Texas 2009 - 81st Regular

Texas House Bill HB2243 Compare Versions

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1	1	81R10467 BEF-F
2	2	By: Leibowitz H.B. No. 2243
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the licensing and regulation of residential
8	8	construction contractors and the abolition of the Texas Residential
9	9	Construction Commission; providing a criminal penalty.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	ARTICLE 1. LICENSING AND REGULATION OF GENERAL RESIDENTIAL
12	12	CONTRACTORS
13	13	SECTION 1.01. Subtitle C, Title 7, Occupations Code, is
14	14	amended by adding Chapter 1203 to read as follows:
15	15	CHAPTER 1203. GENERAL RESIDENTIAL CONTRACTORS
16	16	SUBCHAPTER A. GENERAL PROVISIONS
17	17	Sec. 1203.001. DEFINITIONS. In this chapter:
18	18	(1) "Commission" means the Texas Commission of
19	19	Licensing and Regulation.
20	20	(2) "Department" means the Texas Department of
21	21	Licensing and Regulation.
22	22	(3) "General residential contractor" means a person
23	23	who under a license issued under this chapter is engaged in the
24	24	business of residential construction.
25	25	(4) "Residential construction" means the business of
26	26	building, altering, repairing, improving, moving, or demolishing a
27	27	residential structure or an appurtenance on or within the
28	28	structure's residential property lines.
29	29	[Sections 1203.002-1203.050 reserved for expansion]
30	30	SUBCHAPTER B. COMMISSION AND DEPARTMENT POWERS AND DUTIES
31	31	Sec. 1203.051. ADMINISTRATION. The department shall
32	32	administer this chapter.
33	33	Sec. 1203.052. FORMS. The department shall prescribe
34	34	application forms for original and renewal licenses and shall
35	35	design the licenses.
36	36	Sec. 1203.053. CONTRACTS FOR ENFORCEMENT. The department
37	37	may contract with another state agency or a political subdivision
38	38	of the state to enforce this chapter and rules adopted under this
39	39	chapter.
40	40	Sec. 1203.054. DIRECTORY OF LICENSE HOLDERS. (a) The
41	41	department shall publish annually a directory of license holders.
42	42	(b) The department may sell the directory on payment of a
43	43	reasonable fee set by the commission.
44	44	Sec. 1203.055. RULES REGARDING USE AND DISPLAY OF LICENSE.
45	45	The commission shall adopt rules relating to the use, display, and
46	46	advertisement of a license.
47	47	[Sections 1203.056-1203.100 reserved for expansion]
48	48	SUBCHAPTER C. LICENSE REQUIREMENTS
49	49	Sec. 1203.101. LICENSE REQUIRED. A person may not engage in
50	50	the business of residential construction unless the person holds a
51	51	general residential contractor license under this chapter.
52	52	Sec. 1203.102. REQUIREMENTS TO OBTAIN LICENSE. The
53	53	department shall issue a general residential contractor license to
54	54	a person who, at the time of application:
55	55	(1) is at least 21 years of age;
56	56	(2) is a citizen of the United States or a lawfully
57	57	admitted alien;
58	58	(3) provides proof of insurance in the amount required
59	59	by this chapter;
60	60	(4) provides proof satisfactory to the department that
61	61	the person has worked in residential construction for at least
62	62	three years;
63	63	(5) is a resident of this state;
64	64	(6) pays the application fee; and
65	65	(7) passes the applicable licensing examination with a
66	66	score of at least 70 percent.
67	67	Sec. 1203.103. REQUIREMENTS TO RENEW LICENSE. The
68	68	department shall renew a general residential contractor license if
69	69	the applicant:
70	70	(1) holds a general residential contractor license in
71	71	good standing;
72	72	(2) provides proof of insurance in the amount required
73	73	by this chapter; and
74	74	(3) pays the renewal fee.
75	75	Sec. 1203.104. APPLICANT LICENSED IN ANOTHER JURISDICTION.
76	76	The department may waive any requirement to obtain a license under
77	77	this chapter if the department determines that the applicant holds
78	78	a license issued by another jurisdiction that has licensing
79	79	requirements substantially equivalent to those of this state.
80	80	Sec. 1203.105. LICENSED ACTIVITY. (a) A license holder may
81	81	exercise all professional rights, honors, and privileges relating
82	82	to the profession of a general residential contractor.
83	83	(b) A license is the property of the department and must be
84	84	surrendered on demand.
85	85	(c) A license is valid throughout this state.
86	86	(d) A license holder is not required to hold an additional
87	87	license or certificate issued by a political subdivision to operate
88	88	in the political subdivision.
89	89	Sec. 1203.106. LICENSE TERM. A license issued under this
90	90	chapter is valid for one year.
91	91	Sec. 1203.107. INSURANCE REQUIREMENTS. (a) Except as
92	92	provided by Subsection (b), a license holder must maintain a
93	93	general liability insurance policy at all times with a limit of at
94	94	least $500,000.
95	95	(b) A license holder who has built or remodeled 25 or more
96	96	homes during the previous year must maintain a general liability
97	97	insurance policy at all times with a limit of at least $2 million.
98	98	Sec. 1203.108. BOND REQUIREMENTS. (a) A license holder
99	99	shall obtain a surety bond for each home the license holder
100	100	constructs or remodels. The bond must:
101	101	(1) guarantee the license holder's performance under
102	102	the license holder's contract with the prospective homeowner; and
103	103	(2) be issued in an amount not less than the fair
104	104	market value of the completed project if the project had no defects.
105	105	(b) A license holder who has constructed or remodeled 25 or
106	106	more homes in the preceding year shall obtain a surety bond issued
107	107	to the department in an amount equal to the fair market value of all
108	108	homes built by the license holder in the preceding year.
109	109	[Sections 1203.109-1203.150 reserved for expansion]
110	110	SUBCHAPTER D. EXAMINATION
111	111	Sec. 1203.151. EXAMINATION REQUIRED. Each applicant for a
112	112	license under this chapter must take the general residential
113	113	contractor licensing examination.
114	114	Sec. 1203.152. CONTENTS OF EXAMINATION. The examination
115	115	must be comprehensive in nature and require the successful
116	116	applicant to demonstrate an intimate working knowledge of the
117	117	latest version of the International Residential Code applicable to
118	118	all nonelectrical aspects of residential construction.
119	119	Sec. 1203.153. DEVELOPMENT AND ADMINISTRATION OF
120	120	EXAMINATION. (a) The department shall contract with a nationally or
121	121	internationally recognized testing organization to develop the
122	122	examination and administer the examination at least once each
123	123	quarter.
124	124	(b) The examination administered under this section must
125	125	be:
126	126	(1) developed in consultation with experts in
127	127	residential construction; and
128	128	(2) professionally constructed, validated, and
129	129	administered.
130	130	Sec. 1203.154. REEXAMINATION. (a) The department shall
131	131	establish the criteria under which an applicant may retake an
132	132	examination under this chapter.
133	133	(b) The commission shall establish a reasonable examination
134	134	fee for an applicant requesting reexamination under this section.
135	135	[Sections 1203.155-1203.200 reserved for expansion]
136	136	SUBCHAPTER E. PENALTIES AND ENFORCEMENT
137	137	Sec. 1203.201. EMERGENCY SUSPENSION. (a) The department
138	138	shall temporarily suspend the license of a license holder if the
139	139	department determines from the evidence or information presented to
140	140	it that continued practice by the license holder would constitute a
141	141	continuing and imminent threat to the public welfare.
142	142	(b) A license may be suspended under this section without
143	143	notice or hearing on the complaint if:
144	144	(1) action is taken to initiate proceedings for a
145	145	hearing before the State Office of Administrative Hearings
146	146	simultaneously with the temporary suspension; and
147	147	(2) a hearing is held as soon as practicable under this
148	148	chapter and Chapter 2001, Government Code.
149	149	(c) The State Office of Administrative Hearings shall hold a
150	150	preliminary hearing not later than the 14th day after the date of
151	151	the temporary suspension to determine if there is probable cause to
152	152	believe that a continuing and imminent threat to the public welfare
153	153	still exists. A final hearing on the matter shall be held not later
154	154	than the 61st day after the date of the temporary suspension.
155	155	Sec. 1203.202. CEASE AND DESIST ORDERS. The department may
156	156	issue a cease and desist order regarding a violation of this chapter
157	157	or a rule adopted under this chapter.
158	158	Sec. 1203.203. LICENSE SUSPENSION OR REVOCATION. (a) The
159	159	grounds for suspending or revoking a license under this chapter
160	160	include:
161	161	(1) fraud or deceit in obtaining an original or
162	162	renewal license under this chapter;
163	163	(2) misapplication or misappropriation of trust
164	164	funds, including a violation of Chapter 32, Penal Code, or Chapter
165	165	162, Property Code, if found by a final, nonappealable court
166	166	judgment;
167	167	(3) naming false consideration in a contract to sell a
168	168	new home or in a construction contract for a new or remodeled home;
169	169	(4) discriminating on the basis of race, color,
170	170	religion, sex, age, national origin, or disability;
171	171	(5) publishing a false or misleading advertisement;
172	172	(6) failing to honor, within a reasonable time, a
173	173	check issued to the department or commission, or any other
174	174	instrument of payment, including a credit or debit card or
175	175	electronic funds transfer, after the commission or department has
176	176	sent by certified mail to the person's last known business address
177	177	according to department records a request for payment;
178	178	(7) failing to pay a fine, fee, or administrative
179	179	penalty assessed by the department or commission;
180	180	(8) failing to pay a nonappealable court judgment
181	181	arising from a construction defect or other transaction between the
182	182	license holder and the homeowner;
183	183	(9) engaging in statutory or common law fraud or
184	184	misappropriation of funds, if found by a final, nonappealable
185	185	judgment of any arbitrator or court that includes a finding of fraud
186	186	against the license holder and is not satisfied before the 30th day
187	187	after the date of the final judgment or award;
188	188	(10) using or attempting to use a general residential
189	189	contractor license that has expired or been suspended or revoked;
190	190	(11) falsely representing that the person holds a
191	191	license issued under this chapter;
192	192	(12) acting as a general residential contractor by
193	193	using a name other than a name disclosed to the department or
194	194	commission;
195	195	(13) aiding, abetting, or conspiring with a person who
196	196	does not hold a license issued under this chapter to evade the
197	197	provisions of this chapter, if found by a final, nonappealable
198	198	court judgment;
199	199	(14) allowing a license issued under this chapter to
200	200	be used by another person;
201	201	(15) acting as an agent, partner, or associate of a
202	202	person who does not hold a license issued under this chapter with
203	203	the intent to evade the provisions of this chapter or rules adopted
204	204	under this chapter;
205	205	(16) repeatedly failing to respond to a request for
206	206	information from the department or commission;
207	207	(17) failing to obtain a building permit required by a
208	208	political subdivision before constructing a new home or improving
209	209	an existing home;
210	210	(18) abandoning, without justification, any contract
211	211	for new home improvement or construction engaged in or undertaken
212	212	by the license holder, if found to have done so by a final,
213	213	nonappealable court judgment;
214	214	(19) failing to complete a new home or home
215	215	improvement construction project under the contract terms with the
216	216	homeowner or prospective homeowner;
217	217	(20) failing to correct a violation of building codes
218	218	or standards;
219	219	(21) failing to comply with architectural drawings
220	220	specified in a contract to improve, build, or purchase a new home;
221	221	(22) failing to comply with the engineering design of
222	222	a home, including the home's foundation;
223	223	(23) failing to satisfy a court judgment or a judgment
224	224	in binding arbitration;
225	225	(24) failing to honor a contractual warranty;
226	226	(25) failing to disclose in writing:
227	227	(A) the products that are installed in the home;
228	228	(B) care and component warranties;
229	229	(C) building standards; and
230	230	(D) the risks and hazards of the home; and
231	231	(26) otherwise violating this chapter or a rule
232	232	adopted under this chapter.
233	233	(b) A person whose license is revoked as a result of conduct
234	234	described by Subsection (a)(9) is not eligible to hold a license
235	235	under this chapter until the 10th anniversary of the date of
236	236	revocation.
237	237	Sec. 1203.204. OFFENSE; CRIMINAL PENALTY. (a) A person
238	238	commits an offense if the person knowingly or intentionally
239	239	violates Section 1203.101.
240	240	(b) An offense under this section is a Class A misdemeanor.
241	241	SECTION 1.02. Not later than March 1, 2010, the Texas
242	242	Commission of Licensing and Regulation shall adopt any rules
243	243	necessary to administer Chapter 1203, Occupations Code, as added by
244	244	this article.
245	245	SECTION 1.03. (a) The Texas Department of Licensing and
246	246	Regulation shall ensure that the first general residential
247	247	contractor licensing examination is administered on June 30, 2010.
248	248	(b) The Texas Department of Licensing and Regulation shall
249	249	begin issuing licenses under Chapter 1203, Occupations Code, as
250	250	added by this article, on September 1, 2010.
251	251	SECTION 1.04. (a) Except as provided by Subsection (b) of
252	252	this section, this article takes effect September 1, 2009.
253	253	(b) Section 1203.101 and Subchapter E, Chapter 1203,
254	254	Occupations Code, as added by this article, take effect January 1,
255	255	2011.
256	256	ARTICLE 2. ABOLITION OF TEXAS RESIDENTIAL CONSTRUCTION COMMISSION
257	257	SECTION 2.01. (a) The Texas Residential Construction
258	258	Commission is abolished effective September 1, 2009.
259	259	(b) The following statutes are repealed:
260	260	(1) Section 214.906, Local Government Code;
261	261	(2) Title 16, Property Code;
262	262	(3) Section 5.016, Property Code, as added by Section
263	263	1, Chapter 843 (H.B. 1038), Acts of the 80th Legislature, Regular
264	264	Session, 2007; and
265	265	(4) Sections 27.001(3) and (9), 27.004(l), and
266	266	27.007(c), Property Code.
267	267	SECTION 2.02. (a) The Texas Department of Licensing and
268	268	Regulation shall take custody of the property, records, or other
269	269	assets of the Texas Residential Construction Commission unless the
270	270	governor designates another appropriate governmental entity to
271	271	take custody of the property, records, or other assets.
272	272	(b) If the Texas Residential Construction Commission has a
273	273	continuing valid and enforceable obligation, including bonded
274	274	indebtedness, Section 325.017(f), Government Code, applies in
275	275	relation to the continuing obligation of the commission.
276	276	SECTION 2.03. Sections 59.011(a) and (c), Finance Code, are
277	277	amended to read as follows:
278	278	(a) For purposes of Chapter 27, Property Code, [and Title
279	279	16, Property Code,] a federally insured financial institution
280	280	regulated under this code is not a builder.
281	281	(c) A builder hired by a lender to complete the construction
282	282	of a foreclosed home is not liable for any construction defects of
283	283	which the builder had no knowledge that existed prior to the
284	284	acquisition of the home by the lender, but the builder is subject to
285	285	Chapter 27, Property Code, [and Title 16, Property Code,] for work
286	286	performed for the lender subsequent to the acquisition of the home
287	287	by the lender.
288	288	SECTION 2.04. Sections 27.001(4), (5), and (8), Property
289	289	Code, are amended to read as follows:
290	290	(4) "Construction defect" [has the meaning assigned by
291	291	Section 401.004 for an action to which Subtitle D, Title 16, applies
292	292	and for any other action] means a matter concerning the design,
293	293	construction, or repair of a new residence, of an alteration of or
294	294	repair or addition to an existing residence, or of an appurtenance
295	295	to a residence, on which a person has a complaint against a
296	296	contractor. The term may include any physical damage to the
297	297	residence, any appurtenance, or the real property on which the
298	298	residence and appurtenance are affixed proximately caused by a
299	299	construction defect.
300	300	(5) "Contractor":
301	301	(A) means:
302	302	(i) a person [builder, as defined by
303	303	Section 401.003,] contracting with an owner for the construction or
304	304	repair of a new residence, for the repair or alteration of or an
305	305	addition to an existing residence, or for the construction, sale,
306	306	alteration, addition, or repair of an appurtenance to a new or
307	307	existing residence;
308	308	(ii) any person contracting with a
309	309	purchaser for the sale of a new residence constructed by or on
310	310	behalf of that person; or
311	311	(iii) a person contracting with an owner or
312	312	the developer of a condominium for the construction of a new
313	313	residence, for an alteration of or an addition to an existing
314	314	residence, for repair of a new or existing residence, or for the
315	315	construction, sale, alteration, addition, or repair of an
316	316	appurtenance to a new or existing residence; and
317	317	(B) includes:
318	318	(i) an owner, officer, director,
319	319	shareholder, partner, or employee of the contractor; and
320	320	(ii) a risk retention group registered
321	321	under Chapter 2201 [Article 21.54], Insurance Code, that insures
322	322	all or any part of a contractor's liability for the cost to repair a
323	323	residential construction defect.
324	324	(8) "Structural failure" [has the meaning assigned by
325	325	Section 401.002 for an action to which Subtitle D, Title 16, applies
326	326	and for any other action] means actual physical damage to the
327	327	load-bearing portion of a residence caused by a failure of the
328	328	load-bearing portion.
329	329	SECTION 2.05. Section 27.002(b), Property Code, is amended
330	330	to read as follows:
331	331	(b) To [Except as provided by this subsection, to] the
332	332	extent of conflict between this chapter and any other law,
333	333	including the Deceptive Trade Practices-Consumer Protection Act
334	334	(Subchapter E, Chapter 17, Business & Commerce Code) or a common law
335	335	cause of action, this chapter prevails. [To the extent of conflict
336	336	between this chapter and Title 16, Title 16 prevails.]
337	337	SECTION 2.06. Section 27.003(a), Property Code, is amended
338	338	to read as follows:
339	339	(a) In an action to recover damages or other relief arising
340	340	from a construction defect:
341	341	(1) a contractor is not liable for any percentage of
342	342	damages caused by:
343	343	(A) negligence of a person other than the
344	344	contractor or an agent, employee, or subcontractor of the
345	345	contractor;
346	346	(B) failure of a person other than the contractor
347	347	or an agent, employee, or subcontractor of the contractor to:
348	348	(i) take reasonable action to mitigate the
349	349	damages; or
350	350	(ii) take reasonable action to maintain the
351	351	residence;
352	352	(C) normal wear, tear, or deterioration;
353	353	(D) normal shrinkage due to drying or settlement
354	354	of construction components within the tolerance of building
355	355	standards; or
356	356	(E) the contractor's reliance on written
357	357	information relating to the residence, appurtenance, or real
358	358	property on which the residence and appurtenance are affixed that
359	359	was obtained from official government records, if the written
360	360	information was false or inaccurate and the contractor did not know
361	361	and could not reasonably have known of the falsity or inaccuracy of
362	362	the information; and
363	363	(2) if an assignee of the claimant or a person
364	364	subrogated to the rights of a claimant fails to provide the
365	365	contractor with the written notice and opportunity to inspect and
366	366	offer to repair required by Section 27.004 [or fails to request
367	367	state-sponsored inspection and dispute resolution under Chapter
368	368	428, if applicable,] before performing repairs, the contractor is
369	369	not liable for the cost of any repairs or any percentage of damages
370	370	caused by repairs made to a construction defect at the request of an
371	371	assignee of the claimant or a person subrogated to the rights of a
372	372	claimant by a person other than the contractor or an agent,
373	373	employee, or subcontractor of the contractor.
374	374	SECTION 2.07. Sections 27.004(a), (b), (c), and (d),
375	375	Property Code, are amended to read as follows:
376	376	(a) Before [In a claim not subject to Subtitle D, Title 16,
377	377	before] the 60th day preceding the date a claimant seeking from a
378	378	contractor damages or other relief arising from a construction
379	379	defect initiates an action, the claimant shall give written notice
380	380	by certified mail, return receipt requested, to the contractor, at
381	381	the contractor's last known address, specifying in reasonable
382	382	detail the construction defects that are the subject of the
383	383	complaint. On the request of the contractor, the claimant shall
384	384	provide to the contractor any evidence that depicts the nature and
385	385	cause of the defect and the nature and extent of repairs necessary
386	386	to remedy the defect, including expert reports, photographs, and
387	387	videotapes, if that evidence would be discoverable under Rule 192,
388	388	Texas Rules of Civil Procedure. During the 35-day period after the
389	389	date the contractor receives the notice, and on the contractor's
390	390	written request, the contractor shall be given a reasonable
391	391	opportunity to inspect and have inspected the property that is the
392	392	subject of the complaint to determine the nature and cause of the
393	393	defect and the nature and extent of repairs necessary to remedy the
394	394	defect. The contractor may take reasonable steps to document the
395	395	defect. [In a claim subject to Subtitle D, Title 16, a contractor
396	396	is entitled to make an offer of repair in accordance with Subsection
397	397	(b). A claimant is not required to give written notice to a
398	398	contractor under this subsection in a claim subject to Subtitle D,
399	399	Title 16.]
400	400	(b) Not [later than the 15th day after the date of a final,
401	401	unappealable determination of a dispute under Subtitle D, Title 16,
402	402	if applicable, or not] later than the 45th day after the date the
403	403	contractor receives the notice [under this section, if Subtitle D,
404	404	Title 16, does not apply], the contractor may make a written offer
405	405	of settlement to the claimant. The offer must be sent to the
406	406	claimant at the claimant's last known address or to the claimant's
407	407	attorney by certified mail, return receipt requested. The offer
408	408	may include either an agreement by the contractor to repair or to
409	409	have repaired by an independent contractor partially or totally at
410	410	the contractor's expense or at a reduced rate to the claimant any
411	411	construction defect described in the notice and shall describe in
412	412	reasonable detail the kind of repairs which will be made. The
413	413	repairs shall be made not later than the 45th day after the date the
414	414	contractor receives written notice of acceptance of the settlement
415	415	offer, unless completion is delayed by the claimant or by other
416	416	events beyond the control of the contractor. If a contractor makes
417	417	a written offer of settlement that the claimant considers to be
418	418	unreasonable:
419	419	(1) on or before the 25th day after the date the
420	420	claimant receives the offer, the claimant shall advise the
421	421	contractor in writing and in reasonable detail of the reasons why
422	422	the claimant considers the offer unreasonable; and
423	423	(2) not later than the 10th day after the date the
424	424	contractor receives notice under Subdivision (1), the contractor
425	425	may make a supplemental written offer of settlement to the claimant
426	426	by sending the offer to the claimant or the claimant's attorney.
427	427	(c) If [compliance with Subtitle D, Title 16, or] the giving
428	428	of the notice under Subsections (a) and (b) within the period
429	429	prescribed by those subsections is impracticable because of the
430	430	necessity of initiating an action at an earlier date to prevent
431	431	expiration of the statute of limitations or if the complaint is
432	432	asserted as a counterclaim, [compliance with Subtitle D, Title 16,
433	433	or] the notice is not required. However, the action or counterclaim
434	434	shall specify in reasonable detail each construction defect that is
435	435	the subject of the complaint. The [If Subtitle D, Title 16, applies
436	436	to the complaint, simultaneously with the filing of an action by a
437	437	claimant, the claimant must submit a request under Section 428.001.
438	438	If Subtitle D, Title 16, does not apply, the] inspection provided
439	439	for by Subsection (a) may be made not later than the 75th day after
440	440	the date of service of the suit, request for arbitration, or
441	441	counterclaim on the contractor, and the offer provided for by
442	442	Subsection (b) may be made [not later than the 15th day after the
443	443	date the state-sponsored inspection and dispute resolution process
444	444	is completed, if Subtitle D, Title 16, applies, or] not later than
445	445	the 60th day after the date of service [, if Subtitle D, Title 16,
446	446	does not apply]. If, while an action subject to this chapter is
447	447	pending, the statute of limitations for the cause of action would
448	448	have expired and it is determined that the provisions of Subsection
449	449	(a) were not properly followed, the action shall be abated to allow
450	450	compliance with Subsections (a) and (b).
451	451	(d) The court or arbitration tribunal shall abate an action
452	452	governed by this chapter if Subsection (c) does not apply and the
453	453	court or tribunal, after a hearing, finds that the contractor is
454	454	entitled to abatement because the claimant failed to [comply with
455	455	the requirements of Subtitle D, Title 16, if applicable, failed to]
456	456	provide the notice or failed to give the contractor a reasonable
457	457	opportunity to inspect the property as required by Subsection (a),
458	458	or failed to follow the procedures specified by Subsection (b). An
459	459	action is automatically abated without the order of the court or
460	460	tribunal beginning on the 11th day after the date a motion to abate
461	461	is filed if the motion:
462	462	(1) is verified and alleges that the person against
463	463	whom the action is pending did not receive the written notice
464	464	required by Subsection (a), the person against whom the action is
465	465	pending was not given a reasonable opportunity to inspect the
466	466	property as required by Subsection (a), or the claimant failed to
467	467	follow the procedures specified by Subsection (b) [or Subtitle D,
468	468	Title 16]; and
469	469	(2) is not controverted by an affidavit filed by the
470	470	claimant before the 11th day after the date on which the motion to
471	471	abate is filed.
472	472	SECTION 2.08. Section 27.0042(b), Property Code, is amended
473	473	to read as follows:
474	474	(b) A contractor may not elect to purchase the residence
475	475	under Subsection (a) if [:
476	476	[(1)] the residence is more than five years old at the
477	477	time an action is initiated [; or
478	478	[(2) the contractor makes such an election later than
479	479	the 15th day after the date of a final, unappealable determination
480	480	of a dispute under Subtitle D, Title 16, if applicable].
481	481	SECTION 2.09. Section 41.007(a), Property Code, is amended
482	482	to read as follows:
483	483	(a) A contract for improvements to an existing residence
484	484	described by Section 41.001(b)(3) must contain[:
485	485	[(1) the contractor's certificate of registration
486	486	number from the Texas Residential Construction Commission if the
487	487	contractor is required to register as a builder with the
488	488	commission;
489	489	[(2) the address and telephone number at which the
490	490	owner may file a complaint with the Texas Residential Construction
491	491	Commission about the conduct of the contractor if the contractor is
492	492	required to register as a builder with the commission; and
493	493	[(3)] the following warning conspicuously printed,
494	494	stamped, or typed in a size equal to at least 10-point bold type or
495	495	computer equivalent:
496	496	"IMPORTANT NOTICE: You and your contractor are responsible
497	497	for meeting the terms and conditions of this contract. If you sign
498	498	this contract and you fail to meet the terms and conditions of this
499	499	contract, you may lose your legal ownership rights in your
500	500	home. KNOW YOUR RIGHTS AND DUTIES UNDER THE LAW."
501	501	SECTION 2.10. (a) The repeal by this Act of Section 5.016,
502	502	Property Code, as added by Section 1, Chapter 843 (H.B. 1038), Acts
503	503	of the 80th Legislature, Regular Session, 2007, applies only to a
504	504	transfer of residential property that occurs on or after the
505	505	effective date of this Act. A transfer of residential property that
506	506	occurs before the effective date of this Act is governed by the law
507	507	in effect immediately before the effective date of this Act, and
508	508	that law is continued in effect for that purpose.
509	509	(b) The repeal by this Act of Section 401.005(c), Property
510	510	Code, applies only to a home or material improvement to a home
511	511	described by Section 401.005(c), Property Code, repealed by this
512	512	Act, the building or remodeling of which commences on or after the
513	513	effective date of this Act. A home or material improvement to a
514	514	home described by Section 401.005(c), Property Code, repealed by
515	515	this Act, the building or remodeling of which is commenced before
516	516	the effective date of this Act is subject to the warranty obligation
517	517	applicable to the home or material improvement to the home
518	518	immediately before the effective date of this Act.
519	519	(c) The repeal by this Act of Sections 420.002 and 420.003,
520	520	Property Code, applies only to a contract for the construction of a
521	521	new home or the improvement of an existing home that is entered into
522	522	on or after the effective date of this Act. A contract for the
523	523	construction of a new home or the improvement of an existing home
524	524	that is entered into before the effective date of this Act is
525	525	governed by the law as it existed immediately before the effective
526	526	date of this Act, and that law is continued in effect for that
527	527	purpose.
528	528	(d) Except as provided by this section, the change in law
529	529	made by this Act to Chapter 27, Property Code, and the repeal by
530	530	this Act of Sections 426.005, 426.007, and 426.008, Property Code,
531	531	apply only to an action commenced on or after the effective date of
532	532	this Act. An action commenced before the effective date of this Act
533	533	or with respect to which a request was filed under Section 428.001,
534	534	Property Code, repealed by this Act, before the effective date of
535	535	this Act, is governed by the law in effect immediately before the
536	536	effective date of this Act, and that law is continued in effect for
537	537	that purpose.
538	538	(e) The change in law made by this Act to Section
539	539	27.003(a)(2), Property Code, applies only to a repair made on or
540	540	after the effective date of this Act. A repair made before the
541	541	effective date of this Act is subject to the law as it existed
542	542	immediately before the effective date of this Act, and that law is
543	543	continued in effect for that purpose.
544	544	(f) The repeal by this Act of Section 428.005, Property
545	545	Code, does not apply to the receipt by a builder of a notice
546	546	described by that section before the effective date of this Act.
547	547	The receipt by a builder of a notice described by that section
548	548	before the effective date of this Act is governed by the law in
549	549	effect immediately before that date, and that law is continued in
550	550	effect for that purpose.
551	551	(g) The repeal by this Act of Chapter 430, Property Code,
552	552	applies only to residential construction commenced on or after the
553	553	effective date of this Act. Residential construction commenced
554	554	before the effective date of this Act or residential construction
555	555	commenced after the effective date of this Act under a contract
556	556	entered into before the effective date of this Act is subject to the
557	557	warranties and building and performance standards applicable to
558	558	residential construction immediately before the effective date of
559	559	this Act.
560	560	(h) The repeal by this Act of Section 436.003, Property
561	561	Code, applies only to an arbitration initiated on or after the
562	562	effective date of this Act. An arbitration initiated before the
563	563	effective date of this Act is governed by the law applicable to the
564	564	arbitration immediately before the effective date of this Act, and
565	565	that law is continued in effect for that purpose.
566	566	(i) The repeal by this Act of Chapter 437, Property Code,
567	567	applies only to an arbitration award filed on or after the effective
568	568	date of this Act. An award filed before the effective date of this
569	569	Act is governed by the law in effect immediately before that date,
570	570	and that law is continued in effect for that purpose.
571	571	(j) The repeal by this Act of Chapter 438, Property Code,
572	572	applies only to an arbitration award issued on or after the
573	573	effective date of this Act. An award issued before the effective
574	574	date of this Act is governed by the law in effect immediately before
575	575	that date, and that law is continued in effect for that purpose.
576	576	SECTION 2.11. This article takes effect September 1, 2009.
577	577	ARTICLE 3. EFFECTIVE DATE
578	578	SECTION 3.01. This Act takes effect September 1, 2009.