condemning entity.
Condemnation Proceedings
If you and the condemning entity do not agree on the value of the property being taken, the entity may begin condemnation proceedings. Condemnation is the legal process for the taking of private property. It begins with a condemning entity filing a claim for your property in court. If you live in a county where part of the property being condemned is located, the claim must be filed in that county. Otherwise, the claim can be filed in any county where at least part of the property being condemned is located. The claim must describe the property being condemned, the intended public use, the name of the landowner, a statement that the landowner and the condemning entity were unable to agree on the value of the property, and that the condemning entity provided the landowner with the Landowner’s Bill of Rights statement.
Special Commissioners’ Hearing
After the condemning entity files a claim in court, the judge will appoint three landowners to serve as special commissioners. These special commissioners must live in the county where the condemnation proceeding is filed, and they must take an oath to assess the amount of adequate compensation fairly, impartially, and according to the law. The special commissioners are not authorized to decide whether the condemnation is necessary or if the public use is proper. After being appointed, the special commissioners must schedule a hearing at the earliest practical time and place and provide you written notice of that hearing. You are required to disclose to the governmental condemning entity, at least ten days before the special commissioners' hearing, any appraisal reports used to determine your opinion about adequate compensation for the property. You may hire an appraiser or real estate professional to help your determine the value of your private property. You may also hire an attorney regarding these proceedings.At the hearing, the special commissioners will consider evidence on the value of the property, the damages to
remaining property, any value added to the remaining property as a result of the project, and the uses to be made of the property being taken.
Special Commissioners’ Award
After hearing evidence from all interested parties, the special commissioners will determine the amount of money to be awarded as adequate compensation. You may be responsible for the costs if the Award is less than or equal to the amount the condemning entity offered before the condemnation proceeding began. Otherwise, the condemning entity will be responsible for the costs. The special commissioners will give a written decision to the court that appointed them. That decision is called the "Award." The Award must be filed with the court and the court must send written notice of the Award to all parties. After the Award is filed, the condemning entity may take possession of the property being condemned, even if either party appeals the Award of the special commissioners. To take possession of the property, the
condemning entity must either pay you the amount of the Award or deposit the amount of the Award into the registry of the court. You have the right to withdraw the deposited funds from the registry of the court.
Objection to the Special Commissioners’ Award
If either you or the condemning entity is dissatisfied with the amount of the Award, either party can object to the Award by filing a written statement of objection with the court. If neither party timely objects to the Award, the court will adopt the Award as the final judgment of the court. If a party timely objects to the special
commissioners' Award, the court will hear the case in the same manner as other civil cases. If you object to the Award and ask the court to hear the matter, you have the right to a trial by judge or jury. The allocation of costs is handled in the same manner as with the special commissioners’ Award. After that trial, either party may appeal any judgment entered by the court.
Dismissal of the Condemnation Action
A condemning entity may file a motion to dismiss the condemnation proceeding if it decides it no longer needs your property. If the court grants the motion to dismiss, the case is over and you are entitled to recover reasonable and necessary fees for attorneys, appraisers, photographers, and for other expenses incurred to the
date of the hearing on the motion to dismiss.You may also file a motion to dismiss the condemnation proceeding on the ground that the condemning entity did not have the right to condemn the property, including a challenge as to whether the property is being taken for a public use. If the court grants your motion, the court may award you reasonable and necessary fees for attorneys, appraisers, photographers, and for other expenses incurred to the date of the hearing or judgment.
Relocation Costs
If you are displaced from a residence or place of business, you may be entitled to reimbursement for reasonable expenses incurred while moving personal property from the residence or relocating the business to a new site. You are not entitled to these relocation costs if they are recoverable under another law. If you are entitled to these costs, they cannot exceed the market value of the property being moved and can only be reimbursed for moving distances within 50 miles.
Reclamation Options
If private property was condemned by a governmental entity, and the purpose for which the property was acquired is canceled before the 10th anniversary of the date of the acquisition, you may have the right to seek to repurchase the property for the fair market value of the property at the time the public use was canceled. This
provision does not apply to property acquired by a county, a municipality, or the Texas Department of Transportation.
Texas Landowner Bill of Rights -- Condemnation & Takings of Private Property
This Bill of Rights applies to any attempt by the government or a private entity to take your property. The contents of this Bill of Rights are prescribed by the Texas Legislature in Texas Government Code Sec. 402.031 and Chapter 21 of the Texas Property Code.
1. You are entitled to receive adequate compensation if your property is taken for a public use.
2. Your property can only be taken for a public use.
3. Your property can only be taken by a governmental entity or private entity authorized by law to do so.
4. The entity that wants to take your property must notify you about its interest in taking your property.
5. The entity proposing to take your property must provide you with an assessment of the adequate compensation for your property.
6. The entity proposing to take your property must make a good faith offer to buy the property before it files a lawsuit to condemn the property.
7. You may hire an appraiser or other professional to determine the value of your property or to assist you in any condemnation proceeding.
8. You may hire an attorney to negotiate with the condemning entity and to represent you in any legal proceedings involving the condemnation.
9. Before your property is condemned, you are entitled to a hearing before a court-appointed panel that includes three special commissioners. This specialized hearing panel must determine the amount of compensation the condemning entity owes for the taking of your property. The commissioners must also determine what compensation, if any, you are entitled to receive for any reduction in value of your remaining property.
10. If you are unsatisfied with the compensation awarded by the special commissioners, or if you question whether the taking of your property was proper, you have the right to a trial by a judge or jury. If you are dissatisfied with the trial court's judgment, you may appeal that decision.
If you are facing Condemnation, or an uncompensated taking or trespass upon your land by a unit of government, you should contact an experienced real estate attorney. San Antonio lawyer Trey Wilson represents landowners in a variety of legal proceedings and transactions relating to ownership, sale, transfer, and takings.
1. You are entitled to receive adequate compensation if your property is taken for a public use.
2. Your property can only be taken for a public use.
3. Your property can only be taken by a governmental entity or private entity authorized by law to do so.
4. The entity that wants to take your property must notify you about its interest in taking your property.
5. The entity proposing to take your property must provide you with an assessment of the adequate compensation for your property.
6. The entity proposing to take your property must make a good faith offer to buy the property before it files a lawsuit to condemn the property.
7. You may hire an appraiser or other professional to determine the value of your property or to assist you in any condemnation proceeding.
8. You may hire an attorney to negotiate with the condemning entity and to represent you in any legal proceedings involving the condemnation.
9. Before your property is condemned, you are entitled to a hearing before a court-appointed panel that includes three special commissioners. This specialized hearing panel must determine the amount of compensation the condemning entity owes for the taking of your property. The commissioners must also determine what compensation, if any, you are entitled to receive for any reduction in value of your remaining property.
10. If you are unsatisfied with the compensation awarded by the special commissioners, or if you question whether the taking of your property was proper, you have the right to a trial by a judge or jury. If you are dissatisfied with the trial court's judgment, you may appeal that decision.
If you are facing Condemnation, or an uncompensated taking or trespass upon your land by a unit of government, you should contact an experienced real estate attorney. San Antonio lawyer Trey Wilson represents landowners in a variety of legal proceedings and transactions relating to ownership, sale, transfer, and takings.
Excerpts from the August 2008 Staff Report of the Texas Sunset Commission on the Continued Viability of the Texas Residential Construction Commission
NOTE: In 1977, the Texas Legislature created the Sunset Advisory Commission to identify and eliminate waste, duplication, and inefficiency in government agencies. The 12-member Commission is a legislative body that reviews the policies and programs of more than 150 government agencies every 12 years. The Commission questions the need for each agency, looks for potential duplication of other public services or programs, and considers new and innovative changes to improve each agency’s operations and activities. The Commission seeks public input through hearings on every agency under Sunset review and recommends actions on each agency to the full Legislature. In most cases, agencies under Sunset review are automatically abolished unless legislation is enacted to continue them.
The following are DIRECT EXCERPTS from the Sunset Commission's Staff Report on the TRCC:
Summary
Current regulation of the residential construction industry is fundamentally flawed and does more harm than good.
Ultimately, the Legislature will need to decide the approach for overseeing this industry. This report presents an opportunity to have a more comprehensive discussion of dispute resolution and legal processes available to homeowners and the regulation of the residential construction industry as a whole.
"The Texas Residential Construction Commission was never meant to be a true regulatory agency with a clear mission of protecting the public. It has elements of a regulatory agency in its registration of homebuilders, but this program is not designed to ensure that only qualified persons can enter the field – the way true regulatory agencies work – and so does not work to prevent problems from occurring. The Commission also has tools for taking enforcement action, but the ease of satisfying the registration requirements and significant gaps in who must be registered make it easy for even problem builders to stay in business. The Commission also administers the State Inspection Process, designed to resolve disputes between homeowners and builders before either party may pursue legal action. Th is lengthy and sometimes difficult process has been a source of frustration for homeowners trying to address defects with their homes. Despite changes last Session ostensibly to strengthen the process by making builders subject to new penalties if they refuse to off er repair of a confirmed defect, the Commission still has no real power to require builders to make needed repairs. Because homeowners must submit to this process before they may seek remedies in court, those who fail to satisfy its requirements either out of confusion or frustration lose their access to court. No other regulatory agency has a program with such a potentially devastating effect on consumers’ ability to seek their own remedies.
The cumulative impact of these programs is a greater lack of trust than is seen
with other regulatory agencies. People do not trust the regulatory processes to protect them from unqualified builders who should not be in business. Homeowners do not trust the State Inspection Process to help fix defects in their houses. When confronted with the daunting issues involved in controlling such a large, important, and complex field as residential construction, Sunset staff did not trust that the commitment exists to establish the true regulation needed for the protection of the public.
In its review of the Texas Residential Construction Commission, Sunset staff concluded that anything short of a true regulatory program does more harm than good, and should be abolished. Despite recent improvements in the State Inspection Process regarding satisfactory offers of repair, the process is still ineffective and likewise needs to be abolished. The Commission cannot require needed repairs, and the Process potentially threatens the Commission’s ability to objectively enforce regulations. Although agency staff work diligently to implement regulations and help consumers navigate the various processes for redressing complaints, good intentions are not a substitute for having adequate statutory tools.
Issue and Recommendation
Issue 1
The Texas Residential Construction Commission Fails to Provide Meaningful Oversight and Public Protection Because of Fundamental Structural Flaws in the Current Regulatory Approach.
Key Recommendation
Key Findings The Legislature created the Texas Residential Construction Commission to be a different type of regulatory agency – providing both industry oversight and an inspection service.
Registration does not provide an effective mechanism for adequately protecting the public and regulating the residential construction industry.
The State Inspection Process requires a heavy investment of resources and is ineffective in requiring meaningful results.
Other agency functions do not add value, distract from the Commission’s main duties, and confuse many homeowners.
The overall regulatory scheme for residential construction has broad impacts beyond the agency’s purview, leading to considerable consumer distrust.
While most other states regulate builders, the majority do so with more rigorous licensing programs.
Fundamental flaws with current industry regulations and the expansion of regulation needed to fix them make it difficult to justify either continuing down the current path or overhauling the State’s approach.
Conclusion
From its inception, the Texas Residential Construction Commission has received criticism of its ability to eff ectively oversee builders and protect Texans from poor quality construction. Although the Legislature recently listened to these concerns and made significant changes to the Commission and its enforcement abilities, these eff orts only mask fundamental flaws in the State’s current approach to industry regulation. To fix these structural flaws would require an expansion of industry regulation that Sunset staff concluded cannot be accomplished in the near future. Without true regulation designed to ensure public protection, Texans are better served without the Texas Residential Construction Commission.
San Antonio Attorney Trey Wilson has significant experience in residential construction claims, and the Texas Residential Construction Commission SIRP and complaint processes. He regularly represents owners in claims against registered builders. Trey Wilson may be contacted at www.sa-law.com or 210/223-4100.
The following are DIRECT EXCERPTS from the Sunset Commission's Staff Report on the TRCC:
Summary
Current regulation of the residential construction industry is fundamentally flawed and does more harm than good.
Ultimately, the Legislature will need to decide the approach for overseeing this industry. This report presents an opportunity to have a more comprehensive discussion of dispute resolution and legal processes available to homeowners and the regulation of the residential construction industry as a whole.
"The Texas Residential Construction Commission was never meant to be a true regulatory agency with a clear mission of protecting the public. It has elements of a regulatory agency in its registration of homebuilders, but this program is not designed to ensure that only qualified persons can enter the field – the way true regulatory agencies work – and so does not work to prevent problems from occurring. The Commission also has tools for taking enforcement action, but the ease of satisfying the registration requirements and significant gaps in who must be registered make it easy for even problem builders to stay in business. The Commission also administers the State Inspection Process, designed to resolve disputes between homeowners and builders before either party may pursue legal action. Th is lengthy and sometimes difficult process has been a source of frustration for homeowners trying to address defects with their homes. Despite changes last Session ostensibly to strengthen the process by making builders subject to new penalties if they refuse to off er repair of a confirmed defect, the Commission still has no real power to require builders to make needed repairs. Because homeowners must submit to this process before they may seek remedies in court, those who fail to satisfy its requirements either out of confusion or frustration lose their access to court. No other regulatory agency has a program with such a potentially devastating effect on consumers’ ability to seek their own remedies.
The cumulative impact of these programs is a greater lack of trust than is seen
with other regulatory agencies. People do not trust the regulatory processes to protect them from unqualified builders who should not be in business. Homeowners do not trust the State Inspection Process to help fix defects in their houses. When confronted with the daunting issues involved in controlling such a large, important, and complex field as residential construction, Sunset staff did not trust that the commitment exists to establish the true regulation needed for the protection of the public.
In its review of the Texas Residential Construction Commission, Sunset staff concluded that anything short of a true regulatory program does more harm than good, and should be abolished. Despite recent improvements in the State Inspection Process regarding satisfactory offers of repair, the process is still ineffective and likewise needs to be abolished. The Commission cannot require needed repairs, and the Process potentially threatens the Commission’s ability to objectively enforce regulations. Although agency staff work diligently to implement regulations and help consumers navigate the various processes for redressing complaints, good intentions are not a substitute for having adequate statutory tools.
Issue and Recommendation
Issue 1
The Texas Residential Construction Commission Fails to Provide Meaningful Oversight and Public Protection Because of Fundamental Structural Flaws in the Current Regulatory Approach.
Key Recommendation
Abolish the Texas Residential Construction Commission and repeal the Texas Residential Construction Commission Act.
Key Findings The Legislature created the Texas Residential Construction Commission to be a different type of regulatory agency – providing both industry oversight and an inspection service.
Registration does not provide an effective mechanism for adequately protecting the public and regulating the residential construction industry.
The State Inspection Process requires a heavy investment of resources and is ineffective in requiring meaningful results.
Other agency functions do not add value, distract from the Commission’s main duties, and confuse many homeowners.
The overall regulatory scheme for residential construction has broad impacts beyond the agency’s purview, leading to considerable consumer distrust.
While most other states regulate builders, the majority do so with more rigorous licensing programs.
Fundamental flaws with current industry regulations and the expansion of regulation needed to fix them make it difficult to justify either continuing down the current path or overhauling the State’s approach.
Conclusion
From its inception, the Texas Residential Construction Commission has received criticism of its ability to eff ectively oversee builders and protect Texans from poor quality construction. Although the Legislature recently listened to these concerns and made significant changes to the Commission and its enforcement abilities, these eff orts only mask fundamental flaws in the State’s current approach to industry regulation. To fix these structural flaws would require an expansion of industry regulation that Sunset staff concluded cannot be accomplished in the near future. Without true regulation designed to ensure public protection, Texans are better served without the Texas Residential Construction Commission.
San Antonio Attorney Trey Wilson has significant experience in residential construction claims, and the Texas Residential Construction Commission SIRP and complaint processes. He regularly represents owners in claims against registered builders. Trey Wilson may be contacted at www.sa-law.com or 210/223-4100.
Thứ Hai, 25 tháng 8, 2008
Tenant Lock Out Rights in Texas. Is a Lockout the Same As An Eviction?
A Lockout Is Not An Eviction - It's a mechanism used to get the attention of the Tenant and to force them to contact management and make arrangements to pay any past due rent.
A landlord can lock out a Tenant for non-payment of rent for no more than two hours after the Tenant requests re-entry. There are multiple rules from the Texas property code that Landlords must follow:
1) They must give you written notice in your lease either in bold or underlined print that they reserve the right to lock you out for non-payment of rent or other fees. If you are late with your payment they then must again give written notice of past due rent and late fees and of their intent to lock you out.
2) They can not lock you out or change the locks while you or any or guest occupies the rental unit.
3) If your are locked out the landlord must return full access with 2 Hours of your request and can not require your to pay any rent amount or late fees before allowing you re-entry. If they do not allow access they are subject to prosecution on an criminal misdemeanor charges as well as civil fines and court cost. Under no circumstances tamper with or remove the landlords lockout device because they can fill criminal charges against you. If the property management company does not let you in and provide you with a new key within 2 hrs call 911 and ask them to send an officer to assist you to gain access and be sure to get an Incident number so you can be can not be prosecuted. This will also help with your case for cash damages of up to 1 months rent, plus $500 and Attorneys fees - minus any past due rent..
4) Your management company can not use "off duty" Police or Law enforcement officers to try to force you to allow them to change the locks or allow them to remove property that is subject to "A landlords Lien." If a police officer who is being paid or receiving compensation such as free or discounted rent cannot " Use The Color Of their Badge" to do the landlords bidding in relation to your nonpayment of rent, lockout or landlords liens. It is must certainly a conflict of interest and is subject to criminal prosecution for "Official Oppression" - Texas Penal Code - Section 39.03 for the Law Enforcement Officer. Both the landlord or the landlord's agent who instigates such action is also subject to civil and criminal prosecution.
If this happens do not step outside you door or allow the officer working as a security officer for the complex inside your apartment. They may try to arrest you " for disorderly conduct" or some other trumped up change that judges tend to give them the benefit of the doubt for.
In a non-treating voice inform them that their actions appear to be a "Conflict Of Interest" and are verging on "Official Oppression" and you want another police agency to intervene. Close the door and then you should then call 911 and ask them to send another law enforcement agency to send a supervisor and make a complaint for "Official Oppression" which is a federal and state civil rights violation. When the other agencies officer arrives allow him and him only into your residence and state your case, call the local Justice of the peace and ask him to speak to the officer. Always ask for an Incident report number for your compliant.
If you feel that you have been improperly locked-out, or that your landlord will not abide by the law without your resorting to Court attention, call a lawyer experienced with evictions, such as San Antonio attorney Trey Wilson of R L Wilson, P.C. Law Firm.
A landlord can lock out a Tenant for non-payment of rent for no more than two hours after the Tenant requests re-entry. There are multiple rules from the Texas property code that Landlords must follow:
1) They must give you written notice in your lease either in bold or underlined print that they reserve the right to lock you out for non-payment of rent or other fees. If you are late with your payment they then must again give written notice of past due rent and late fees and of their intent to lock you out.
2) They can not lock you out or change the locks while you or any or guest occupies the rental unit.
3) If your are locked out the landlord must return full access with 2 Hours of your request and can not require your to pay any rent amount or late fees before allowing you re-entry. If they do not allow access they are subject to prosecution on an criminal misdemeanor charges as well as civil fines and court cost. Under no circumstances tamper with or remove the landlords lockout device because they can fill criminal charges against you. If the property management company does not let you in and provide you with a new key within 2 hrs call 911 and ask them to send an officer to assist you to gain access and be sure to get an Incident number so you can be can not be prosecuted. This will also help with your case for cash damages of up to 1 months rent, plus $500 and Attorneys fees - minus any past due rent..
4) Your management company can not use "off duty" Police or Law enforcement officers to try to force you to allow them to change the locks or allow them to remove property that is subject to "A landlords Lien." If a police officer who is being paid or receiving compensation such as free or discounted rent cannot " Use The Color Of their Badge" to do the landlords bidding in relation to your nonpayment of rent, lockout or landlords liens. It is must certainly a conflict of interest and is subject to criminal prosecution for "Official Oppression" - Texas Penal Code - Section 39.03 for the Law Enforcement Officer. Both the landlord or the landlord's agent who instigates such action is also subject to civil and criminal prosecution.
If this happens do not step outside you door or allow the officer working as a security officer for the complex inside your apartment. They may try to arrest you " for disorderly conduct" or some other trumped up change that judges tend to give them the benefit of the doubt for.
In a non-treating voice inform them that their actions appear to be a "Conflict Of Interest" and are verging on "Official Oppression" and you want another police agency to intervene. Close the door and then you should then call 911 and ask them to send another law enforcement agency to send a supervisor and make a complaint for "Official Oppression" which is a federal and state civil rights violation. When the other agencies officer arrives allow him and him only into your residence and state your case, call the local Justice of the peace and ask him to speak to the officer. Always ask for an Incident report number for your compliant.
If you feel that you have been improperly locked-out, or that your landlord will not abide by the law without your resorting to Court attention, call a lawyer experienced with evictions, such as San Antonio attorney Trey Wilson of R L Wilson, P.C. Law Firm.
REPRESENTATIVE MCCLENDON PRESS RELEASE - RESPONSE TO SUNSET REPORT
Wednesday, August 20, 2008
San Antonio) -- State Representative Ruth Jones McClendon (District 120, San Antonio) filed legislation last Session to increase the protections for homeowners contracting for home improvements and construction, by strengthening the original legislation that created the Texas Residential Construction Commission (TRCC) in 2003. This week, however, the Sunset Advisory Commission (SAC) released its staff report, recommending that the agency be abolished. Although McClendon serves on the SAC, she is not ready to abolish the agency at this point.
"I agree with many of the Sunset commission recommendations, but come far short of being ready to shut down the Texas Residential Construction Commission. Adequate consumer protections are still desperately needed, as well as meaningful regulation of builders and home improvement contractors. In fact, the Commission should be completely overhauled and provided with even stronger legislative and regulatory authority needed to address these concerns. Homeownership is a mainstay of family life for Texans, and homebuilding and remodeling are a large part of the building industry. Therefore, meaningful statutory tools for regulation and enforcement must be in place to protect both consumers and builders. That is the future we need to envision for the TRCC."
Agency activities since last year have shown a trend toward decreasing the number of lawsuits against builders, due to successful resolution of disputes through a voluntary inspection review and recommendation process. In addition, municipalities across the state have begun implementing the TRCC registration requirements before issuing building permits on those projects which require registration. These activities went a long way in providing public protection, however, "the changes did not go far enough," said McClendon. McClendon agrees with the Sunset Commission Advisory Report which states that "builders would benefit from having quality standards applied equally to everyone, and excluding unqualified and unscrupulous builders who discredit the field."
Representative McClendon's original proposal, House Bill 1686, was combined with House Bill 1038, which became law last year, after a nearly unanimous vote in the House and Senate. The purpose was to protect homeowners, in particular senior citizens, by requiring the majority of home remodeling and building contractors to register with the Texas Residential Construction Commission (TRCC) and be subject to its oversight. The 2007 legislation was intended to enhance the ability of the TRCC to resolve disputes between homeowners and builders, and to help consumers verify those builders registered with the TRCC in choosing their contractors. In turn, the 2007 legislation was meant to help reputable builders maintain successful businesses by cutting back on competition from unreliable builders.
Representative McClendon said, "Most builders and remodeling contractors are reputable business men and women. For those who are not, we must put more teeth in the law passed last year, so that homeowners and builders can be protected." In addition, Representative McClendon emphasized, "There have been too many horror stories of contractors who have taken money from elderly homeowners and left the job half-done, or not done at all. The legislation we passed last year was a good start, but more legislative improvements need to be made so the agency can stop those kinds of scams."
Representative McClendon serves on the House Committees on Appropriations and Pensions & Investments. Additionally, she is Chair of the House Committee on Rules & Resolutions. She also serves on the Sunset Advisory Commission, which oversees all agencies under the auspices of the State of Texas.
Attorney Trey Wilson, who regularly handles residential construction and construction defect cases,worked for Rep. McClendon during her freshman term as a State Representative during the 75th Legislative Session.
San Antonio) -- State Representative Ruth Jones McClendon (District 120, San Antonio) filed legislation last Session to increase the protections for homeowners contracting for home improvements and construction, by strengthening the original legislation that created the Texas Residential Construction Commission (TRCC) in 2003. This week, however, the Sunset Advisory Commission (SAC) released its staff report, recommending that the agency be abolished. Although McClendon serves on the SAC, she is not ready to abolish the agency at this point.
"I agree with many of the Sunset commission recommendations, but come far short of being ready to shut down the Texas Residential Construction Commission. Adequate consumer protections are still desperately needed, as well as meaningful regulation of builders and home improvement contractors. In fact, the Commission should be completely overhauled and provided with even stronger legislative and regulatory authority needed to address these concerns. Homeownership is a mainstay of family life for Texans, and homebuilding and remodeling are a large part of the building industry. Therefore, meaningful statutory tools for regulation and enforcement must be in place to protect both consumers and builders. That is the future we need to envision for the TRCC."
Agency activities since last year have shown a trend toward decreasing the number of lawsuits against builders, due to successful resolution of disputes through a voluntary inspection review and recommendation process. In addition, municipalities across the state have begun implementing the TRCC registration requirements before issuing building permits on those projects which require registration. These activities went a long way in providing public protection, however, "the changes did not go far enough," said McClendon. McClendon agrees with the Sunset Commission Advisory Report which states that "builders would benefit from having quality standards applied equally to everyone, and excluding unqualified and unscrupulous builders who discredit the field."
Representative McClendon's original proposal, House Bill 1686, was combined with House Bill 1038, which became law last year, after a nearly unanimous vote in the House and Senate. The purpose was to protect homeowners, in particular senior citizens, by requiring the majority of home remodeling and building contractors to register with the Texas Residential Construction Commission (TRCC) and be subject to its oversight. The 2007 legislation was intended to enhance the ability of the TRCC to resolve disputes between homeowners and builders, and to help consumers verify those builders registered with the TRCC in choosing their contractors. In turn, the 2007 legislation was meant to help reputable builders maintain successful businesses by cutting back on competition from unreliable builders.
Representative McClendon said, "Most builders and remodeling contractors are reputable business men and women. For those who are not, we must put more teeth in the law passed last year, so that homeowners and builders can be protected." In addition, Representative McClendon emphasized, "There have been too many horror stories of contractors who have taken money from elderly homeowners and left the job half-done, or not done at all. The legislation we passed last year was a good start, but more legislative improvements need to be made so the agency can stop those kinds of scams."
Representative McClendon serves on the House Committees on Appropriations and Pensions & Investments. Additionally, she is Chair of the House Committee on Rules & Resolutions. She also serves on the Sunset Advisory Commission, which oversees all agencies under the auspices of the State of Texas.
Attorney Trey Wilson, who regularly handles residential construction and construction defect cases,worked for Rep. McClendon during her freshman term as a State Representative during the 75th Legislative Session.
Sunset Commission Targets TRCC
This article appeared in the San Antonio Express News on August 19, 2008
AUSTIN — An agency created to resolve disputes between homeowners and builders is “fundamentally flawed” and should be abolished, the Sunset Advisory Commission staff said today.
“It’s really doing more harm to homeowners than good,” said Joey Longley, executive director of the commission. “It’s not something that we felt could be fixed without some massive overhaul. We think Texas is really better served without it.”
The Texas Residential Construction Commission will be up for reauthorization by the Legislature next year as part of the state’s sunset review process. This is the agency’s first review since it was created in 2003 with support of home builders who wanted a system to resolve disputes before homeowners could go to court.
Since its inception, consumers have griped about costs and delays in trying to resolve complaints through the agency process.
A state audit last year faulted the construction commission for sloppy record-keeping that made it difficult to determine how well complaints were being handled.
The staff review found problems with regulatory processes, including the requirements to register as a builder, the way bad builders are handled and the difficulties for homeowners trying to resolve disputes before filing a lawsuit.
“No other regulatory agency has a program with such a potentially devastating effect on consumers’ ability to seek their own remedies,” the report states.
Duane Waddill, executive director of the construction commission, said he “ardently disagreed” with the recommendation to abolish the agency.
He said 250 homeowners were able to resolve disputes in the past year without having to hire attorneys.
“They didn’t have to spend any money, didn’t have to hire a lawyer. We were able to help them,” Waddill said.
He said some inspections take too long but the board that governs the construction commission is taking steps to speed up that process.
Longley said it would cost the state $300,000 to abolish the commission because revenue from fees it charges builders exceeds the cost of running the agency, which has about 80 employees.
The report will be considered next month by the full commission.
Home builders, a powerful source of campaign donations to legislative candidates, are likely to fight to retain the agency. One of its main backers was Houston builder Bob Perry, who has given about $2.3 million to Texas candidates and causes in the past year.
If you are having trouble with the TRCC Complaint process, contact attorney Trey Wilson. San Antonio Attorney Trey Wilson and the staff of R L Wilson, P.C. Law Firm are intimately familiar with Residential Construction disputes in Texas. We regularly serve as attorneys for both owners and small builders in a variety of residential construction concerns, such as:
Negligent Inspections
Construction Loans
Deficient or defective construction
Builders' Risk Insurance policies
Residential Construction Contract Drafting
Construction Contract Disputes
TRCC complaints
TRCC Registration and Enforcement
Mechanics Liens
Materialman’s Liens
Payment issues
Unpaid subcontractors and suppliers
Defective design
Defective engineering
Foundation defects
Violations of the Texas Trust Act by Builders who fail to pay Subcontractors
Affidavits of Completion
State-Sponsored Inspection and Dispute Resolution Process (SIRP).
AUSTIN — An agency created to resolve disputes between homeowners and builders is “fundamentally flawed” and should be abolished, the Sunset Advisory Commission staff said today.
“It’s really doing more harm to homeowners than good,” said Joey Longley, executive director of the commission. “It’s not something that we felt could be fixed without some massive overhaul. We think Texas is really better served without it.”
The Texas Residential Construction Commission will be up for reauthorization by the Legislature next year as part of the state’s sunset review process. This is the agency’s first review since it was created in 2003 with support of home builders who wanted a system to resolve disputes before homeowners could go to court.
Since its inception, consumers have griped about costs and delays in trying to resolve complaints through the agency process.
A state audit last year faulted the construction commission for sloppy record-keeping that made it difficult to determine how well complaints were being handled.
The staff review found problems with regulatory processes, including the requirements to register as a builder, the way bad builders are handled and the difficulties for homeowners trying to resolve disputes before filing a lawsuit.
“No other regulatory agency has a program with such a potentially devastating effect on consumers’ ability to seek their own remedies,” the report states.
Duane Waddill, executive director of the construction commission, said he “ardently disagreed” with the recommendation to abolish the agency.
He said 250 homeowners were able to resolve disputes in the past year without having to hire attorneys.
“They didn’t have to spend any money, didn’t have to hire a lawyer. We were able to help them,” Waddill said.
He said some inspections take too long but the board that governs the construction commission is taking steps to speed up that process.
Longley said it would cost the state $300,000 to abolish the commission because revenue from fees it charges builders exceeds the cost of running the agency, which has about 80 employees.
The report will be considered next month by the full commission.
Home builders, a powerful source of campaign donations to legislative candidates, are likely to fight to retain the agency. One of its main backers was Houston builder Bob Perry, who has given about $2.3 million to Texas candidates and causes in the past year.
If you are having trouble with the TRCC Complaint process, contact attorney Trey Wilson. San Antonio Attorney Trey Wilson and the staff of R L Wilson, P.C. Law Firm are intimately familiar with Residential Construction disputes in Texas. We regularly serve as attorneys for both owners and small builders in a variety of residential construction concerns, such as:
Negligent Inspections
Construction Loans
Deficient or defective construction
Builders' Risk Insurance policies
Residential Construction Contract Drafting
Construction Contract Disputes
TRCC complaints
TRCC Registration and Enforcement
Mechanics Liens
Materialman’s Liens
Payment issues
Unpaid subcontractors and suppliers
Defective design
Defective engineering
Foundation defects
Violations of the Texas Trust Act by Builders who fail to pay Subcontractors
Affidavits of Completion
State-Sponsored Inspection and Dispute Resolution Process (SIRP).
Oversight: Legislators should take Sunset report seriously
From the Longview, TX News-Journal -- this editorial appeared on August 21, 2008
The Texas Sunset Review Commission doesn't garner many headlines, but it may have set itself up for a real scrap this week with its recommendation that the Legislature abolish the Texas Residential Construction Commission.
The TRCC, created five years ago after strident lobbying by home builders, is failing at its job, the Sunset Commission concluded. The Sunset report says that rather than resolve conflicts between builders and buyers, the TRCC has often frustrated consumers who have complaints about new homes.
Home builders, with Houston-based Bob Perry at the lead, clamored for the creation of the TRCC. They accepted some regulations that establish standards for builders to meet while establishing a conflict resolution process that consumers must follow instead of filing a law suit. Home buyers may only sue if they have followed the complaint process, which has proven slow and costly.
Consumer watchdogs have been critical of the TRCC from its inception, especially after Gov. Rick Perry's first appointments to the five-member commission included John Krugh, the general counsel for Perry Homes and the industry representative credited with writing much of the legislation that established the commission.
Despite their shared name, there is no familial relationship between the builder and the governor. There is, however, a very strong financial tie between Bob Perry and most of Texas' leading politicians. Bob Perry has repeatedly been the top political contributor in the state. Rick Perry has repeatedly been one of the top beneficiaries of those contributions.
So now it will be interesting to see whether the Legislature and the governor will heed the Sunset Commission's recommendation to abolish the TRCC.
Our leaders do have options. They could allow the TRCC to continue business as usual, frustrating hundreds of Texas home buyers who must wait months in the drawn-out process to find out whether the state will prod a builder to make good on repairs. On the other hand, they could try to overhaul the TRCC to give it more teeth to protect consumers and to regulate builders.
It's telling that the Sunset Commission concluded that no TRCC oversight would be preferable to the status quo. At least then, consumers would have the option of going straight to court to plead their case.
The Texas Association of Builders prefers the former course, with its vice president, Amarillo home buidler Ron Connally, calling the TRCC, "the consumers' most readily accessible and cost-effective path to resolution."
A consumers' group sees it differently, saying the system is backwards because it puts limits on the public, rather than on the home builders. "Indeed, homeowners — not builders — are the ones regulated by the TRCC," said Alex Winslow, director of Texas Watch.
Since the TRCC lacks the authority to force a builder to make repairs even when its inspectors do find in favor of the consumer, the agency does little to protect home buyers. According to the Sunset Commission, 88 percent of the disputes brought before the TRCC wind up in court anyway, adding to the frustration and delays confronting consumers.
The Sunset Commission report concludes: "No other regulatory agency has a program with such a potentially devastating effect on consumers' ability to seek their own remedies."
If Texas lawmakers don't recognize that as a call to step up and represent the interests of their constituents during the 2009 legislative session, we're not sure what will get their attention — unless it's a new surge of campaign contributions.
The Texas Sunset Review Commission doesn't garner many headlines, but it may have set itself up for a real scrap this week with its recommendation that the Legislature abolish the Texas Residential Construction Commission.
The TRCC, created five years ago after strident lobbying by home builders, is failing at its job, the Sunset Commission concluded. The Sunset report says that rather than resolve conflicts between builders and buyers, the TRCC has often frustrated consumers who have complaints about new homes.
Home builders, with Houston-based Bob Perry at the lead, clamored for the creation of the TRCC. They accepted some regulations that establish standards for builders to meet while establishing a conflict resolution process that consumers must follow instead of filing a law suit. Home buyers may only sue if they have followed the complaint process, which has proven slow and costly.
Consumer watchdogs have been critical of the TRCC from its inception, especially after Gov. Rick Perry's first appointments to the five-member commission included John Krugh, the general counsel for Perry Homes and the industry representative credited with writing much of the legislation that established the commission.
Despite their shared name, there is no familial relationship between the builder and the governor. There is, however, a very strong financial tie between Bob Perry and most of Texas' leading politicians. Bob Perry has repeatedly been the top political contributor in the state. Rick Perry has repeatedly been one of the top beneficiaries of those contributions.
So now it will be interesting to see whether the Legislature and the governor will heed the Sunset Commission's recommendation to abolish the TRCC.
Our leaders do have options. They could allow the TRCC to continue business as usual, frustrating hundreds of Texas home buyers who must wait months in the drawn-out process to find out whether the state will prod a builder to make good on repairs. On the other hand, they could try to overhaul the TRCC to give it more teeth to protect consumers and to regulate builders.
It's telling that the Sunset Commission concluded that no TRCC oversight would be preferable to the status quo. At least then, consumers would have the option of going straight to court to plead their case.
The Texas Association of Builders prefers the former course, with its vice president, Amarillo home buidler Ron Connally, calling the TRCC, "the consumers' most readily accessible and cost-effective path to resolution."
A consumers' group sees it differently, saying the system is backwards because it puts limits on the public, rather than on the home builders. "Indeed, homeowners — not builders — are the ones regulated by the TRCC," said Alex Winslow, director of Texas Watch.
Since the TRCC lacks the authority to force a builder to make repairs even when its inspectors do find in favor of the consumer, the agency does little to protect home buyers. According to the Sunset Commission, 88 percent of the disputes brought before the TRCC wind up in court anyway, adding to the frustration and delays confronting consumers.
The Sunset Commission report concludes: "No other regulatory agency has a program with such a potentially devastating effect on consumers' ability to seek their own remedies."
If Texas lawmakers don't recognize that as a call to step up and represent the interests of their constituents during the 2009 legislative session, we're not sure what will get their attention — unless it's a new surge of campaign contributions.
Tell the Sunset Commission to Abolish the Texas Residential Construction Commission (TRCC)
This editorial was taken directly from Texas Watch.org -- a non-partisan, advocacy organization working to improve consumer and insurance protections for Texas families.
Texas homebuilders have been given free rein to take advantage of ordinary Texans for far too long. We now have a unique opportunity to demand real reforms that will improve protections and options for Texas homeowners.
The staff of the Sunset Commission recently announced their recommendation that the TRCC be abolished, a move long-supported by consumer and homeowners organizations. The Texas Sunset Advisory Commission, a committee of lawmakers and citizens, is currently conducting a top-to-bottom review of the Texas Residential Construction Commission to recommend changes in the way Texas oversees the homebuilding industry. Make sure that the Commission hears your voice!
Texas homebuilders have been given free rein to take advantage of ordinary Texans for far too long. We now have a unique opportunity to demand real reforms that will improve protections and options for Texas homeowners.
The staff of the Sunset Commission recently announced their recommendation that the TRCC be abolished, a move long-supported by consumer and homeowners organizations. The Texas Sunset Advisory Commission, a committee of lawmakers and citizens, is currently conducting a top-to-bottom review of the Texas Residential Construction Commission to recommend changes in the way Texas oversees the homebuilding industry. Make sure that the Commission hears your voice!
Time to Abolsih the TRCC?
This editorial was taken directly from the San Antonio Express News, and appeared on August 25, 2008:
On paper, the Texas Residential Construction Commission sounded like a good idea. The Legislature created it during the 2003 session to resolve disputes between homeowners and homebuilders and keep those disputes from entering arbitration and an already-clogged court system.
The commission might have been a model for homebuilder dispute resolution. But from the very start, it was plagued by political missteps that doomed it to failure.
Critics contended that the resolution process was already stacked against homeowners before the commission went to work. So it was incumbent on lawmakers and Gov. Rick Perry — who appoints the nine commissioners — to create a new entity that leveled the playing field.
That wasn't likely to occur in Austin, where the campaign contributions and lobbyists of builders and developers are a potent force.
What happened, in fact, is that they tilted the field even further in the homebuilders' direction. By statute, six of the nine commission seats are designated for representatives of the homebuilding community. And the prescribed procedures placed additional costs and burdens of proof on homeowners.
The Texas Residential Construction Commission came up this year for its first review by the Sunset Advisory Commission. The sunset review process is supposed to eliminate waste and inefficiency in state agencies.
The sunset panel found a construction commission that was “fundamentally flawed.” “It's really doing more harm to homeowners than good,” the panel's executive director told the Express-News Austin Bureau.
The Sunset Advisory Commission recommends abolishing the Texas Residential Construction Commission. That's a recommendation that will be challenged mightily in the halls of the state Capitol.
But lawmakers — especially those inclined to rail against government waste — should heed the sunset review recommendation. More than being abolished, this once-promising, now-failed commission needs to be demolished.
On paper, the Texas Residential Construction Commission sounded like a good idea. The Legislature created it during the 2003 session to resolve disputes between homeowners and homebuilders and keep those disputes from entering arbitration and an already-clogged court system.
The commission might have been a model for homebuilder dispute resolution. But from the very start, it was plagued by political missteps that doomed it to failure.
Critics contended that the resolution process was already stacked against homeowners before the commission went to work. So it was incumbent on lawmakers and Gov. Rick Perry — who appoints the nine commissioners — to create a new entity that leveled the playing field.
That wasn't likely to occur in Austin, where the campaign contributions and lobbyists of builders and developers are a potent force.
What happened, in fact, is that they tilted the field even further in the homebuilders' direction. By statute, six of the nine commission seats are designated for representatives of the homebuilding community. And the prescribed procedures placed additional costs and burdens of proof on homeowners.
The Texas Residential Construction Commission came up this year for its first review by the Sunset Advisory Commission. The sunset review process is supposed to eliminate waste and inefficiency in state agencies.
The sunset panel found a construction commission that was “fundamentally flawed.” “It's really doing more harm to homeowners than good,” the panel's executive director told the Express-News Austin Bureau.
The Sunset Advisory Commission recommends abolishing the Texas Residential Construction Commission. That's a recommendation that will be challenged mightily in the halls of the state Capitol.
But lawmakers — especially those inclined to rail against government waste — should heed the sunset review recommendation. More than being abolished, this once-promising, now-failed commission needs to be demolished.
Thứ Sáu, 22 tháng 8, 2008
TREY WILSON OBTAINS TEMPORARY RESTRAINING ORDER AGAINST WATER COMPANY ON BEHALF OF ELDERLY CLIENTS
LOS FRESNOS SENIORS SUE EAST RIO HONDO WATER and OBTAIN TEMPORARY RESTRAINING ORDER RE-INSTATING WATER SERVICE
SUIT ALLEGES WATER DISCONNECTED IN RETALIATORY MANNER
Long-time Los Fresnos residents Carl and Janel Parker filed suit on Thursday against the East Rio Hondo Water Supply Corporation (ERHWSC) for a variety of claims arising out of the rural utility’s interruption of their water service. The elderly couple have been without water to their home since ERHWSC officials cut them off on August 13, based upon a disagreement over the appropriate location of an easement requested by the utility. The Parkers, have refused to give the utility what they call and “unreasonable and overly burdensome” easement across their property, which abuts FM 510. According to the Parker family’s attorney, Trey Wilson of San Antonio, the service interruption was made “purely in retaliatory fashion for the purpose of extorting compliance with a ridiculous easement request.” Judge Leonel Alejandro apparently agreed, and entered a Temporary Restraining Order commanding ERHWSC to restore water service to the couple until both sides can be heard in court on September 4.
Wilson, whose law practice largely involves representing water utilities, maintains that the Parkers have never missed a payment for water service, and have always been willing to give the utility a “reasonable and appropriate easement, but that hasn’t been good enough.” Instead, he alleges, ERHWSC terminated the Parker’s water service in violation of the Texas Water Code and Texas Commission on Environmental Quality’s (TCEQ) Rules, based upon “a flimsy argument arising from a poorly drafted service agreement.” The Parkers claim that ERHWSC has breached the agreement and intentionally inflicted severe emotional distress upon them as punishment for refusing the requested easement. They have asked the Court to interpret the service agreement, and issue a permanent injunction against the utility’s impairment of their water service.
The Parkers have worked and ranched in the Los Fresnos area for almost 75 years, and have been 14 year customers of the utility. Their water service was initially interrupted on August 31, but restored the next day after Wilson fired-off a letter warning of possible litigation and a request for TCEQ intervention. When the utility was unsuccessful in persuading the Parkers to grant the requested easement, their water service was terminated on August 13, and not restored until the utility was served with the TRO on Friday. Judge Alejandro will decide on September 4 whether to extend the TRO into a Temporary Injunction which would prevent the utility from interrupting the Parkers’ service until the case goes to trial. Wilson stated that he anxiously awaited his chance to demonstrate to the Court “the illegality of the utility’s vindictive attack on the health, safety and welfare of these elderly people,” and noted that ERHWSC had picked the “wrong family” to extort. “ The whole family has rallied around their parents and grandparents, Carl and Janel. ERHWSC better know Carl Parker is one tough hombre – as a young man he rode bulls and broncs, and served in the army. As an older man he’s recently whipped prostate cancer and survived being gored by an errant cow. Shutting off his water doesn’t bring him to his knees – it only makes him more ornery.”
SUIT ALLEGES WATER DISCONNECTED IN RETALIATORY MANNER
Long-time Los Fresnos residents Carl and Janel Parker filed suit on Thursday against the East Rio Hondo Water Supply Corporation (ERHWSC) for a variety of claims arising out of the rural utility’s interruption of their water service. The elderly couple have been without water to their home since ERHWSC officials cut them off on August 13, based upon a disagreement over the appropriate location of an easement requested by the utility. The Parkers, have refused to give the utility what they call and “unreasonable and overly burdensome” easement across their property, which abuts FM 510. According to the Parker family’s attorney, Trey Wilson of San Antonio, the service interruption was made “purely in retaliatory fashion for the purpose of extorting compliance with a ridiculous easement request.” Judge Leonel Alejandro apparently agreed, and entered a Temporary Restraining Order commanding ERHWSC to restore water service to the couple until both sides can be heard in court on September 4.
Wilson, whose law practice largely involves representing water utilities, maintains that the Parkers have never missed a payment for water service, and have always been willing to give the utility a “reasonable and appropriate easement, but that hasn’t been good enough.” Instead, he alleges, ERHWSC terminated the Parker’s water service in violation of the Texas Water Code and Texas Commission on Environmental Quality’s (TCEQ) Rules, based upon “a flimsy argument arising from a poorly drafted service agreement.” The Parkers claim that ERHWSC has breached the agreement and intentionally inflicted severe emotional distress upon them as punishment for refusing the requested easement. They have asked the Court to interpret the service agreement, and issue a permanent injunction against the utility’s impairment of their water service.
The Parkers have worked and ranched in the Los Fresnos area for almost 75 years, and have been 14 year customers of the utility. Their water service was initially interrupted on August 31, but restored the next day after Wilson fired-off a letter warning of possible litigation and a request for TCEQ intervention. When the utility was unsuccessful in persuading the Parkers to grant the requested easement, their water service was terminated on August 13, and not restored until the utility was served with the TRO on Friday. Judge Alejandro will decide on September 4 whether to extend the TRO into a Temporary Injunction which would prevent the utility from interrupting the Parkers’ service until the case goes to trial. Wilson stated that he anxiously awaited his chance to demonstrate to the Court “the illegality of the utility’s vindictive attack on the health, safety and welfare of these elderly people,” and noted that ERHWSC had picked the “wrong family” to extort. “ The whole family has rallied around their parents and grandparents, Carl and Janel. ERHWSC better know Carl Parker is one tough hombre – as a young man he rode bulls and broncs, and served in the army. As an older man he’s recently whipped prostate cancer and survived being gored by an errant cow. Shutting off his water doesn’t bring him to his knees – it only makes him more ornery.”
Thứ Ba, 19 tháng 8, 2008
EVICTIONS IN BEXAR COUNTY AND SAN ANTONIO, TEXAS: FROM FILING TO APPEAL
The Law
1. Texas Property Code (T.P.C.) 24.001 to 24.011.
2. Texas Rules of Civil Procedure (T.R.C.P.): Rules 738-755
Jurisdiction
A justice court in the precinct in which the real property is located has jurisdiction in eviction suits. Eviction suits include forcible entry and detainer and forcible detainer suits (T.P.C. # 24.004). Only issue to be determined is the right to actual possession. Merits of title cannot be determined.
Notice to Vacate
1. Written notice must be given prior to filing eviction suit.
2. 3 day notice must be given for non-payment of rent and/or violation of lease.
If a written lease contract exists stipulating a different notice time, that stipulation must be followed. Unless your lease states otherwise, either party can terminate a month-to-month lease at any time by giving the other party a 30-day notice.
DELIVERING THE NOTICE TO VACATE
Either the owner or owner's agent can hand deliver or mail the notice under Sec. 24.005. There is no statute, rule or case law which requires the constable or sheriff to serve such notices. In fact, the constable or sheriff - if in uniform - cannot personally serve them.
HAND DELIVERING OR MAILING THE NOTICE TO VACATE
A. Hand deliver to tenant or any person residing at the premises who is 16 years of age or older (NOTE: it may be helpful to have a witness).
B. Regular or Certified mail.
C. Attaching notice to inside of main entry of the premises (Always keep a copy of the notice to vacate).
After notice is given and tenant does not vacate the premises, a complaint for eviction would need to be filed in the precinct where the property is located. The complaint will describe the lands, tenements, or premises. The possession of which is claimed, with sufficient certainty to identify the same and shall also state the facts which entitle the complainant to the possession (T.R.C.P. 741). At the time of filing the complaint, the landlord will be given a date and time to appear for court. Also at that time a citation will be prepared notifying the tenant of the hearing.
TRIAL
1. If the defendant fails to appear before the case is called for trial, JP can enter a default judgment. (T.R.C.P. 743)
2. If plaintiff fails to appear when case is called for trial, JP may, on motion of defendant, dismiss suit. (T.R.C.P. 543)
3. Any party can request a jury trial on or before 5 days from the date the defendant is served with the citation by paying a $5.00 fee.
4. Parties may represent themselves or be represented by authorized agents (who do not have to be attorneys) when case involves non-payment of rent holding over beyond rental term.
5. The party that wins is entitled to court costs. Attorney's fees are recoverable only if special 10-day notice is given or if written lease entitles landlord to them. (T.P.C. #24.006)
APPEAL
1. No motion for a new trial will be filed.
2. Either party may appeal to County Court by filing an Appeal Bond or Pauper's Affidavit (T.R.C.P. 749 & 749A) within 5 days from the date of judgment.
3. T.R.C.P. 750 Form of Appeal Bond.
4. Party appealing has the duty to notify the other side of the filing of the bond (T.R.C.P. 749)
5. Trial de novo in County Court which is entitled to precedence. When appealed, JP stays further proceedings and files transcript in county clerk's office. (T.R.C.P. 751)
WRIT OF POSSESSION
1. Cost of writ is $165.00.
2. If tenant fails to vacate the property after the expiration of 5 days from the day of judgment was entered which is required by law, on the 6th day the landlord may request a writ of possession. A writ of possession allows the constable to oversee the move-out of the defendant(s) from the leased premises, and insure no breach of peace is violated.
3. Officer may post warning on front door that writ will be executed at future date and time, and may engage services of warehouseman to remove and store property. (T.P.C. #24.0062 deals with warehouseman's lien.)
4. Officer may not require landlord to store property.
5. Officer may, if necessary, use reasonable force in executing writ.
1. Texas Property Code (T.P.C.) 24.001 to 24.011.
2. Texas Rules of Civil Procedure (T.R.C.P.): Rules 738-755
Jurisdiction
A justice court in the precinct in which the real property is located has jurisdiction in eviction suits. Eviction suits include forcible entry and detainer and forcible detainer suits (T.P.C. # 24.004). Only issue to be determined is the right to actual possession. Merits of title cannot be determined.
Notice to Vacate
1. Written notice must be given prior to filing eviction suit.
2. 3 day notice must be given for non-payment of rent and/or violation of lease.
If a written lease contract exists stipulating a different notice time, that stipulation must be followed. Unless your lease states otherwise, either party can terminate a month-to-month lease at any time by giving the other party a 30-day notice.
DELIVERING THE NOTICE TO VACATE
Either the owner or owner's agent can hand deliver or mail the notice under Sec. 24.005. There is no statute, rule or case law which requires the constable or sheriff to serve such notices. In fact, the constable or sheriff - if in uniform - cannot personally serve them.
HAND DELIVERING OR MAILING THE NOTICE TO VACATE
A. Hand deliver to tenant or any person residing at the premises who is 16 years of age or older (NOTE: it may be helpful to have a witness).
B. Regular or Certified mail.
C. Attaching notice to inside of main entry of the premises (Always keep a copy of the notice to vacate).
After notice is given and tenant does not vacate the premises, a complaint for eviction would need to be filed in the precinct where the property is located. The complaint will describe the lands, tenements, or premises. The possession of which is claimed, with sufficient certainty to identify the same and shall also state the facts which entitle the complainant to the possession (T.R.C.P. 741). At the time of filing the complaint, the landlord will be given a date and time to appear for court. Also at that time a citation will be prepared notifying the tenant of the hearing.
TRIAL
1. If the defendant fails to appear before the case is called for trial, JP can enter a default judgment. (T.R.C.P. 743)
2. If plaintiff fails to appear when case is called for trial, JP may, on motion of defendant, dismiss suit. (T.R.C.P. 543)
3. Any party can request a jury trial on or before 5 days from the date the defendant is served with the citation by paying a $5.00 fee.
4. Parties may represent themselves or be represented by authorized agents (who do not have to be attorneys) when case involves non-payment of rent holding over beyond rental term.
5. The party that wins is entitled to court costs. Attorney's fees are recoverable only if special 10-day notice is given or if written lease entitles landlord to them. (T.P.C. #24.006)
APPEAL
1. No motion for a new trial will be filed.
2. Either party may appeal to County Court by filing an Appeal Bond or Pauper's Affidavit (T.R.C.P. 749 & 749A) within 5 days from the date of judgment.
3. T.R.C.P. 750 Form of Appeal Bond.
4. Party appealing has the duty to notify the other side of the filing of the bond (T.R.C.P. 749)
5. Trial de novo in County Court which is entitled to precedence. When appealed, JP stays further proceedings and files transcript in county clerk's office. (T.R.C.P. 751)
WRIT OF POSSESSION
1. Cost of writ is $165.00.
2. If tenant fails to vacate the property after the expiration of 5 days from the day of judgment was entered which is required by law, on the 6th day the landlord may request a writ of possession. A writ of possession allows the constable to oversee the move-out of the defendant(s) from the leased premises, and insure no breach of peace is violated.
3. Officer may post warning on front door that writ will be executed at future date and time, and may engage services of warehouseman to remove and store property. (T.P.C. #24.0062 deals with warehouseman's lien.)
4. Officer may not require landlord to store property.
5. Officer may, if necessary, use reasonable force in executing writ.
Thứ Bảy, 16 tháng 8, 2008
Contracts for Deed -- Legal but Unadvisable!
A contract for deed is an agreement for the sale of real property from a seller to a buyer which is financed by the seller. The buyer takes possession of the property upon signing the contract for deed. Contracts for deed are often referred to as "rent to own" financing arrangements, and are legal in Texas. However, they are not preferred. Under this arrangement, the buyer will make payments to the seller in monthly installments under the terms of the contract for deed. If and when the buyer completes the payments (often after several years of payments) then the seller conveys the property to the buyer by a warranty deed. A contract for deed is often used by developers to sell housing to lower income families in lieu of traditional seller-financed transactions (Warranty Deed, Real Estate Lien Note, and Deed of Trust).
One of the most important differences between a contract for deed and a conventional purchase contract is that under the "contract for deed" the buyer generally does not gain immediate equity in the property as he makes payments. Under a contract for deed arrangement, the buyer only has an equity interest after they have paid 40% of the loan or more, or have made 48 monthly payments. That means that any default made before this time results in the Seller simply classifying those payments as "rent."
As a matter of Texas law, contracts for deed are considered executory contracts, not security devices. In Texas, it is widely held that until the purchase price is paid in full the Buyer under a contract for deed has only an “equitable right” to complete the contract, not equitable title to the property. See Johnson v. Wood, 157 S.W.2d 146 (Tex. Comm’n App. 1941, opinion adopted). The reasoning in Johnson has reflected the law in Texas for over 60 years and has been followed by numerous courts. See Clinton Park Dev. v. Commissioner, 209 F.2d 951 (5th Cir. 1954); Gaona v. Gonzales, 997 S.W.2d 784 (Tex. App.—Austin 1999, no pet.); Club Corp. of Am. v. Concerned Prop. Owners, 881 S.W.2d 620 (Tex. App.—Beaumont 1994, writ denied); Texas Am. Bank/Levelland v. Resendez, 706 S.W.2d 343 (Tex. App.—Houston 1986, no writ); Guzman v. Acuna, 653 S.W.2d 315 (Tex. App—San Antonio 1983, writ dism’d w.o.j.); Neeley v. Intercity Mgmt. Corp., 623 S.W.2d 942 (Tex. App.—Houston 1981, no writ); Jensen v. Bryson, 614 S.W.2d 930 (Tex. Civ. App.—Amarillo 1981, no writ); Bradford v. Cole, 570 S.W.2d 171 (Tex. Civ. App.—Texarkana 1978, writ dism’d w.o.j.). Indeed, not long after statehood the Texas Supreme Court distinguished between the equitable right that a Buyer receives ab initio under a contract for deed and the equitable title he receives when the purchase price is paid in full. See Browning v. Estes, 3 Tex. 462 (1848); Hemming v. Zimmerschitte, 4 Tex. 159 (1849).
Contracts for deed can also have strict conditions. Some consumers with a contract for deed have lost their homes because they were a few days late on one payment. This meant that despite making timely payments for years, the contract forced them to leave the property with no stake in the investment. It is therefore critically important for a Buyer to know exactly what type of real estate purchase and financing contract they are signing!
The abuses related to "Contract for Deed" financing mechanisms were laregely abated by House Bill 1823, which became effective on September 1, 2005. This legislation greatly expanded the Texas law governing contracts for deed to apply to home leases that contain purchase options. More specifically, House Bill 1823 amended section 5.062 of the texas Property Code to include the following language, which applies to application of "Contract for Deed" laws:
"[A]n option to purchase real property that includes or is combined or executed concurrently with a residential lease agreement, together with the lease, is considered an executory contract for conveyance of real property."
This means that any lease of residential property accompanied by an option to purchase the property, constitutes a single Contract for Deed transaction (lease and option agreement together = contract for deed).
In addition, HB 1823 required Sellers to provide a large array of services, disclosures and safeguards designed to protect Buyers under a contract for deed. This legislation, which is now incorporated into the Texas Property Code, has made it burdensome and periolous to for sellers to use a "contract for deed" in owner-financed transactions.
Nevertheless, if you are entering into a real estate purchase or sale, you should contact an experienced attorney to provide you with guidance and advice concerning the best legal way to accomplish your sale. Trey Wilson is a licensed attorney and real estate agent, who is experienced in drafting, interpreting and explaining real estate sale and purchase documents. Contact attorney Trey Wilson at (210) 223-4100 or rlw3d@sa-law.com
One of the most important differences between a contract for deed and a conventional purchase contract is that under the "contract for deed" the buyer generally does not gain immediate equity in the property as he makes payments. Under a contract for deed arrangement, the buyer only has an equity interest after they have paid 40% of the loan or more, or have made 48 monthly payments. That means that any default made before this time results in the Seller simply classifying those payments as "rent."
As a matter of Texas law, contracts for deed are considered executory contracts, not security devices. In Texas, it is widely held that until the purchase price is paid in full the Buyer under a contract for deed has only an “equitable right” to complete the contract, not equitable title to the property. See Johnson v. Wood, 157 S.W.2d 146 (Tex. Comm’n App. 1941, opinion adopted). The reasoning in Johnson has reflected the law in Texas for over 60 years and has been followed by numerous courts. See Clinton Park Dev. v. Commissioner, 209 F.2d 951 (5th Cir. 1954); Gaona v. Gonzales, 997 S.W.2d 784 (Tex. App.—Austin 1999, no pet.); Club Corp. of Am. v. Concerned Prop. Owners, 881 S.W.2d 620 (Tex. App.—Beaumont 1994, writ denied); Texas Am. Bank/Levelland v. Resendez, 706 S.W.2d 343 (Tex. App.—Houston 1986, no writ); Guzman v. Acuna, 653 S.W.2d 315 (Tex. App—San Antonio 1983, writ dism’d w.o.j.); Neeley v. Intercity Mgmt. Corp., 623 S.W.2d 942 (Tex. App.—Houston 1981, no writ); Jensen v. Bryson, 614 S.W.2d 930 (Tex. Civ. App.—Amarillo 1981, no writ); Bradford v. Cole, 570 S.W.2d 171 (Tex. Civ. App.—Texarkana 1978, writ dism’d w.o.j.). Indeed, not long after statehood the Texas Supreme Court distinguished between the equitable right that a Buyer receives ab initio under a contract for deed and the equitable title he receives when the purchase price is paid in full. See Browning v. Estes, 3 Tex. 462 (1848); Hemming v. Zimmerschitte, 4 Tex. 159 (1849).
Contracts for deed can also have strict conditions. Some consumers with a contract for deed have lost their homes because they were a few days late on one payment. This meant that despite making timely payments for years, the contract forced them to leave the property with no stake in the investment. It is therefore critically important for a Buyer to know exactly what type of real estate purchase and financing contract they are signing!
The abuses related to "Contract for Deed" financing mechanisms were laregely abated by House Bill 1823, which became effective on September 1, 2005. This legislation greatly expanded the Texas law governing contracts for deed to apply to home leases that contain purchase options. More specifically, House Bill 1823 amended section 5.062 of the texas Property Code to include the following language, which applies to application of "Contract for Deed" laws:
"[A]n option to purchase real property that includes or is combined or executed concurrently with a residential lease agreement, together with the lease, is considered an executory contract for conveyance of real property."
This means that any lease of residential property accompanied by an option to purchase the property, constitutes a single Contract for Deed transaction (lease and option agreement together = contract for deed).
In addition, HB 1823 required Sellers to provide a large array of services, disclosures and safeguards designed to protect Buyers under a contract for deed. This legislation, which is now incorporated into the Texas Property Code, has made it burdensome and periolous to for sellers to use a "contract for deed" in owner-financed transactions.
Nevertheless, if you are entering into a real estate purchase or sale, you should contact an experienced attorney to provide you with guidance and advice concerning the best legal way to accomplish your sale. Trey Wilson is a licensed attorney and real estate agent, who is experienced in drafting, interpreting and explaining real estate sale and purchase documents. Contact attorney Trey Wilson at (210) 223-4100 or rlw3d@sa-law.com
FROM HUD -- TIPS ON AVOIDING FORECLOSURE
This material was taken directly from the HUD website.
1. Don't ignore the problem.
The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.
2. Contact your lender as soon as you realize that you have a problem.
Lenders do not want your house. They have options to help borrowers through difficult financial times.
3. Open and respond to all mail from your lender.
The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include important notice of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.
4. Know your mortgage rights.
Find your loan documents and read them so you know what your lender may do if you can't make your payments. Learn about the foreclosure laws and timeframes in your state (as every state is different) by contacting the State Government Housing Office.
5. Understand foreclosure prevention options.
Valuable information about foreclosure prevention (also called loss mitigation) options can be found on the internet at portal.hud.gov/portal/page?_pageid=33,717348&_dad=portal&_schema=PORTAL .
6. Contact a HUD-approved housing counselor.
The U.S. Department of Housing and Urban Development (HUD) funds free or very low cost housing counseling nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender if you need this assistance. Find a HUD-approved housing counselor near you or call (800) 569-4287 or TTY (800) 877-8339.
7. Prioritize your spending.
After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses-cable TV, memberships, entertainment-that you can eliminate. Delay payments on credit cards and other "unsecured" debt until you have paid your mortgage.
8. Use your assets.
Do you have assets-a second car, jewelry, a whole life insurance policy-that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don't significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.
9. Avoid foreclosure prevention companies.
You don't need to pay fees for foreclosure prevention help-use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month's mortgage payment) for information and services your lender or a HUD approved housing counselor will provide free if you contact them.
10. Don't lose your house to foreclosure recovery scams!
If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional, or a HUD approved housing counselor.
Sometimes an experienced real estate lawyer can temporarily stop a foreclosure by otaining a Temporary Restraining Order. Since foreclosures occur only once a month (the first Tuesday of each month), the TRO usually stalls foreclosure for about 30 days. Many time the delay a TRO brings allows the homeowner the time to find the funds to cure a mortgage loan default, or obtain alternate financing, thereby avoiding foreclosure altogether. If you are facing immediate foreclosure, and want to try to save your home through the Court system, call attorney Trey Wilson at (210) 223-4100, or visit www.sa-law.com.
1. Don't ignore the problem.
The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.
2. Contact your lender as soon as you realize that you have a problem.
Lenders do not want your house. They have options to help borrowers through difficult financial times.
3. Open and respond to all mail from your lender.
The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include important notice of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.
4. Know your mortgage rights.
Find your loan documents and read them so you know what your lender may do if you can't make your payments. Learn about the foreclosure laws and timeframes in your state (as every state is different) by contacting the State Government Housing Office.
5. Understand foreclosure prevention options.
Valuable information about foreclosure prevention (also called loss mitigation) options can be found on the internet at portal.hud.gov/portal/page?_pageid=33,717348&_dad=portal&_schema=PORTAL .
6. Contact a HUD-approved housing counselor.
The U.S. Department of Housing and Urban Development (HUD) funds free or very low cost housing counseling nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender if you need this assistance. Find a HUD-approved housing counselor near you or call (800) 569-4287 or TTY (800) 877-8339.
7. Prioritize your spending.
After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses-cable TV, memberships, entertainment-that you can eliminate. Delay payments on credit cards and other "unsecured" debt until you have paid your mortgage.
8. Use your assets.
Do you have assets-a second car, jewelry, a whole life insurance policy-that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don't significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.
9. Avoid foreclosure prevention companies.
You don't need to pay fees for foreclosure prevention help-use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month's mortgage payment) for information and services your lender or a HUD approved housing counselor will provide free if you contact them.
10. Don't lose your house to foreclosure recovery scams!
If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional, or a HUD approved housing counselor.
Sometimes an experienced real estate lawyer can temporarily stop a foreclosure by otaining a Temporary Restraining Order. Since foreclosures occur only once a month (the first Tuesday of each month), the TRO usually stalls foreclosure for about 30 days. Many time the delay a TRO brings allows the homeowner the time to find the funds to cure a mortgage loan default, or obtain alternate financing, thereby avoiding foreclosure altogether. If you are facing immediate foreclosure, and want to try to save your home through the Court system, call attorney Trey Wilson at (210) 223-4100, or visit www.sa-law.com.
Đăng ký:
Bài đăng (Atom)