Have you ever wondered who the individuals are that are charged with regulating and overseeing homebuilders in the State of Texas? After all, the State has surely placed highly qualified, unbiased, and consumer-concious individuals at the helm of the agency created for the purpose of "promoting quality construction for Texans by registering industry members and residential construction projects; providing information and educating homeowners and the residential construction industry; acting as a resource for complainants; and offering a neutral, technical review of alleged post-construction defects," Right? You might just be surprised.
By law, the Texas Residential Construction Commission is comprised of nine members appointed by the Governor: four registered builders, three members of the general public, one engineer who practices in the area of residential construction and one either architect or inspector who practices in the area of residential construction. The Commission members serve six-year staggered terms.
Here is a list of the current members:
COMMISSIONER Paulo Flores (Chair) - Dallas, Texas
COMMISSIONER Glenda Mariott (Vice Chair) - College Station, Texas
COMMISSIONER Lewis Brown (Secretary) - Trinity, Texas
COMMISSIONER Art Cuevas - Lubbock, Texas
COMMISSIONER Kenneth Davis, P.E. - Weatherford, Texas
COMMISSIONER Gerardo "Jerry" Garcia - Corpus Christi, Texas
COMMISSIONER John Krugh - Houston, Texas
COMMISSIONER Steven Leipsner - Lakeway, Texas
COMMISSIONER Mickey Redwine - Ben Wheeler, Texas
here are some of their "unofficial" affiliations, which might cause the average Texas consumer a little discontent:
J. Paulo Flores: Chairman. Mr. Flores is a distinguished lawyer with impressive credentials. But...who have his clients have been for the past 20 years? This would be interesting to know.
Glenda Marriott, Vice Chair. She is the Vice-President of Marriott Homes, Inc. This corporation is a Builder, registered with TRCC under builder number 1003. As of the date of this posting, they have registered 172 homes with the TRCC.
Lewis Brown, Commissioner. Mr. Brown is an inspector and the proprietor of Brown's Inspection Service, LLC. he was once a prominent member of the Greater Houston Builders Association. Note who GHBA is, and who its members are.
Art Cuevas, Commissioner. he is a Builder and the president of Art Cuevas Construction -- TRCC registered builder 1001, with 51 homes registered as of today.
Jerry Garcia, Commissioner. He is President of Hacienda Construction, Inc. This coporation has TRCC registration number 2444, with 10 homes registered. As past president of the Corpus Christi Builders Association, a Life Director for the Texas Association of Builders and a Director for the National Association of Homebuilders, Mr. Garcia is hardly a consumer advocate.
John Krugh, Commissioner. Senior Vice President and Corporate Counsel for Perry Homes. Perry Homes is among the largest builders in the nation. Perry is registered under TRCC number 1040, and has 12559 homes registered with TRCC.
Steven Leipsner, Commissioner. Former Executive Vice President of the Marriott Corporation.
Mickey Redwine, Commissioner. President of Dynamic Cable Construction Company, L.P.
Trey Wilson is a construction, real estate, evictions and water lawyer in San Antonio Texas. He routinely represents homeowners in claims for defective construction and residential project abandonment. he may be reached at www.sa-law.com or 210/223-4100
Hiển thị các bài đăng có nhãn Texas Residential Construction Commission. Hiển thị tất cả bài đăng
Hiển thị các bài đăng có nhãn Texas Residential Construction Commission. Hiển thị tất cả bài đăng
Thứ Tư, 17 tháng 9, 2008
TRCC Bites Back to Sunset Slam -- Beleagured Construction Commission Issues Response and "News Release" to Abolition Recommendation
In a somewhat telling attempt to salvage an agency's very existence and preserve the jobs of professional bureaucrats, the TRCC published a "News Release" in Response to the Texas Sunset Advisory Committee's recommendation that TRCC be dismantled. The News Release contains only a portion of TRCC "management's response" to the Sunset Report issued in late August, but purports to "offer solutions" to "issues identified but not addressed" in that report. Recall, if you will, that the Sunsetters determined that TRCC was essentially dysfunctional and needs to be abolished. (See earlier blog posts). My favorite portion of the management response is a quote by the regulatory agency's Chairman, Paulo Flores:
Chairman Flores' statement seems to dance around the fact that, ever since its creation by the Legislature in 1977, the statutory purpose of the Sunset Advisory Commission is to "identify and eliminate waste, duplication, and inefficiency in government agencies." In order to perform that function, the Sunsetters "question the need for each agency, look for potential duplication of other public services or programs, and consider new and innovative changes to improve each agency's operations and activities." In what I consider to be an insightful conclusion, Sunset Review of the TRCC has made the "sun shine" on that agency's flawed existence.
As an attorney who regularly represents Texas homeowners who suffer from construction defects or have been cheated, defrauded and sometimes plain robbed by unscrupulous builders, my experience has been that the Texas Residential Construction Commission is biased in favor of builders and against owners. In my opinion, this bias has been played out by the TRCC through blatant adoption of cumbersome Rules, expensive processes, and ineffectual communications. Though I deal with legal issues relating to residential construction on a daily basis, I have experience virtually nothing positive about the TRCC scheme.
Like TRCC Chairman Flores, I believe that Texas' 28,000 builders need regulatory oversight. I also believe that Texas homeowners need strict consumer protections against unethical builders. However, I disagree that the TRCC is the best agency to provide that oversight -- especially given its cozy relationship with builders, and the absence of any enforcement teeth.
In the end, the next Legislature will decide how best to handle TRCC. Though the agency has some friends in the Lege, it is worth noting that, in most cases, agencies under Sunset review are automatically abolished unless legislation is enacted to continue them.
Read the Sunset Advisory Commission's Staff Report on the TRCC here. The entire TRCC Response is available here.
“The Texas Residential Construction Commission adamantly disagrees with the Sunset Commission staff recommendation to eliminate builder oversight in Texas. Just because the Commission does not fit that staff’s standard and somewhat restricted view of what a regulatory agency should look like does not mean that the regulatory structure is fundamentally flawed.”
Chairman Flores' statement seems to dance around the fact that, ever since its creation by the Legislature in 1977, the statutory purpose of the Sunset Advisory Commission is to "identify and eliminate waste, duplication, and inefficiency in government agencies." In order to perform that function, the Sunsetters "question the need for each agency, look for potential duplication of other public services or programs, and consider new and innovative changes to improve each agency's operations and activities." In what I consider to be an insightful conclusion, Sunset Review of the TRCC has made the "sun shine" on that agency's flawed existence.
As an attorney who regularly represents Texas homeowners who suffer from construction defects or have been cheated, defrauded and sometimes plain robbed by unscrupulous builders, my experience has been that the Texas Residential Construction Commission is biased in favor of builders and against owners. In my opinion, this bias has been played out by the TRCC through blatant adoption of cumbersome Rules, expensive processes, and ineffectual communications. Though I deal with legal issues relating to residential construction on a daily basis, I have experience virtually nothing positive about the TRCC scheme.
Like TRCC Chairman Flores, I believe that Texas' 28,000 builders need regulatory oversight. I also believe that Texas homeowners need strict consumer protections against unethical builders. However, I disagree that the TRCC is the best agency to provide that oversight -- especially given its cozy relationship with builders, and the absence of any enforcement teeth.
In the end, the next Legislature will decide how best to handle TRCC. Though the agency has some friends in the Lege, it is worth noting that, in most cases, agencies under Sunset review are automatically abolished unless legislation is enacted to continue them.
Read the Sunset Advisory Commission's Staff Report on the TRCC here. The entire TRCC Response is available here.
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
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
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
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.
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