Texas 2009 - 81st Regular

Texas House Bill HB1635 Compare Versions

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1	1	81R2723 UM-D
2	2	By: Smith of Tarrant H.B. No. 1635
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the abolition of the Texas Residential Construction
8	8	Commission.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. (a) The Texas Residential Construction
11	11	Commission is abolished effective February 1, 2010.
12	12	(b) The following statutes are repealed:
13	13	(1) Section 214.906, Local Government Code;
14	14	(2) Title 16, Property Code;
15	15	(3) Section 5.016, Property Code, as added by Section
16	16	1, Chapter 843 (H.B. 1038), Acts of the 80th Legislature, Regular
17	17	Session, 2007; and
18	18	(4) Sections 27.001(3) and (9), 27.004(l), and
19	19	27.007(c), Property Code.
20	20	SECTION 2. (a) The Texas Facilities Commission shall take
21	21	custody of the property, records, or other assets of the Texas
22	22	Residential Construction Commission unless the governor designates
23	23	another appropriate governmental entity to take custody of the
24	24	property, records, or other assets.
25	25	(b) If the Texas Residential Construction Commission has a
26	26	continuing valid and enforceable obligation, including bonded
27	27	indebtedness, Section 325.017(f), Government Code, applies in
28	28	relation to the continuing obligation of the commission.
29	29	SECTION 3. Sections 59.011(a) and (c), Finance Code, are
30	30	amended to read as follows:
31	31	(a) For purposes of Chapter 27, Property Code, [and Title
32	32	16, Property Code,] a federally insured financial institution
33	33	regulated under this code is not a builder.
34	34	(c) A builder hired by a lender to complete the construction
35	35	of a foreclosed home is not liable for any construction defects of
36	36	which the builder had no knowledge that existed prior to the
37	37	acquisition of the home by the lender, but the builder is subject to
38	38	Chapter 27, Property Code, [and Title 16, Property Code,] for work
39	39	performed for the lender subsequent to the acquisition of the home
40	40	by the lender.
41	41	SECTION 4. Sections 27.001(4), (5), and (8), Property Code,
42	42	are amended to read as follows:
43	43	(4) "Construction defect" [has the meaning assigned by
44	44	Section 401.004 for an action to which Subtitle D, Title 16, applies
45	45	and for any other action] means a matter concerning the design,
46	46	construction, or repair of a new residence, of an alteration of or
47	47	repair or addition to an existing residence, or of an appurtenance
48	48	to a residence, on which a person has a complaint against a
49	49	contractor. The term may include any physical damage to the
50	50	residence, any appurtenance, or the real property on which the
51	51	residence and appurtenance are affixed proximately caused by a
52	52	construction defect.
53	53	(5) "Contractor":
54	54	(A) means:
55	55	(i) a person [builder, as defined by
56	56	Section 401.003,] contracting with an owner for the construction or
57	57	repair of a new residence, for the repair or alteration of or an
58	58	addition to an existing residence, or for the construction, sale,
59	59	alteration, addition, or repair of an appurtenance to a new or
60	60	existing residence;
61	61	(ii) any person contracting with a
62	62	purchaser for the sale of a new residence constructed by or on
63	63	behalf of that person; or
64	64	(iii) a person contracting with an owner or
65	65	the developer of a condominium for the construction of a new
66	66	residence, for an alteration of or an addition to an existing
67	67	residence, for repair of a new or existing residence, or for the
68	68	construction, sale, alteration, addition, or repair of an
69	69	appurtenance to a new or existing residence; and
70	70	(B) includes:
71	71	(i) an owner, officer, director,
72	72	shareholder, partner, or employee of the contractor; and
73	73	(ii) a risk retention group registered
74	74	under Chapter 2201 [Article 21.54], Insurance Code, that insures
75	75	all or any part of a contractor's liability for the cost to repair a
76	76	residential construction defect.
77	77	(8) "Structural failure" [has the meaning assigned by
78	78	Section 401.002 for an action to which Subtitle D, Title 16, applies
79	79	and for any other action] means actual physical damage to the
80	80	load-bearing portion of a residence caused by a failure of the
81	81	load-bearing portion.
82	82	SECTION 5. Section 27.002(b), Property Code, is amended to
83	83	read as follows:
84	84	(b) To [Except as provided by this subsection, to] the
85	85	extent of conflict between this chapter and any other law,
86	86	including the Deceptive Trade Practices-Consumer Protection Act
87	87	(Subchapter E, Chapter 17, Business & Commerce Code) or a common law
88	88	cause of action, this chapter prevails. [To the extent of conflict
89	89	between this chapter and Title 16, Title 16 prevails.]
90	90	SECTION 6. Section 27.003(a), Property Code, is amended to
91	91	read as follows:
92	92	(a) In an action to recover damages or other relief arising
93	93	from a construction defect:
94	94	(1) a contractor is not liable for any percentage of
95	95	damages caused by:
96	96	(A) negligence of a person other than the
97	97	contractor or an agent, employee, or subcontractor of the
98	98	contractor;
99	99	(B) failure of a person other than the contractor
100	100	or an agent, employee, or subcontractor of the contractor to:
101	101	(i) take reasonable action to mitigate the
102	102	damages; or
103	103	(ii) take reasonable action to maintain the
104	104	residence;
105	105	(C) normal wear, tear, or deterioration;
106	106	(D) normal shrinkage due to drying or settlement
107	107	of construction components within the tolerance of building
108	108	standards; or
109	109	(E) the contractor's reliance on written
110	110	information relating to the residence, appurtenance, or real
111	111	property on which the residence and appurtenance are affixed that
112	112	was obtained from official government records, if the written
113	113	information was false or inaccurate and the contractor did not know
114	114	and could not reasonably have known of the falsity or inaccuracy of
115	115	the information; and
116	116	(2) if an assignee of the claimant or a person
117	117	subrogated to the rights of a claimant fails to provide the
118	118	contractor with the written notice and opportunity to inspect and
119	119	offer to repair required by Section 27.004 [or fails to request
120	120	state-sponsored inspection and dispute resolution under Chapter
121	121	428, if applicable,] before performing repairs, the contractor is
122	122	not liable for the cost of any repairs or any percentage of damages
123	123	caused by repairs made to a construction defect at the request of an
124	124	assignee of the claimant or a person subrogated to the rights of a
125	125	claimant by a person other than the contractor or an agent,
126	126	employee, or subcontractor of the contractor.
127	127	SECTION 7. Sections 27.004(a), (b), (c), and (d), Property
128	128	Code, are amended to read as follows:
129	129	(a) Before [In a claim not subject to Subtitle D, Title 16,
130	130	before] the 60th day preceding the date a claimant seeking from a
131	131	contractor damages or other relief arising from a construction
132	132	defect initiates an action, the claimant shall give written notice
133	133	by certified mail, return receipt requested, to the contractor, at
134	134	the contractor's last known address, specifying in reasonable
135	135	detail the construction defects that are the subject of the
136	136	complaint. On the request of the contractor, the claimant shall
137	137	provide to the contractor any evidence that depicts the nature and
138	138	cause of the defect and the nature and extent of repairs necessary
139	139	to remedy the defect, including expert reports, photographs, and
140	140	videotapes, if that evidence would be discoverable under Rule 192,
141	141	Texas Rules of Civil Procedure. During the 35-day period after the
142	142	date the contractor receives the notice, and on the contractor's
143	143	written request, the contractor shall be given a reasonable
144	144	opportunity to inspect and have inspected the property that is the
145	145	subject of the complaint to determine the nature and cause of the
146	146	defect and the nature and extent of repairs necessary to remedy the
147	147	defect. The contractor may take reasonable steps to document the
148	148	defect. [In a claim subject to Subtitle D, Title 16, a contractor
149	149	is entitled to make an offer of repair in accordance with Subsection
150	150	(b). A claimant is not required to give written notice to a
151	151	contractor under this subsection in a claim subject to Subtitle D,
152	152	Title 16.]
153	153	(b) Not [later than the 15th day after the date of a final,
154	154	unappealable determination of a dispute under Subtitle D, Title 16,
155	155	if applicable, or not] later than the 45th day after the date the
156	156	contractor receives the notice [under this section, if Subtitle D,
157	157	Title 16, does not apply], the contractor may make a written offer
158	158	of settlement to the claimant. The offer must be sent to the
159	159	claimant at the claimant's last known address or to the claimant's
160	160	attorney by certified mail, return receipt requested. The offer
161	161	may include either an agreement by the contractor to repair or to
162	162	have repaired by an independent contractor partially or totally at
163	163	the contractor's expense or at a reduced rate to the claimant any
164	164	construction defect described in the notice and shall describe in
165	165	reasonable detail the kind of repairs which will be made. The
166	166	repairs shall be made not later than the 45th day after the date the
167	167	contractor receives written notice of acceptance of the settlement
168	168	offer, unless completion is delayed by the claimant or by other
169	169	events beyond the control of the contractor. If a contractor makes
170	170	a written offer of settlement that the claimant considers to be
171	171	unreasonable:
172	172	(1) on or before the 25th day after the date the
173	173	claimant receives the offer, the claimant shall advise the
174	174	contractor in writing and in reasonable detail of the reasons why
175	175	the claimant considers the offer unreasonable; and
176	176	(2) not later than the 10th day after the date the
177	177	contractor receives notice under Subdivision (1), the contractor
178	178	may make a supplemental written offer of settlement to the claimant
179	179	by sending the offer to the claimant or the claimant's attorney.
180	180	(c) If [compliance with Subtitle D, Title 16, or] the giving
181	181	of the notice under Subsections (a) and (b) within the period
182	182	prescribed by those subsections is impracticable because of the
183	183	necessity of initiating an action at an earlier date to prevent
184	184	expiration of the statute of limitations or if the complaint is
185	185	asserted as a counterclaim, [compliance with Subtitle D, Title 16,
186	186	or] the notice is not required. However, the action or counterclaim
187	187	shall specify in reasonable detail each construction defect that is
188	188	the subject of the complaint. The [If Subtitle D, Title 16, applies
189	189	to the complaint, simultaneously with the filing of an action by a
190	190	claimant, the claimant must submit a request under Section 428.001.
191	191	If Subtitle D, Title 16, does not apply, the] inspection provided
192	192	for by Subsection (a) may be made not later than the 75th day after
193	193	the date of service of the suit, request for arbitration, or
194	194	counterclaim on the contractor, and the offer provided for by
195	195	Subsection (b) may be made [not later than the 15th day after the
196	196	date the state-sponsored inspection and dispute resolution process
197	197	is completed, if Subtitle D, Title 16, applies, or] not later than
198	198	the 60th day after the date of service [, if Subtitle D, Title 16,
199	199	does not apply]. If, while an action subject to this chapter is
200	200	pending, the statute of limitations for the cause of action would
201	201	have expired and it is determined that the provisions of Subsection
202	202	(a) were not properly followed, the action shall be abated to allow
203	203	compliance with Subsections (a) and (b).
204	204	(d) The court or arbitration tribunal shall abate an action
205	205	governed by this chapter if Subsection (c) does not apply and the
206	206	court or tribunal, after a hearing, finds that the contractor is
207	207	entitled to abatement because the claimant failed to [comply with
208	208	the requirements of Subtitle D, Title 16, if applicable, failed to]
209	209	provide the notice or failed to give the contractor a reasonable
210	210	opportunity to inspect the property as required by Subsection (a),
211	211	or failed to follow the procedures specified by Subsection (b). An
212	212	action is automatically abated without the order of the court or
213	213	tribunal beginning on the 11th day after the date a motion to abate
214	214	is filed if the motion:
215	215	(1) is verified and alleges that the person against
216	216	whom the action is pending did not receive the written notice
217	217	required by Subsection (a), the person against whom the action is
218	218	pending was not given a reasonable opportunity to inspect the
219	219	property as required by Subsection (a), or the claimant failed to
220	220	follow the procedures specified by Subsection (b) [or Subtitle D,
221	221	Title 16]; and
222	222	(2) is not controverted by an affidavit filed by the
223	223	claimant before the 11th day after the date on which the motion to
224	224	abate is filed.
225	225	SECTION 8. Section 27.0042(b), Property Code, is amended to
226	226	read as follows:
227	227	(b) A contractor may not elect to purchase the residence
228	228	under Subsection (a) if [:
229	229	[(1)] the residence is more than five years old at the
230	230	time an action is initiated [; or
231	231	[(2) the contractor makes such an election later than
232	232	the 15th day after the date of a final, unappealable determination
233	233	of a dispute under Subtitle D, Title 16, if applicable].
234	234	SECTION 9. Section 41.007(a), Property Code, is amended to
235	235	read as follows:
236	236	(a) A contract for improvements to an existing residence
237	237	described by Section 41.001(b)(3) must contain[:
238	238	[(1) the contractor's certificate of registration
239	239	number from the Texas Residential Construction Commission if the
240	240	contractor is required to register as a builder with the
241	241	commission;
242	242	[(2) the address and telephone number at which the
243	243	owner may file a complaint with the Texas Residential Construction
244	244	Commission about the conduct of the contractor if the contractor is
245	245	required to register as a builder with the commission; and
246	246	[(3)] the following warning conspicuously printed,
247	247	stamped, or typed in a size equal to at least 10-point bold type or
248	248	computer equivalent:
249	249	"IMPORTANT NOTICE: You and your contractor are responsible
250	250	for meeting the terms and conditions of this contract. If you sign
251	251	this contract and you fail to meet the terms and conditions of this
252	252	contract, you may lose your legal ownership rights in your
253	253	home. KNOW YOUR RIGHTS AND DUTIES UNDER THE LAW."
254	254	SECTION 10. (a) The repeal by this Act of Section 5.016,
255	255	Property Code, as added by Section 1, Chapter 843 (H.B. 1038), Acts
256	256	of the 80th Legislature, Regular Session, 2007, applies only to a
257	257	transfer of residential property that occurs on or after the
258	258	effective date of this Act. A transfer of residential property that
259	259	occurs before the effective date of this Act is governed by the law
260	260	in effect immediately before the effective date of this Act, and
261	261	that law is continued in effect for that purpose.
262	262	(b) The repeal by this Act of Sections 420.002 and 420.003,
263	263	Property Code, applies only to a contract for the construction of a
264	264	new home or the improvement of an existing home that is entered into
265	265	on or after the effective date of this Act. A contract for the
266	266	construction of a new home or the improvement of an existing home
267	267	that is entered into before the effective date of this Act is
268	268	governed by the law as it existed immediately before the effective
269	269	date of this Act, and that law is continued in effect for that
270	270	purpose.
271	271	(c) Except as provided by this section, the change in law
272	272	made by this Act to Chapter 27, Property Code, and the repeal by
273	273	this Act of Sections 426.005, 426.007, and 426.008, Property Code,
274	274	apply only to an action commenced on or after the effective date of
275	275	this Act. An action commenced before the effective date of this Act
276	276	or with respect to which a request was filed under Section 428.001,
277	277	Property Code, repealed by this Act, before the effective date of
278	278	this Act, is governed by the law in effect immediately before the
279	279	effective date of this Act, and that law is continued in effect for
280	280	that purpose.
281	281	(d) The change in law made by this Act to Section
282	282	27.003(a)(2), Property Code, applies only to a repair made on or
283	283	after the effective date of this Act. A repair made before the
284	284	effective date of this Act is subject to the law as it existed
285	285	immediately before the effective date of this Act, and that law is
286	286	continued in effect for that purpose.
287	287	(e) The repeal by this Act of Section 428.005, Property
288	288	Code, does not apply to the receipt by a builder of a notice
289	289	described by that section before the effective date of this Act.
290	290	The receipt by a builder of a notice described by that section
291	291	before the effective date of this Act is governed by the law in
292	292	effect immediately before that date, and that law is continued in
293	293	effect for that purpose.
294	294	(f) Except as provided by this section, the repeal by this
295	295	Act of Chapter 430, Property Code, applies only to residential
296	296	construction under a contract entered into on or after the
297	297	effective date of this Act, and the repeal by this Act of Section
298	298	401.005(c), Property Code, applies only to a home or material
299	299	improvement to a home described by Section 401.005(c), Property
300	300	Code, repealed by this Act, the building or remodeling of which
301	301	commences after the effective date of this Act. Residential
302	302	construction under a contract entered into before the effective
303	303	date of this Act or a home or material improvement to a home
304	304	described by Section 401.005(c), Property Code, the building or
305	305	remodeling of which commenced before the effective date of this
306	306	Act, is subject to the warranties and building and performance
307	307	standards applicable to the construction immediately before the
308	308	effective date of this Act.
309	309	(g) The repeal by this Act of Section 436.003, Property
310	310	Code, applies only to an arbitration initiated on or after the
311	311	effective date of this Act. An arbitration initiated before the
312	312	effective date of this Act is governed by the law applicable to the
313	313	arbitration immediately before the effective date of this Act, and
314	314	that law is continued in effect for that purpose.
315	315	(h) The repeal by this Act of Chapter 437, Property Code,
316	316	applies only to an arbitration award filed on or after the effective
317	317	date of this Act. An award filed before the effective date of this
318	318	Act is governed by the law in effect immediately before that date,
319	319	and that law is continued in effect for that purpose.
320	320	(i) The repeal by this Act of Chapter 438, Property Code,
321	321	applies only to an arbitration award issued on or after the
322	322	effective date of this Act. An award issued before the effective
323	323	date of this Act is governed by the law in effect immediately before
324	324	that date, and that law is continued in effect for that purpose.
325	325	SECTION 11. This Act takes effect September 1, 2009.