By: McClendon, Isett, Flynn, Deshotel, H.B. No. 2295
Harper-Brown, et al.
A BILL TO BE ENTITLED
AN ACT
relating to the continuation and functions of the Texas Residential
Construction Commission; providing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 27, Property Code, is amended by adding
Section 27.0021 to read as follows:
Sec. 27.0021. TIME FOR CERTAIN OFFERS AND ELECTIONS BY
BUILDER. In a dispute subject to Subtitle D, Title 16, if a party to
the dispute is authorized to file an action described by Section
426.005(a) before a recommendation is issued by a third-party
inspector, before a ruling on an appeal of a third-party
inspector's report, or before the expiration of the mediation
period under Section 428A.004, a builder may make a written offer of
settlement to the claimant under Sections 27.004(b) and (c) or an
election to purchase the residence under Section 27.0042 not later
than the 15th day after the earliest date on which the action may be
filed under Section 426.005(g) or 428A.004(b).
SECTION 2. Section 27.003(a), Property Code, is amended to
read as follows:
(a) In an action to recover damages or other relief arising
from a construction defect:
(1) a contractor is not liable for any percentage of
damages caused by:
(A) negligence of a person other than the
contractor or an agent, employee, or subcontractor of the
contractor;
(B) failure of a person other than the contractor
or an agent, employee, or subcontractor of the contractor to:
(i) take reasonable action to mitigate the
damages; or
(ii) take reasonable action to maintain the
residence;
(C) normal wear, tear, or deterioration;
(D) normal shrinkage due to drying or settlement
of construction components within the tolerance of building
standards; or
(E) the contractor's reliance on written
information relating to the residence, appurtenance, or real
property on which the residence and appurtenance are affixed that
was obtained from official government records, if the written
information was false or inaccurate and the contractor did not know
and could not reasonably have known of the falsity or inaccuracy of
the information; and
(2) if an assignee of the claimant or a person
subrogated to the rights of a claimant fails to provide the
contractor with the written notice and opportunity to inspect and
offer to repair required by Section 27.004 or fails to request an
[state-sponsored] inspection [and dispute resolution] under
Chapter 428, if applicable, before performing repairs, the
contractor is not liable for the cost of any repairs or any
percentage of damages caused by repairs made to a construction
defect at the request of an assignee of the claimant or a person
subrogated to the rights of a claimant by a person other than the
contractor or an agent, employee, or subcontractor of the
contractor.
SECTION 3. Sections 27.004(b), (c), (d), and (l), Property
Code, are amended to read as follows:
(b) Not later than the 15th day after the date of a final,
unappealable determination of a dispute under Subtitle D, Title 16,
if applicable, or not later than the 45th day after the date the
contractor receives the notice under this section, if Subtitle D,
Title 16, does not apply, the contractor may make a written offer of
settlement to the claimant. The offer must be sent to the claimant
at the claimant's last known address or to the claimant's attorney
by certified mail, return receipt requested. The offer may include
either an agreement by the contractor to repair or to have repaired
by an independent contractor partially or totally at the
contractor's expense or at a reduced rate to the claimant any
construction defect described in the notice and shall describe in
reasonable detail the kind of repairs which will be made. The
repairs shall be made not later than the 45th day after the date the
contractor receives written notice of acceptance of the settlement
offer, unless completion is delayed by the claimant or by other
events beyond the control of the contractor. [If a contractor makes
a written offer of settlement that the claimant considers to be
unreasonable:
[(1) on or before the 25th day after the date the
claimant receives the offer, the claimant shall advise the
contractor in writing and in reasonable detail of the reasons why
the claimant considers the offer unreasonable; and
[(2) not later than the 10th day after the date the
contractor receives notice under Subdivision (1), the contractor
may make a supplemental written offer of settlement to the claimant
by sending the offer to the claimant or the claimant's attorney.]
(c) If compliance with Subtitle D, Title 16, or the giving
of the notice under Subsections (a) and (b) within the period
prescribed by those subsections is impracticable because of the
necessity of initiating an action at an earlier date to prevent
expiration of the statute of limitations or if the complaint is
asserted as a counterclaim, compliance with Subtitle D, Title 16,
or the notice is not required. However, the action or counterclaim
shall specify in reasonable detail each construction defect that is
the subject of the complaint. If Subtitle D, Title 16, applies to
the complaint, simultaneously with the filing of an action by a
claimant, the claimant must submit a request under Section 428.001.
If Subtitle D, Title 16, does not apply, the inspection provided for
by Subsection (a) may be made not later than the 75th day after the
date of service of the suit, request for arbitration, or
counterclaim on the contractor, and the offer provided for by
Subsection (b) may be made not later than the 15th day after the
date the [state-sponsored] inspection [and dispute resolution]
process under Chapter 428 is completed, if Subtitle D, Title 16,
applies, or not later than the 60th day after the date of service,
if Subtitle D, Title 16, does not apply. If, while an action
subject to this chapter is pending, the statute of limitations for
the cause of action would have expired and it is determined that the
provisions of Subsection (a) were not properly followed, the action
shall be abated to allow compliance with Subsections (a) and (b).
(d) The court or arbitration tribunal shall abate an action
governed by this chapter if Subsection (c) does not apply and the
court or tribunal, after a hearing, finds that the contractor is
entitled to abatement because the claimant failed to comply with
the requirements of Subtitle D, Title 16, if applicable or [,]
failed to provide the notice or failed to give the contractor a
reasonable opportunity to inspect the property as required by
Subsection (a)[, or failed to follow the procedures specified by
Subsection (b)]. An action is automatically abated without the
order of the court or tribunal beginning on the 11th day after the
date a motion to abate is filed if the motion:
(1) is verified and alleges that the person against
whom the action is pending did not receive the written notice
required by Subsection (a), the person against whom the action is
pending was not given a reasonable opportunity to inspect the
property as required by Subsection (a), or the claimant failed to
follow the procedures specified by [Subsection (b) or] Subtitle D,
Title 16; and
(2) is not controverted by an affidavit filed by the
claimant before the 11th day after the date on which the motion to
abate is filed.
(l) If Subtitle D, Title 16, applies to the claim and the
contractor's offer of repair is accepted by the claimant, the
contractor, on completion of the repairs and in accordance with
Section 428.0041 [at the contractor's expense], shall engage the
third-party inspector who provided the recommendation regarding
the construction defect involved in the claim to inspect the
repairs and determine whether the residence, as repaired, complies
with the applicable limited statutory warranty and building and
performance standards adopted by the commission. [The contractor
is entitled to a reasonable period not to exceed 15 days to address
minor cosmetic items that are necessary to fully complete the
repairs.] The determination of the third-party inspector of
whether the repairs comply with the applicable limited statutory
warranty and building and performance standards adopted by the
commission establishes a rebuttable presumption on that issue. A
party seeking to dispute, vacate, or overcome that presumption must
establish by clear and convincing evidence that the determination
is inconsistent with the applicable limited statutory warranty and
building and performance standards.
SECTION 4. Section 41.007(a), Property Code, is amended to
read as follows:
(a) A contract for improvements to an existing residence
described by Section 41.001(b)(3) must contain:
(1) the contractor's license [certificate of
registration] number from the Texas Residential Construction
Commission if the contractor is required to be licensed [register]
as a builder by [with] the commission;
(2) the address and telephone number at which the
owner may file a complaint with the Texas Residential Construction
Commission about the conduct of the contractor if the contractor is
required to be licensed [register] as a builder by [with] the
commission; and
(3) the following warning conspicuously printed,
stamped, or typed in a size equal to at least 10-point bold type or
computer equivalent:
"IMPORTANT NOTICE: You and your contractor are responsible
for meeting the terms and conditions of this contract. If you sign
this contract and you fail to meet the terms and conditions of this
contract, you may lose your legal ownership rights in your
home. KNOW YOUR RIGHTS AND DUTIES UNDER THE LAW."
SECTION 5. Chapter 401, Property Code, is amended by adding
Section 401.0011 to read as follows:
Sec. 401.0011. PURPOSE; TEXAS RESIDENTIAL CONSTRUCTION
COMMISSION. (a) The Texas Residential Construction Commission
oversees persons required to be licensed by the commission to
ensure that those persons are responsible and accountable to the
homeowners with whom they contract.
(b) The commission's mission includes:
(1) educating builders and homeowners about all
aspects of the residential construction industry affecting the
building or remodeling of homes; and
(2) facilitating resolution of disputes between
builders and homeowners regarding construction defects through the
state inspection program and through a voluntary mediation program.
SECTION 6. Section 401.002, Property Code, is amended by
amending Subdivisions (3) and (4) and adding Subdivision (11-a) to
read as follows:
(3) "Approved architect" means an architect licensed
by this state and approved by the commission to provide services to
the commission in connection with the state [state-sponsored]
inspection program [and dispute resolution process].
(4) "Approved structural engineer" means a licensed
professional engineer approved by the commission to provide
services to the commission in connection with the state
[state-sponsored] inspection program [and dispute resolution
process].
(11-a) "State inspection program" means the program
administered by the commission under Subtitle D under which homes
are inspected to determine whether alleged construction defects
exist and inspectors issue determinations and recommendations
regarding the alleged defects.
SECTION 7. Section 401.003, Property Code, is amended by
amending Subsections (c) and (d) and adding Subsection (e) to read
as follows:
(c) The term does not include a [any] person who:
(1) has been issued a license by this state or an
agency of this state to practice a trade or profession related to or
affiliated with residential construction if the work being done by
the entity or individual to the home is solely for the purpose for
which the license was issued; [or]
(2) sells a new home and:
(A) does not construct or supervise or manage the
construction of the home; and
(B) holds a license issued under Chapter 1101,
Occupations Code, or is exempt from that chapter under Section
1101.005, Occupations Code;
(3) guarantees or co-makes a construction loan and is
not otherwise a builder under Subsection (a); or
(4) constructs or makes improvements to not more than
one home in a 12-month period.
(d) The term does not include a nonprofit business entity
that is exempt from taxation under Section 501(c)(3), Internal
Revenue Code, if:
(1) the construction or supervision or management of
the construction of the home, material improvement, or improvement
sold by the nonprofit business entity is performed by a builder
licensed [registered] under this title;
(2) the builder contractually agrees to comply with
the provisions of this title;
(3) the builder is contractually liable to the
homeowner for the warranties and building and performance standards
of this title; and
(4) the nonprofit business entity does not participate
directly in the construction of the home, material improvement, or
improvement.
(e) The term does not include a federally insured financial
institution or a subsidiary or affiliate of the institution.
SECTION 8. Section 401.005, Property Code, is amended by
amending Subsection (c) and adding Subsection (d) to read as
follows:
(c) Except as provided by Subsection (d), a person [An
individual] who builds a home, [or] a material improvement to a
home, or an improvement to the interior of an existing home when the
cost of the work exceeds $10,000 and sells the home immediately
following completion of the building or remodeling and does not
live in the home for at least one year following completion of the
building or remodeling, is responsible as a builder under the
warranty obligation created by this title for work completed by the
person [individual]. Responsibility under this subsection
requires a person [does not automatically require an individual] to
obtain a license [register] under Section 416.001.
(d) Notwithstanding Subsection (c), this title does not
apply to an individual who:
(1) improves the individual's homestead by improving
the interior of an existing home that is the individual's primary
residence when the cost of the work exceeds $10,000; and
(2) sells the home and does not live in the home for at
least one year following the completion of the improvement.
SECTION 9. Section 401.006, Property Code, is amended to
read as follows:
Sec. 401.006. SUNSET PROVISION. (a) The Texas Residential
Construction Commission is subject to Chapter 325, Government Code
(Texas Sunset Act). Unless continued in existence as provided by
that chapter, the commission is abolished and this title expires
September 1, 2015 [2009].
(b) The Sunset Advisory Commission shall conduct a
special-purpose review of the Texas Residential Construction
Commission as part of the Sunset Advisory Commission's review of
agencies for the 83rd Legislature. The Sunset Advisory
Commission's report to the 83rd Legislature regarding the review
must include an assessment of the Texas Residential Construction
Commission's compliance with the mandates and requirements
contained in legislation passed by the 81st and 82nd Legislatures
and the agency's management practices and enforcement efforts to
implement those changes to the statutes governing the agency
enacted by those legislatures. This subsection expires September 1,
2013.
SECTION 10. Sections 401.007(a), (b), and (c), Property
Code, are amended to read as follows:
(a) The [If the] commission [has reasonable cause to believe
that a person is violating a statute to which this chapter applies,
the commission, in addition to any other authorized action,] may
issue an emergency order, including an emergency order to cease and
desist, to any person regardless of whether the person is a builder
licensed under this title [from the violation or an order to take
affirmative action, or both], to enforce a statute to which this
chapter applies if the commission determines that an emergency
exists requiring immediate action to protect the public health and
safety or if the commission has reasonable cause to believe that a
person is violating a statute to which this chapter applies. The
commission may issue the emergency order without notice and hearing
or with any notice and hearing the commission considers practicable
under the circumstances [compliance]. A person may appeal the
order directly to district court in accordance with Chapter 2001,
Government Code.
(b) The [Before issuing an order under this section, the]
commission shall set the time and place and give notice for a
hearing to affirm, modify, or set aside an emergency order that was
issued without a hearing [of a hearing before a hearings officer].
The hearing is governed by Chapter 2001, Government Code. Based on
the findings of fact, conclusions of law, and recommendations of
the hearings officer, the commission by order may find whether a
violation has occurred.
(c) The commission, after providing notice and an
opportunity to appear for a hearing, may impose against a person who
violates an emergency [a cease and desist] order an administrative
penalty in an amount not to exceed $1,000 for each day of violation.
In addition to any other remedy provided by law, the attorney
general or the commission may institute in district court a suit for
injunctive relief and to collect an administrative penalty. A bond
is not required of the commission with respect to injunctive relief
granted under this section. In the action, the court may enter as
proper an order awarding a preliminary or final injunction.
SECTION 11. Chapter 401, Property Code, is amended by
adding Sections 401.008 and 401.009 to read as follows:
Sec. 401.008. REFERENCES TO REGISTRATION. Unless the
context clearly indicates otherwise, a reference in this title to a
registered builder means a licensed builder. A reference in this
title to a certificate of registration held by a builder under this
title means a license.
Sec. 401.009. VENUE FOR ARBITRATION. (a) An arbitration of
a dispute involving a construction defect shall be conducted in the
county in which the home alleged to contain the defect is located.
(b) The requirements of this section may not be waived by
contract.
SECTION 12. Sections 406.001(a) and (c), Property Code, are
amended to read as follows:
(a) The Texas Residential Construction Commission consists
of 11 [nine] members appointed by the governor with the advice and
consent of the senate as follows:
(1) four members must be builders who each hold a
license [certificate of registration] under Chapter 416;
(2) four [three] members must be representatives of
the general public;
(3) one member must be a licensed professional
engineer who practices in the area of residential construction;
[and]
(4) one member must be [either] a licensed architect
who practices in the area of residential construction; and
(5) one member must be [or] a building inspector who
meets the requirements set forth in Chapter 427 and practices in the
area of residential construction.
(c) A person may not be a public member of the commission if
the person or the person's spouse:
(1) is a builder licensed by [registered with] the
commission, or is otherwise registered, certified, or licensed by a
regulatory agency in the field of residential construction;
(2) is employed by or participates in the management
of a business entity or other organization regulated by or
receiving money from the commission;
(3) owns or controls, directly or indirectly, more
than a 10 percent interest in a business entity or other
organization regulated by or receiving money from the commission;
or
(4) uses or receives a substantial amount of tangible
goods, services, or money from the commission other than
compensation or reimbursement authorized by law for commission
membership, attendance, or expenses.
SECTION 13. Section 406.002(a), Property Code, is amended
to read as follows:
(a) Commission members serve staggered six-year terms, with
three or four members' terms expiring February 1 of each
odd-numbered year. The terms of three of the builder
representatives must expire in different odd-numbered years. The
terms [term] of three [one] of the representatives of the general
public must expire in different [each] odd-numbered years [year].
SECTION 14. Section 408.001, Property Code, is amended to
read as follows:
Sec. 408.001. RULES. The commission shall adopt rules as
necessary for the implementation of this title, including rules:
(1) governing the state [state-sponsored] inspection
program [and dispute resolution process], including building and
performance standards, administrative regulations, and the conduct
of hearings under Subtitle D;
(2) establishing limited statutory warranty and
building and performance standards for residential construction;
(3) approving third-party warranty companies; and
(4) approving third-party inspectors.
SECTION 15. Sections 408.002(c) and (d), Property Code, are
amended to read as follows:
(c) The commission may charge a reasonable fee for:
(1) [a homeowner to submit a request for
state-sponsored inspection under Subtitle D;
[(2)] providing public information requested under
Chapter 552, Government Code, excluding information requested from
the commission under Section 409.001; or
(2) [(3)] producing, mailing, and distributing
special printed materials and publications generated in bulk by the
commission for use and distribution by builders.
(d) The commission may not charge [waive or reduce the fee
for an inspection under Subtitle D for] a homeowner a [who
demonstrates an inability to pay the] fee in connection with a
complaint, request, or other proceeding under Chapter 409 or
Subtitle D.
SECTION 16. Chapter 408, Property Code, is amended by
adding Sections 408.006 and 408.007 to read as follows:
Sec. 408.006. USE OF TECHNOLOGY. The commission shall
implement a policy requiring the commission to use appropriate
technological solutions to improve the commission's ability to
perform its functions. The policy must ensure that the public is
able to interact with the commission on the Internet.
Sec. 408.007. NEGOTIATED RULEMAKING AND ALTERNATIVE
DISPUTE RESOLUTION PROCEDURES. (a) The commission shall develop
and implement a policy to encourage the use of:
(1) negotiated rulemaking procedures under Chapter
2008, Government Code, for the adoption of commission rules; and
(2) appropriate alternative dispute resolution
procedures under Chapter 2009, Government Code, to assist in the
resolution of internal and external disputes under the commission's
jurisdiction.
(b) The commission's procedures relating to alternative
dispute resolution must conform, to the extent possible, to any
model guidelines issued by the State Office of Administrative
Hearings for the use of alternative dispute resolution by state
agencies.
(c) The commission shall designate a trained person to:
(1) coordinate the implementation of the policy
adopted under Subsection (a);
(2) serve as a resource for any training needed to
implement the procedures for negotiated rulemaking or alternative
dispute resolution; and
(3) collect data concerning the effectiveness of those
procedures, as implemented by the commission.
SECTION 17. Section 409.001(a), Property Code, is amended
to read as follows:
(a) The commission shall prepare information of public
interest describing the functions of the commission, the provisions
of the limited statutory warranty and building and performance
standards, the state [state-sponsored] inspection program [and
dispute resolution process], and the procedures by which complaints
or requests are filed with and resolved by the commission.
SECTION 18. Section 409.0011(b), Property Code, is amended
to read as follows:
(b) The commission shall create and make accessible to the
public an electronic list and a hard-copy list of builders who:
(1) are licensed by [registered with] the commission;
and
(2) provide in this state building services, including
accessible floor plans, to persons with mobility-related special
needs.
SECTION 19. Section 409.004, Property Code, is amended to
read as follows:
Sec. 409.004. DIRECTORY OF BUILDERS AND CERTAIN INFORMATION
REGARDING BUILDERS. (a) The commission shall make available to the
public a list of each builder who holds a license [certificate of
registration] issued under Chapter 416.
(b) The commission shall post information on the
commission's Internet website regarding the number of complaints
the commission receives during a calendar year regarding a builder
that are justified, expressed as a percentage of the total number of
homes registered by the builder during the calendar year. A
complaint is justified if the complaint is closed and the
commission has taken disciplinary action against the builder. The
commission shall update annually the information required by this
subsection.
SECTION 20. The heading to Subtitle C, Title 16, Property
Code, is amended to read as follows:
SUBTITLE C. BUILDER LICENSING [REGISTRATION]
SECTION 21. The heading to Chapter 416, Property Code, is
amended to read as follows:
CHAPTER 416. LICENSE [CERTIFICATE OF REGISTRATION]
SECTION 22. Section 416.001, Property Code, is amended to
read as follows:
Sec. 416.001. LICENSE [REGISTRATION] REQUIRED; RULES;
OFFENSE. (a) Notwithstanding any other law, a [A] person may not
engage in business as a builder in this state or act as a builder
unless the person holds a license [certificate of registration]
under this chapter.
(b) The commission shall adopt all rules necessary to
implement the licensing program under this chapter, including rules
relating to:
(1) license eligibility, subject to the requirements
of this chapter;
(2) renewal requirements, examination requirements,
and continuing education requirements for license holders;
(3) security and insurance requirements;
(4) disciplinary actions; and
(5) any other issues as determined necessary by the
commission.
(c) A person commits an offense if the person violates
Subsection (a). An offense under this section is a Class B
misdemeanor.
SECTION 23. The heading to Section 416.002, Property Code,
is amended to read as follows:
Sec. 416.002. LICENSE APPLICATION [FOR CERTIFICATE].
SECTION 24. Sections 416.002(a) and (e), Property Code, are
amended to read as follows:
(a) An applicant for an original or renewal license
[certificate of registration] must submit an application on a form
prescribed by the commission.
(e) Based on a commission investigation of an alleged
violation of Sections 418.001(13)-(19) [418.001(a)(14)-(20)], the
commission may require an applicant for renewal of a license
[certificate of registration] to disclose to the commission every
person with an ownership interest in the applicant's business as a
builder. This subsection does not apply to a publicly traded
company.
SECTION 25. Section 416.004(a), Property Code, is amended
to read as follows:
(a) The commission shall charge and collect:
(1) a filing fee for an application for an original
license [certificate of registration] that does not exceed $500;
(2) a fee for renewal of a license [certificate of
registration] that does not exceed $300; and
(3) a late fee that does not exceed the amount of the
fee due if payment of a license [registration] application or
renewal fee due under this title is late.
SECTION 26. Section 416.005, Property Code, is amended to
read as follows:
Sec. 416.005. GENERAL ELIGIBILITY REQUIREMENTS. (a) A
person may not receive an original license [a certificate of
registration] under this chapter unless:
(1) the person, at the time of the application:
(A) is at least 18 years of age; and
(B) is a citizen of the United States or a
lawfully admitted alien; [and]
(2) the commission is satisfied with the person's
honesty, trustworthiness, and integrity based on information
supplied or discovered in connection with the person's application;
and
(3) the person complies with Subsection (b).
(b) To receive an original license, the person must complete
an eight-hour course, one hour of which must address ethics and two
hours of which must address:
(1) limited statutory warranties;
(2) building and performance standards;
(3) requirements of the International Residential
Code as adopted under Section 430.001; and
(4) other statutes and rules that apply to builders
under this title.
SECTION 27. Chapter 416, Property Code, is amended by
adding Section 416.0051 to read as follows:
Sec. 416.0051. BOND REQUIREMENT. (a) In addition to the
requirements for the issuance of an original license under Section
416.005, before an original license may be issued, the person to
whom the license is to be issued must file with the commission a
surety bond approved by the commission that is:
(1) in the amount of $25,000;
(2) payable to the commission; and
(3) for the benefit of a party who suffers damages
arising from the license holder's violation of this title.
(b) The security required by this section must be maintained
by the license holder in the required amount as a condition of
licensure.
SECTION 28. Section 416.006, Property Code, is amended to
read as follows:
Sec. 416.006. ADDITIONAL ELIGIBILITY REQUIREMENTS FOR
BUSINESS ENTITIES. (a) To be eligible for an original or renewal
license [certificate of registration] under this chapter:
(1) a corporation, other than a nonprofit corporation,
must designate one of its officers as its agent for the purposes of
this chapter;
(2) a limited liability company must designate one of
its managers as its agent for the purposes of this chapter; [and]
(3) a partnership, limited partnership, or limited
liability partnership must designate one of its managing partners
as its agent for the purposes of this chapter; and
(4) a nonprofit corporation must designate one of its
officers or executive-level administrators as its agent for the
purposes of this chapter.
(b) A corporation, limited liability company, partnership,
limited partnership, or limited liability partnership is not
eligible to hold a license [be registered] under this chapter and
may not act as a builder unless the entity's designated agent is
individually licensed [registered] as a builder.
SECTION 29. Chapter 416, Property Code, is amended by
adding Section 416.0061 to read as follows:
Sec. 416.0061. EXAMINATION. (a) Except as otherwise
provided by this section and effective May 1, 2010, each applicant
for an original individual license under this chapter must take a
licensing examination prescribed by the commission. An applicant
is entitled to take the examination prescribed by the commission
if:
(1) the commission determines that the applicant meets
the qualifications required by this chapter; and
(2) the applicant pays the fees required by the
commission.
(b) Each examination administered under this section must
be prepared by the commission or by a multistate contractor
licensing association approved by the commission. The commission
shall ensure that the examination is administered in various
locations throughout the state.
(c) The examination must be designed to determine the
fitness of the applicant to engage in business as a builder in this
state.
(d) A person who, immediately before January 1, 2010, held a
certificate of registration issued by the commission or who
immediately before May 1, 2010, held a license issued by the
commission is eligible for a license without satisfying the
examination requirement of this section if the commission
determines that the person's certificate or license was active and
in good standing. If the person's certificate was not active or was
not in good standing as of December 31, 2009, or the person's
license was not active or was not in good standing as of August 31,
2011, the person is required to satisfy the examination
requirement. This subsection expires December 31, 2014.
SECTION 30. Section 416.007, Property Code, is amended to
read as follows:
Sec. 416.007. LICENSE ISSUANCE [OF CERTIFICATE]. (a) Not
later than the 15th day after the date the commission receives an
application from an applicant who meets the requirements of this
chapter, the commission shall issue an original or provisional
license, as appropriate, [a certificate of registration] to the
applicant. A builder who holds a provisional license may operate as
a builder under this chapter.
(b) Except as provided by Section 416.0071, the license [The
certificate of registration] remains in effect for the period
prescribed by the commission if the license [certificate] holder
complies with this chapter and pays the appropriate renewal fees.
(c) The commission shall issue one license [certificate of
registration] for each business entity licensed [registered] under
this chapter.
SECTION 31. Chapter 416, Property Code, is amended by
adding Section 416.0071 to read as follows:
Sec. 416.0071. PROVISIONAL LICENSE. (a) The commission
may grant a provisional license to an applicant for a license in
this state who:
(1) has been licensed or registered in good standing
to engage in business as a builder for at least two years in another
jurisdiction that has licensing or registration requirements
substantially equivalent to the requirements of this title;
(2) is currently licensed or registered in that
jurisdiction; and
(3) has passed a national or other examination
recognized by the commission.
(b) The commission shall issue a provisional license to a
person who satisfies the requirements of Section 416.005(a) but who
has not completed the course required by Section 416.005(b).
(c) A provisional license under Subsection (a) is valid for
six months from the date of issuance.
(d) A provisional license under Subsection (b) is valid for
30 days from the date of issuance. The commission shall issue an
original license to the holder of a provisional license under
Subsection (b) if the person completes the required course on or
before the 30th day after the date the provisional license was
issued.
SECTION 32. The heading to Section 416.008, Property Code,
is amended to read as follows:
Sec. 416.008. DENIAL OF LICENSE [REGISTRATION].
SECTION 33. Section 416.008(a), Property Code, is amended
to read as follows:
(a) If the commission denies an application for an original
license [certificate of registration] or a renewal application, the
commission shall give written notice to the applicant not later
than the 15th day after the date the commission receives the
application.
SECTION 34. Section 416.009, Property Code, is amended to
read as follows:
Sec. 416.009. LICENSE EXPIRATION [OF CERTIFICATE]. (a)
The commission may issue or renew a license, other than a
provisional license, [certificate of registration] for a period
that does not exceed 24 months.
(b) The commission by rule may adopt a system under which
licenses [certificates of registration] expire on several dates
during the year. The commission shall adjust the date for payment
of renewal fees accordingly.
(c) In a year in which the expiration date for a license
[certificate of registration] is changed, the renewal fee payable
shall be prorated on a monthly basis so that the license
[certificate] holder pays only that portion of the fee that is
allocable to the number of months during which the license
[certificate of registration] is valid. On renewal of the license
[certificate of registration] on the new expiration date, the total
renewal fee is payable.
SECTION 35. Sections 416.010(a), (b), (c), and (d),
Property Code, are amended to read as follows:
(a) A builder shall maintain a fixed office location in this
state. The address of the builder's principal place of business
must be designated on the license [certificate of registration].
(b) Not later than the 30th day after the date a builder
moves from the address designated on the license [certificate of
registration], the builder shall submit an application,
accompanied by the appropriate fee, for a license [certificate of
registration] that designates the new location of the builder's
principal place of business. The commission shall issue a license
[certificate of registration] that designates the new location if
the new location complies with the requirements of this section.
(c) If a builder operates under any name other than the name
that is set forth on the builder's license [certificate of
registration], the builder shall, within 45 days of operating under
this other name, disclose this other name to the commission.
(d) This section does not require a builder to obtain a
license [certificate of registration] for each sales office.
SECTION 36. Section 416.011(a), Property Code, is amended
to read as follows:
(a) The commission shall establish rules and procedures for
a program through which a builder can be designated as a "Texas Star
Builder." A builder's participation in the program is voluntary
and is not a requirement for the issuance of a license [certificate
of registration] required under this chapter.
SECTION 37. Sections 416.012(a), (c), (d), and (e),
Property Code, are amended to read as follows:
(a) The commission shall recognize or administer continuing
education programs for builders licensed [registered] by the
commission. A licensed [registered] builder must participate in
the programs to the extent required by this section to maintain the
builder's license [registration].
(c) A builder who is licensed with the commission
[registered before September 1, 2007, and all other builders who
register for the first time on or after September 1, 2007, and
satisfy the requirements of Subsection (b),] must complete 16
[five] hours of continuing education every two [five] years, one
hour of which must address ethics and may not be completed by
self-directed study.
(d) The commission shall permit a licensed [registered]
builder to receive continuing education credit for educational,
technical, ethical, or professional management activities related
to the practice of residential construction, including:
(1) successfully completing or auditing a course
sponsored by an institution of higher education;
(2) successfully completing a course certified by a
professional or trade organization;
(3) attending a seminar, tutorial, short course,
correspondence course, videotaped course, or televised course on
the practice of residential construction;
(4) participating in an in-house course sponsored by a
corporation or other business entity;
(5) teaching a course described by Subdivisions
(1)-(4);
(6) publishing an article, paper, or book on the
practice of residential construction;
(7) making or attending a presentation at a meeting of
a residential or builder association or organization or writing a
paper presented at the meeting;
(8) participating in the activities of a residential
or builder association, including serving on a committee of the
organization; and
(9) engaging in self-directed study on the practice of
residential construction.
(e) A licensed [registered] builder may not receive more
than two continuing education credit hours during each two-year
[five-year] period for engaging in self-directed study.
SECTION 38. Section 417.003(a), Property Code, is amended
to read as follows:
(a) The commission shall charge and collect:
(1) a filing fee for an application for certification
under this chapter that does not exceed $100;
(2) a fee for renewal of a certification under this
chapter that does not exceed $50; and
(3) a late fee that does not exceed the amount of the
fee due if payment of a certification [registration] or application
fee due under this title is late.
SECTION 39. Section 418.001, Property Code, is amended to
read as follows:
Sec. 418.001. GROUNDS FOR DISCIPLINARY ACTION. A person,
including a builder or a person who is designated as a builder's
agent under Section 416.006, or a person who owns or controls a
majority ownership interest in the builder is subject to
disciplinary action under this chapter for:
(1) fraud or deceit in obtaining a license,
registration, or certification under this subtitle;
(2) misappropriation or misapplication of trust funds
in the practice of residential construction, including a violation
of Chapter 32, Penal Code, or Chapter 162, if found by a final
nonappealable court judgment;
(3) naming false consideration in a contract to sell a
new home or in a construction contract;
(4) discriminating on the basis of race, color,
religion, sex, national origin, or ancestry;
(5) publishing a false or misleading advertisement;
(6) failure to honor, within a reasonable time, a
check issued to the commission, or any other instrument of payment,
including a credit or debit card or electronic funds transfer,
after the commission has sent by certified mail a request for
payment to the person's last known business address, according to
commission records;
(7) failure to pay an administrative penalty assessed
by the commission under Chapter 419 or a fee due under Chapter 426;
(8) failure to pay a final nonappealable court
judgment arising from a construction defect or other transaction
between the person and a homeowner;
(9) failure to register a home as required by Section
426.003;
(10) failure to remit the fee for registration of a
home under Section 426.003;
(11) [failure to reimburse a homeowner the amount
ordered by the commission as provided by Section 428.004(d);
[(12)] engaging in statutory or common-law fraud or
misappropriation of funds, as determined by the commission after a
hearing under Section 418.003;
(12) [(13)] a [repeated] failure to participate in the
state [state-sponsored] inspection program [and dispute resolution
process] if required by this title;
(13) [(14)] failure to obtain a license [register as a
builder] as required under Chapter 416;
(14) [(15)] using or attempting to use a license
[certificate of registration] that has expired or that has been
revoked;
(15) [(16)] falsely representing that the person
holds a license [certificate of registration] issued under Chapter
416;
(16) [(17)] acting as a builder using a name other
than the name or names disclosed to the commission;
(17) [(18)] aiding, abetting, or conspiring with a
person who does not hold a license [certificate of registration] to
evade the provisions of this title or rules adopted under this
title, if found by a final nonappealable court judgment;
(18) [(19)] allowing the person's license
[certificate of registration] to be used by another person;
(19) [(20)] acting as an agent, partner, or associate
of a person who does not hold a license [certificate of
registration] with the intent to evade the provisions of this title
or rules adopted under this title;
(20) [(21)] a failure to reasonably perform on an
accepted offer to repair or a [repeated] failure to make an offer to
repair based on:
(A) the recommendation of a third-party
inspector under Section 428.004; or
(B) the final holding of an appeal under Chapter
429;
(21) [(22)] a [repeated] failure to respond to a
commission request for information;
(22) [(23)] a failure to obtain a building permit
required by a political subdivision before constructing a new home
or an improvement to an existing home;
(23) [(24)] abandoning, without justification, any
home improvement contract or new home construction project engaged
in or undertaken by the person, if found to have done so by a final,
nonappealable court judgment;
(24) [(25)] a [repeated] failure to comply with the
requirements of Subtitle F; [or]
(25) [(26)] a failure to comply with the reporting
requirements of Section 428.006;
(26) a failure to substantially complete all the
obligations under an express contract for construction without
reasonable grounds for the failure, if found to have done so by a
final, nonappealable court judgment;
(27) a failure to comply with a commission rule
related to the duties and obligations of a third-party inspector
under Chapter 427;
(28) a failure to use a contract form adopted or
approved by the commission under Section 420.004; or
(29) otherwise violating this title or a commission
rule adopted under this title.
SECTION 40. Sections 418.002(a) and (c), Property Code, are
amended to read as follows:
(a) On a determination that a ground for disciplinary action
under Section 418.001 exists, the commission may:
(1) revoke or suspend a license [registration] or
certification [in the event of repeated prior violations that have
resulted in disciplinary action];
(2) probate the suspension of a license [registration]
or certification;
(3) formally or informally reprimand a licensed
[registered] or certified person; [or]
(4) impose an administrative penalty under Chapter
419; or
(5) prohibit a person or entity from acting as a
builder under this title, from acting as a contractor, as defined by
Section 27.001, or from owning or operating a company that supplies
goods or services to a builder or contractor for a period of time
and under conditions determined by the commission.
(c) For purposes of Section 418.001(11) [418.001(12)], the
commission may not conduct a hearing or revoke or suspend a license
[registration] or certification unless the determination of
statutory or common-law fraud or misappropriation of funds has been
made in a final nonappealable judgment by a court.
SECTION 41. Section 418.004(c), Property Code, is amended
to read as follows:
(c) An appeal to a district court of a final decision of the
commission under this section regarding a revocation or suspension
of a license [registration] or certification is determined by
substantial evidence.
SECTION 42. Section 419.002(c), Property Code, is amended
to read as follows:
(c) A violation of Section 418.001(2) or (11) [(12)] is
punishable by a penalty not to exceed $100,000.
SECTION 43. Section 419.004, Property Code, is amended to
read as follows:
Sec. 419.004. ENFORCEMENT OF PENALTY. If a person does not
pay an administrative penalty imposed under this chapter and
enforcement of the penalty is not stayed, the commission may:
(1) refer the matter to the attorney general for
collection of the penalty; or
(2) enforce any part of the order that specifies
disciplinary action to be taken against the licensed [registered]
or certified person if the licensed [registered] or certified
person fails to pay the administrative penalty within the time
prescribed.
SECTION 44. The heading to Chapter 420, Property Code, is
amended to read as follows:
CHAPTER 420. REGULATION OF BUILDING CONTRACTS AND TRANSFERS OF
TITLE FROM BUILDER [CONTRACT PROVISIONS]
SECTION 45. Section 420.001, Property Code, is amended to
read as follows:
Sec. 420.001. REQUIRED WRITTEN DISCLOSURE. In a contract
for the construction of a new home or an improvement to an existing
home required to be registered under Section 426.003, the contract
must contain a notice to the consumer in at least 10-point bold type
or the computer equivalent that gives the telephone number of the
commission and states:
STATE LAW REQUIRES THAT A PERSON HOLD A LICENSE [CERTIFICATE
OF REGISTRATION] FROM THE TEXAS RESIDENTIAL CONSTRUCTION
COMMISSION IF THE PERSON CONTRACTS TO CONSTRUCT A NEW HOME OR IF THE
PERSON CONTRACTS TO CONSTRUCT A MATERIAL IMPROVEMENT TO AN EXISTING
HOME OR CERTAIN IMPROVEMENTS TO THE INTERIOR OF AN EXISTING HOME AND
THE TOTAL COST OF THE IMPROVEMENT IS $10,000 OR MORE (INCLUDING
LABOR AND MATERIALS).
YOU MAY CONTACT THE COMMISSION AT [insert commission's
telephone number] TO FIND OUT WHETHER THE BUILDER HAS A VALID
LICENSE [CERTIFICATE OF REGISTRATION]. THE COMMISSION HAS
INFORMATION AVAILABLE ON THE HISTORY OF BUILDERS, INCLUDING
SUSPENSIONS, REVOCATIONS, COMPLAINTS, AND RESOLUTION OF
COMPLAINTS.
THIS CONTRACT IS SUBJECT TO CHAPTER 426, PROPERTY CODE. THE
PROVISIONS OF THAT CHAPTER GOVERN THE PROCESS THAT MUST BE FOLLOWED
IN THE EVENT A DISPUTE ARISES OUT OF AN ALLEGED CONSTRUCTION DEFECT.
IF YOU HAVE A COMPLAINT CONCERNING A CONSTRUCTION DEFECT YOU MAY
CONTACT THE COMMISSION AT THE TOLL-FREE TELEPHONE NUMBER TO LEARN
HOW TO PROCEED UNDER THE STATE [STATE-SPONSORED] INSPECTION PROGRAM
[AND DISPUTE RESOLUTION PROCESS].
SECTION 46. Section 420.002, Property Code, is amended to
read as follows:
Sec. 420.002. REQUIRED CONTRACT PROVISIONS. In a contract
for the construction of a new home or an improvement to an existing
home required to be registered under Section 426.003, the contract
is not enforceable against a homeowner unless the contract:
(1) contains the builder's name and license
[certificate of registration] number; and
(2) contains the notice required by Section 420.001.
SECTION 47. Section 420.003, Property Code, is amended to
read as follows:
Sec. 420.003. BINDING ARBITRATION CONTRACT PROVISION. (a)
In a contract for the construction of a new home or the improvement
of an existing home required to be registered under Section 426.003
and that contains a provision requiring the parties to submit a
dispute arising under the contract to binding arbitration, or in
any agreement related to the contract that requires the parties to
submit a dispute to arbitration, the provision requiring the
submission of a dispute to arbitration must be prominently
displayed in the document and conspicuously printed or typed in a
size equal to at least 12-point [10-point] bold type or the computer
equivalent.
(b) A written arbitration agreement to arbitrate a
controversy that exists at the time of the agreement that is entered
into in connection with a contract described by Subsection (a) must
include a statement, initialed by each party to the agreement,
stating that the party has chosen to arbitrate a controversy that
exists at the time of the agreement. A written arbitration
agreement to arbitrate a controversy that arises between the
parties after the date of the agreement that is a provision of a
contract described by Subsection (a), or an agreement entered into
in connection with the contract, must include a statement,
initialed by each party to the agreement, stating that the party has
chosen to arbitrate a controversy that arises between the parties
after the date of the agreement. A written arbitration agreement
must also contain a second statement, immediately following the
other statement required by this subsection, that is conspicuously
printed or typed in at least 12-point bold-faced type or the
computer equivalent and initialed by the homeowner that states that
the homeowner knowingly and voluntarily waives the homeowner's
right to a trial by jury of all disputes by signing the agreement.
(c) A contract provision or agreement described by this
section [Subsection (a)] is not enforceable against the homeowner
unless the requirements of this section [Subsection (a)] are met.
SECTION 48 .Chapter 420, Property Code, is amended by
adding Section 420.004 to read as follows:
Sec. 420.004. STANDARD CONTRACT FORMS. (a) The commission
shall adopt rules in the public's best interest that require
builders to use contract forms prepared with the assistance of the
Texas Real Estate Broker-Lawyer Committee and adopted by the
commission for the sale or construction of a new home.
(b) The commission may not prohibit a builder from using a
contract form for the sale or construction of a new home that is:
(1) prepared by the purchaser; or
(2) prepared by an attorney and required by the
purchaser.
(c) A contract form adopted by the commission must comply
with this chapter, except that the commission may not adopt a
contract form that includes a provision that requires the parties
to submit a dispute arising under the contract to binding
arbitration.
(d) A builder may use the builder's own contract form if the
builder has submitted the form to the commission and the commission
has approved the builder's use of the form. The commission shall
approve or disapprove a contract form submitted under this
subsection on or before the 30th day after the date the form is
submitted.
(e) In considering whether to approve a builder's contract
form under Subsection (d), the commission shall approve the form
only if the commission determines that the contract form is in the
public's best interest and consistent with the criteria used by the
commission to adopt standard forms under Subsection (a).
SECTION 49. Chapter 420, Property Code, is amended by
adding Section 420.005 to read as follows:
Sec. 420.005. FULL DISCLOSURE OF RESALE BY BUILDER. (a)
Before a contract may be executed or money exchanged between a
builder and a buyer for purchase of a home that, because of one or
more construction defects, the builder repurchased from a previous
buyer from the builder, the builder must provide to the buyer a
document that fully discloses the nature of and the builder's
remediation of each of those construction defects.
(b) In addition to a disclosure of the nature of each
construction defect and the remediation work performed, the
disclosure under Subsection (a) must include information relating
to:
(1) any products installed in the home relating to the
remediation;
(2) care and component warranties of those products;
(3) building standards used in performing the
remediation; and
(4) any risks and hazards of the home.
SECTION 50. Chapter 420, Property Code, is amended by
adding Section 420.006 to read as follows:
Sec. 420.006. CONSTRUCTION DOCUMENTS. A builder who
constructs a new home must provide a copy of the plat and the
blueprints used in the construction of the home:
(1) at the time the construction is completed, to the
person who contracted with the builder for the construction of the
home; or
(2) at the time title to the home is transferred by the
builder, to the person who purchases the home from the builder.
SECTION 51. Subtitle C, Title 16, Property Code, is amended
by adding Chapter 421 to read as follows:
CHAPTER 421. HOMEOWNER RECOVERY FUND
Sec. 421.001. DEFINITIONS. In this chapter:
(1) "Fund" means the homeowner recovery fund.
(2) "Fund account" means the account established for
the deposit of money held by the fund.
Sec. 421.002. LEGISLATIVE INTENT. The legislature intends
that the fund serve as a resource of last resort for homeowners who
are unable to collect damages from a builder arising from the
builder's violation of this title or to get a confirmed
construction defect repaired by a builder.
Sec. 421.003. FUND ESTABLISHED. The homeowner recovery
fund is established.
Sec. 421.004. ACCOUNT. (a) The fund account is established
with the Texas Treasury Safekeeping Trust Company in accordance
with procedures adopted by the comptroller. The comptroller shall
account for the deposited money separately from all other money.
(b) The comptroller shall annually transfer to the credit of
the fund account 10 percent of each administrative penalty
collected under Chapter 419.
(c) Notwithstanding Sections 404.071 and 404.106,
Government Code, the pro rata portion of interest earned by the
trust company from money in the fund shall be allocated to the fund.
(d) The commission shall notify the comptroller of the
existence of money to be credited to the fund account under this
section. The commissioner must enter an order to transfer amounts
from the fund account.
(e) The comptroller shall transfer to the credit of the fund
account any money collected by the commission during state fiscal
year 2010 that exceeds the commission's direct and indirect
operating costs. This subsection expires September 1, 2011.
Sec. 421.005. CLAIM FOR PAYMENT FROM ACCOUNT. (a) A
homeowner who participates in the state inspection process in
connection with a request filed under Section 428.001 or engages in
mediation under Section 428A.004 and sustains damages arising from
a builder's violation of this title is entitled to payment from the
fund if the homeowner:
(1) obtains a court judgment against a builder for
damages arising from the violation for which execution is returned
without a satisfaction of the total amount of the judgment and
perfects a judgment lien for the unsatisfied amount;
(2) in a bankruptcy proceeding involving the builder,
proves a claim against the builder for damages arising from the
builder's violation of this title that is disallowed or rendered
uncollectible by an order or other final ruling of the bankruptcy
court; or
(3) proves in accordance with rules adopted by the
commission that:
(A) the homeowner sustained damages arising from
the builder's violation of this title, including court costs and
reasonable attorney's fees, of not more than $10,000;
(B) the builder has not offered to repair or has
failed to repair the construction defect or otherwise resolve the
dispute arising from the construction defect; and
(C) the damages are uncollectible from the
builder without pursuing a civil action against the builder.
(b) After receiving a request for payment from the fund
under Subsection (a)(3), the commission shall hold a hearing to
determine whether the person who makes the request is entitled to
payment and, if so, the amount of the payment to which the person is
entitled.
(c) A person entitled to payment under this section may
collect only the lesser of:
(1) the amount of actual damages awarded or proven
that the person was unable to collect from the builder; or
(2) $175,000.
SECTION 52. The heading to Subtitle D, Title 16, Property
Code, is amended to read as follows:
SUBTITLE D. STATE [STATE-SPONSORED] INSPECTION PROGRAM [AND
DISPUTE RESOLUTION PROCESS]; STATUTORY WARRANTY AND BUILDING AND
PERFORMANCE STANDARDS
SECTION 53. Section 426.003, Property Code, is amended by
amending Subsections (a) and (b) and adding Subsections (e) and (f)
to read as follows:
(a) A builder shall register a new home with the commission
on or before the 15th day of the month following the month in which
the transfer of title from the builder to the homeowner occurs.
[The registration must include the information required by the
commission by rule and be accompanied by the fee required by
Subsection (c).]
(b) A builder who enters a transaction governed by this
title, other than the transfer of title of a new home from the
builder to the seller, shall register the home involved in the
transaction with the commission[. The registration must:
[(1) include the information required by the
commission by rule;
[(2) be accompanied by the fee required by Subsection
(c); and
[(3) be delivered to the commission] not later than
the 15th day after the earlier of:
(1) [(A)] the date of the substantial completion of
the home or other residential construction project;
(2) [(B)] the date the new home is occupied; or
(3) [(C)] the date of issuance of a certificate of
occupancy or a certificate of completion.
(e) A builder who registers a home or a residential
construction project under Subsection (a) or (b) shall:
(1) include the information required by the commission
by rule;
(2) state whether the registration concerns a new
home, a material improvement to an existing home, or an improvement
to the interior of an existing home when the cost of the work
exceeds $10,000; and
(3) pay the fee required by Subsection (c).
(f) Notwithstanding Subsections (a) and (b), a builder is
not required to comply with this subtitle after completing
construction of a partially completed home owned by a mortgagee or a
beneficiary under a deed of trust who acquired the partially
completed home:
(1) at a sale conducted under a power of sale under a
deed of trust or a court-ordered foreclosure; or
(2) by a deed in lieu of foreclosure.
SECTION 54. The heading to Section 426.004, Property Code,
is amended to read as follows:
Sec. 426.004. EXPENSES [FEES].
SECTION 55. Section 426.004(a), Property Code, is amended
to read as follows:
(a) A builder [party] who is involved in a dispute for which
a request is submitted [submits a request] under this subtitle
shall pay any amount required by the commission to offset [cover]
the expense of the third-party inspector.
SECTION 56. Section 426.005, Property Code, is amended by
amending Subsections (b) and (f) and adding Subsections (g), (h),
(i), and (j) to read as follows:
(b) Except as provided by Subsections (g) and (h), an [An]
action described by Subsection (a) must be filed:
(1) on or before the expiration of any applicable
statute of limitations or by the 45th day after the date the
third-party inspector issues the inspector's recommendation,
whichever is later; or
(2) if the recommendation is appealed, on or before
the expiration of any applicable statute of limitations or by the
45th day after the date the commission issues its ruling on the
appeal, whichever is later.
(f) A homeowner is not required to comply with this subtitle
if:
(1) at the time a homeowner and a builder enter into a
contract covered by this title the builder was not licensed
[registered]; or
(2) the license [certificate of registration] of the
builder has been revoked.
(g) Except as provided by Subsection (h), an action
described by Subsection (a) may be initiated by the homeowner or
builder:
(1) for a dispute involving workmanship and materials,
on or after the 76th day after the date the request for a state
inspection is submitted, except as provided by Subdivision (3);
(2) for a dispute involving a structural matter, on or
after the 91st day after the date the request for a state inspection
is submitted, except as provided by Subdivision (3); or
(3) if the third-party inspector's recommendation is
appealed and a ruling on the appeal is not issued in the time
prescribed by Section 429.001, on or after the day after the date
the panel is required to issue the ruling under that section.
(h) If a homeowner or builder causes a delay of more than
five days in the completion of the inspection process under the
state inspection program or any appeal under the program, the time
required under Subsection (g) to initiate an action against the
homeowner or builder who causes the delay is extended by the number
of days of the delay.
(i) An action filed under Subsection (g) must be filed on or
before the later of:
(1) the expiration of the applicable statute of
limitations; or
(2) the 45th day after the first date on which
Subsection (g) authorizes the filing of the action.
(j) Once a final, unappealable recommendation or a ruling on
an appeal of a recommendation is issued under this subtitle, a
homeowner or builder may file an action described by Subsection
(a). A homeowner is not required to delay the filing of an action to
allow the builder an opportunity to make an offer of settlement or
repair under Sections 27.004(b) and (c) or an election to purchase
the residence under Section 27.0042. The filing of an action by the
homeowner does not affect a builder's right to make an offer of
settlement or repair in the time provided by Section 27.004(b) or an
election to purchase the residence in the time provided by Section
27.0042.
SECTION 57. Section 426.006, Property Code, is amended to
read as follows:
Sec. 426.006. TIME FOR REQUESTING INSPECTION [AND DISPUTE
RESOLUTION]. (a) For an alleged defect discovered during an
applicable warranty period, an [the state-sponsored] inspection
through the state inspection program [and dispute resolution
process] must be requested on or before the second anniversary of
the date of discovery of the conditions claimed to be evidence of
the construction defect but not later than the 90th day after the
date the applicable warranty period expires.
(b) If the alleged defect would violate the statutory
warranty of habitability and was not discoverable by a reasonable,
prudent inspection or examination of the home or improvement within
the applicable warranty period, the [state-sponsored] inspection
[and dispute resolution process] must be requested:
(1) on or before the second anniversary of the date of
discovery of the conditions claimed to be evidence of the
construction defect; and
(2) not later than the 10th anniversary of the date of
the initial transfer of title from the builder to the initial owner
of the home or improvement that is the subject of the dispute or, if
there is not a closing, the date on which the contract for
construction of the improvement is entered into.
SECTION 58. Section 426.007, Property Code, is amended to
read as follows:
Sec. 426.007. ADMISSIBILITY OF CERTAIN EVIDENCE. A person
who submits a request for [state-sponsored] inspection under
Section 428.001 [and dispute resolution] or responds to a request
made under that section [Chapter 428] must disclose in the request
or response the name of any expert who, before the request is
submitted, inspected the home on behalf of the requestor or
respondent in connection with the construction defect alleged in
the request or response. If an expert's name is known to the
requestor or respondent at the time of the request or response and
is not disclosed as required by this section, the requestor or
respondent may not designate the person as an expert or use
materials prepared by that person in:
(1) the [state-sponsored] inspection [and dispute
resolution] process arising out of the request; or
(2) any action arising out of the construction defect
that is the subject of the request or response.
SECTION 59. Sections 427.001(c), (c-1), and (d), Property
Code, are amended to read as follows:
(c) A third-party inspector who inspects an issue involving
a structural matter [or involving workmanship, materials, and a
structural matter] must:
(1) be an approved structural engineer or approved
architect; and
(2) have a minimum of five years' experience in
residential construction.
(c-1) For an inspection request with an issue [A third-party
inspector who inspects an issue] involving a structural matter and
an unrelated issue involving workmanship and materials matters, the
commission must assign a third-party inspector who meets [must
meet] the requirements of Subsections (b) and (c) or assign two
third-party inspectors, one who meets the requirements of
Subsection (b) and one who meets the requirements of Subsection
(c), to work in conjunction with one another to inspect the alleged
defects.
(d) Each third-party inspector must receive, in accordance
with commission rules:
(1) initial training regarding the state
[state-sponsored] inspection program [and dispute resolution
process] and this subtitle; and
(2) annual continuing education in the inspector's
area of practice.
SECTION 60. Section 427.002(a), Property Code, is amended
to read as follows:
(a) The commission shall employ state inspectors to:
(1) review on an appeals panel the recommendations of
third-party inspectors;
(2) provide consultation to third-party inspectors;
and
(3) administer the state [state-sponsored] inspection
program [and dispute resolution process].
SECTION 61. The heading to Chapter 428, Property Code, is
amended to read as follows:
CHAPTER 428. STATE [STATE-SPONSORED] INSPECTION PROGRAM [AND
DISPUTE RESOLUTION PROCESS]
SECTION 62. Sections 428.001(a) and (b), Property Code, are
amended to read as follows:
(a) If a dispute between a homeowner and a builder arises
out of an alleged construction defect, the homeowner or the builder
may submit to the commission a written request for
[state-sponsored] inspection under this subtitle [and dispute
resolution]. If the builder files a request under this section, the
homeowner may submit a request for mediation as provided by Section
428A.004.
(b) The request must:
(1) specify in reasonable detail each alleged
construction defect that is a subject of the request;
(2) state the amount of any known out-of-pocket
expenses and engineering or consulting fees incurred by the
homeowner in connection with each alleged construction defect;
(3) include any evidence that depicts the nature and
cause of each alleged construction defect and the nature and extent
of repairs necessary to remedy the construction defect, including,
if available, expert reports, photographs, and videotapes, if that
evidence would be discoverable under Rule 192, Texas Rules of Civil
Procedure;
(4) be accompanied by the fees required under Section
426.004, if applicable; and
(5) state the name of any person who has, on behalf of
the requestor, inspected the home in connection with an alleged
construction defect.
SECTION 63. Chapter 428, Property Code, is amended by
adding Section 428.0011 to read as follows:
Sec. 428.0011. PROCESSING AND PRIORITIZING OF REQUESTS.
(a) The commission shall adopt rules for processing requests under
this chapter that include guidelines for prioritizing the handling
of the requests and allocating agency staff and other resources in
the most efficient manner to address the requests.
(b) In adopting rules under this section, the commission
shall consider:
(1) appropriate ways to expedite inspections under the
state inspection program under emergency circumstances, including
cases involving issues of habitability;
(2) appropriate handling of complex case material and
whether different handling is appropriate for requests involving a
structural defect and requests involving workmanship and
materials; and
(3) the most efficient ways to use agency staff.
SECTION 64. Section 428.002(a), Property Code, is amended
to read as follows:
(a) At [In addition to the right of inspection provided by
Section 428.001(c), at] any time before the conclusion of the
[state-sponsored] inspection [and dispute resolution] process
under this subtitle and on the builder's written request, the
builder shall be given reasonable opportunity to inspect the home
that is the subject of the request or have the home inspected to
determine the nature and cause of the construction defect and the
nature and extent of repairs necessary to remedy the construction
defect.
SECTION 65. Section 428.003, Property Code, is amended to
read as follows:
Sec. 428.003. INSPECTION BY THIRD-PARTY INSPECTOR;
ADMINISTRATIVE PENALTY. (a) On or before the 10th [30th] day after
the date the commission receives a request, the commission shall
appoint the next available third-party inspector from the
applicable lists of third-party inspectors maintained by the
commission under Subsection (d) [(c)]. If, in accordance with
guidelines adopted under Section 428.0011, the executive director
determines the circumstances involved in a request constitute an
emergency, the executive director may assign a state inspector or
other commission employee that the executive director determines is
qualified to conduct the inspection and issue a recommendation in
accordance with the requirements for inspections and
recommendations by a third-party inspector.
(b) The commission shall establish rules and regulations
that require [allow the homeowner and the builder to each have the
right to strike the appointment of] a third-party inspector to
decline an appointment and disclose to the commission that a
conflict of interest exists if the third-party inspector:
(1) is employed by or participates in the management
of a business entity or other organization owned by or receiving
money from the interested homeowner or builder;
(2) owns or controls, directly or indirectly, more
than a 10 percent interest in a business entity or other
organization owned by or receiving money from the interested
homeowner or builder; or
(3) uses or receives a substantial amount of goods,
services, or money from the interested homeowner or builder [one
time for each request submitted].
(c) The commission may impose an administrative penalty on
or remove from the list of available third-party inspectors a
third-party inspector who knowingly fails to decline an appointment
and disclose a conflict of interest in accordance with Subsection
(b).
(d) The commission shall adopt rules that allow for the
commission to maintain a list of available third-party inspectors
for the various regions of the state, as required to satisfy the
provisions of this title.
SECTION 66. Section 428.004, Property Code, is amended by
amending Subsections (b) and (c) and adding Subsections (g), (h),
and (i) to read as follows:
(b) If the dispute involves a structural matter in the home,
the commission shall appoint a [an approved engineer to be the]
third-party inspector qualified under Section 427.001 to inspect
for structural defects. The third-party inspector shall inspect
the home not later than the 30th day after the date the request is
submitted and issue a recommendation not later than the 45th [60th]
day after the date the third-party inspector receives the
assignment from the commission, unless additional time is requested
by the third-party inspector or a party to the dispute. The
commission shall adopt rules governing the extension of time under
this subsection.
(c) The third-party inspector's recommendation must[:
[(1) address only the construction defect, based on
the applicable warranty and building and performance standards; and
[(2)] designate a method or manner of repair, if any.
At the option of the third-party inspector, the recommendation may
identify any construction defects discovered by the third-party
inspector that are not included in the request for inspection that
involve a violation of any applicable building and performance
standard that if left unrepaired may threaten the health or safety
of the occupants of the home or that involve a violation of a
building code applicable to the construction. A third-party
inspector has no duty to inspect the home for construction defects
that are not included in the request for inspection.
(g) A final report made available to the public on the
commission's Internet website may not include the name of the
homeowner and must indicate whether the builder offered to make
repairs as recommended by the final report or otherwise resolved
the dispute with the homeowner.
(h) A final report made available to the public on the
commission's Internet website may not include the name or street
address of the homeowner and must indicate:
(1) whether the builder has resolved the dispute with
the homeowner by:
(A) making repairs substantially equivalent to
those required by the findings of the final report confirming the
defect, as confirmed by the homeowner and a third-party inspector
who has inspected the repairs; or
(B) has otherwise resolved the dispute with the
homeowner; or
(2) whether the builder has not resolved the dispute
with the homeowner. If the builder has not resolved the dispute
with the homeowner, the report shall indicate whether the builder
offered to make repairs as recommended by the final report.
(i) All final reports and all information contained therein
are public records.
SECTION 67. Chapter 428, Property Code, is amended by
adding Sections 428.0041 and 428.006 to read as follows:
Sec. 428.0041. INSPECTION OF CONSTRUCTION DEFECT OR REPAIR;
TIME FOR COMPLETION OF CERTAIN REPAIRS. (a) A builder who, for the
purposes of Section 27.004(l) or otherwise, completes repairs of a
construction defect shall, at the builder's expense, engage an
inspector to inspect the repairs and determine whether the home, as
repaired, complies with the applicable limited statutory warranty
and building and performance standards adopted by the commission.
The builder shall engage the third-party inspector who issued a
recommendation regarding the construction defect to perform the
inspection unless otherwise provided by commission rules adopted
under this section.
(b) An inspection of repairs under Subsection (a), other
than minor cosmetic repairs described by Subsection (c), must be
completed not later than:
(1) the 30th day after the date the repairs are
completed for a dispute involving workmanship and materials; and
(2) the 45th day after the date the repairs are
completed for a dispute that involves a structural matter.
(c) The builder is entitled to a reasonable period not to
exceed 15 days to address minor cosmetic items that are necessary to
fully complete the repairs.
(d) The commission may for good cause require that:
(1) an alleged construction defect that has been
inspected by a third-party inspector be inspected again by another
third-party inspector or a state inspector or other commission
employee; or
(2) a builder's repair of a construction defect be
inspected by a third-party inspector or a state inspector or other
commission employee, regardless of whether the repair is inspected
for the purposes of Subsection (a) by the third-party inspector who
issued a recommendation regarding the construction defect or by a
state inspector.
(e) The commission may charge the builder a fee for an
inspection conducted under Subsection (d).
(f) A homeowner may refuse an inspection under this section.
Sec. 428.006. BUILDER REPORTING REQUIRED. (a) A builder
involved in the inspection process or mediation under this subtitle
shall file with the commission, on a form prescribed by the
commission, information relating to any activity related to the
dispute, including a settlement, repair effort, mediation,
arbitration, or litigation, that occurs after:
(1) a third-party inspector's report issued under this
chapter becomes final and nonappealable; or
(2) mediation is requested under Section 428A.004.
(b) A builder shall file a form not later than the 21st day
after the report becomes final and nonappealable or the builder
receives a request for mediation under Section 428A.004.
(c) In addition to any other information the commission
determines is appropriate to request, the form prescribed under
this section must request the following information:
(1) the name of the builder;
(2) the name and address of the homeowner and the
property involved in the inspection process or mediation;
(3) any inspection or other request number assigned by
the commission;
(4) whether any repairs or other types of compensation
were offered by the builder to the homeowner for any construction
defects affirmed by a final, nonappealable report;
(5) if repairs were offered by the builder:
(A) whether any alleged defects affirmed by a
final, nonappealable report were excluded from the offer of repair;
and
(B) whether the homeowner accepted any or all of
the repairs offered;
(6) if repairs were offered and accepted:
(A) whether the repairs were made; and
(B) whether the repairs resulted in the
satisfaction of all issues between the parties as a result of the
residential construction project;
(7) if repairs were made, whether the builder engaged
the services of the third-party inspector who performed the
inspection under this subtitle to inspect the repairs;
(8) if repairs were not offered or an offer for repair
was not accepted, whether either of the parties pursued any further
legal proceedings related to the dispute between the parties;
(9) if either party has pursued further legal
proceedings, whether the parties are in mediation or involved in
arbitration or a civil lawsuit; and
(10) if the parties are involved in an arbitration
proceeding, whether the arbitration is required as a provision of a
contract between the parties.
(d) If the parties have not resolved their dispute at the
time the builder files the initial form under Subsection (b), the
builder must update the status of the information requested or
provided on the form not later than the 21st day after the
occurrence of one of the following events:
(1) repairs offered by the builder are accepted and
performed and, once performed, reinspected in accordance with
Sections 27.004(l) and 428.0041 and accepted by the homeowner as
resolving all issues in the dispute;
(2) any legal proceedings described by Subsection
(c)(9) are final;
(3) the builder repurchases the home under Section
27.0042; or
(4) any other resolution of the dispute between the
parties is finalized.
(e) A builder's failure to comply with this section or to
complete the required form honestly is grounds for denial of the
builder's license renewal application under Chapter 416.
SECTION 68. Subtitle D, Title 16, Property Code, is amended
by adding Chapter 428A to read as follows:
CHAPTER 428A. OFFICE OF OMBUDSMAN; VOLUNTARY MEDIATION
Sec. 428A.001. OFFICE OF OMBUDSMAN. The office of the
ombudsman is established at the commission to assist the
commission, builders, and homeowners following the completion of
the state inspection process and to engage in other activities as
provided by this chapter.
Sec. 428A.002. QUALIFICATIONS. The commission shall hire a
licensed attorney to act as ombudsman.
Sec. 428A.003. POWERS AND DUTIES. (a) The ombudsman shall:
(1) provide information and, subject to Subsection
(b), advice to homeowners and builders engaged in defect repairs
after the completion of the state inspection process to assist them
in understanding the post-inspection process;
(2) assist homeowners and builders in locating
mediation services, if requested, for the purposes of Section
428A.004; and
(3) submit comments to the commission on rules and
other policy changes being considered by the commission.
(b) The ombudsman may not provide legal advice to homeowners
and builders.
(c) The ombudsman shall report directly to the commission.
Sec. 428A.004. VOLUNTARY MEDIATION. (a) The commission by
rule shall establish procedures for a builder and homeowner to
engage in a third-party mediation, as described by Section 154.023,
Civil Practice and Remedies Code, performed by a third-party
mediator not employed by the commission, of a dispute involving a
construction defect as an alternative to the inspection process
under this subtitle, if the homeowner, before the expiration of the
time to submit a request for inspection under Section 426.006, and
before a third-party inspection has been performed, submits a
statement to the commission and the builder, in the form prescribed
by the commission, that the homeowner is requesting mediation as an
alternative to the state inspection process. If a homeowner
requests mediation under this section, a builder is required to
participate in mediation in good faith, as determined by the
mediator. The mediation must be completed on or before the
expiration of the mediation period prescribed by Subsection (c)
and, unless otherwise agreed by the parties, be conducted in the
county in which the home is located.
(b) Notwithstanding any other law, if the homeowner
requests mediation under this section, an action described by
Section 426.005(a):
(1) may not be filed before the expiration of the
mediation period unless an agreement is executed as a result of the
mediation that is breached before the end of the mediation period;
and
(2) must be filed on or before the later of:
(A) the expiration of any applicable statute of
limitations; or
(B) the 45th day after the earlier of:
(i) the expiration of the mediation period;
or
(ii) the execution of an agreement as a
result of the mediation.
(c) For the purposes of this section, the mediation period
expires on the 90th day after the date the homeowner submits a
statement of intent to engage in mediation under this section. A
homeowner or builder may, in accordance with Subsection (b), file
an action described by Section 426.005(a) if no agreement is
reached before the expiration of the mediation period.
(d) A builder's failure to comply with an agreement executed
by the parties as a result of a mediation under this section is
grounds for disciplinary action under Chapter 418, including the
imposition of an administrative penalty under Chapter 419.
(e) The parties to a mediation under this section shall
split the fees of the third-party mediator equally.
(f) For purposes of Chapter 27, good faith participation in
mediation under this section, as determined by the mediator, for
the mediation period established by this section constitutes a
final, nonappealable determination under this subtitle and
completion of the state inspection process, and a written agreement
to mediate submitted by the parties under this section constitutes
a request under Section 428.001. For the purposes of Section
27.004(l), if the builder makes a repair pursuant to an offer under
Section 27.004(b), the builder may engage any third-party inspector
to inspect the repair and determine whether the residence, as
repaired, complies with the applicable limited statutory warranty
and building and performance standards.
SECTION 69. Sections 430.001(b), (d), and (e), Property
Code, are amended to read as follows:
(b) The warranty periods shall be:
(1) two years [one year] for workmanship and
materials;
(2) two years for plumbing, electrical, heating, and
air-conditioning delivery systems; and
(3) 10 years for major structural components of the
home.
(d) The International Residential Code for One- and
Two-Family Dwellings that applies to nonelectrical aspects of
residential construction for the purposes of the limited statutory
warranties and building and performance standards adopted under
this section is:
(1) for residential construction located in a
municipality or the extraterritorial jurisdiction of a
municipality, the version of the International Residential Code
applicable to nonelectrical aspects of residential construction in
the municipality under Section 214.212, Local Government Code; and
(2) for residential construction located in an
unincorporated area not in the extraterritorial jurisdiction of a
municipality, the version of the International Residential Code
adopted by the commission by rule [applicable to nonelectrical
aspects of residential construction in the municipality that is the
county seat of the county in which the construction is located; and
[(3) for residential construction located in an
unincorporated area in a county that does not contain an
incorporated area, the version of the International Residential
Code that existed on May 1, 2001].
(e) The National Electrical Code for One- and Two-Family
Dwellings that applies to electrical aspects of residential
construction for the purposes of this section is:
(1) for residential construction located in a
municipality or the extraterritorial jurisdiction of a
municipality, the version of the National Electrical Code
applicable to electrical aspects of residential construction in the
municipality under Section 214.214, Local Government Code; and
(2) for residential construction located in an
unincorporated area not in the extraterritorial jurisdiction of a
municipality, the version of the National Electrical Code adopted
by the commission by rule [applicable to electrical aspects of
residential construction in the municipality that is the county
seat of the county in which the construction is located; and
[(3) for residential construction located in an
unincorporated area in a county that does not contain an
incorporated area, the version of the National Electrical Code that
existed on May 1, 2001].
SECTION 70. Section 430.001, Property Code, is amended by
adding Subsection (b-1) to read as follows:
(b-1) A builder shall assign to the homeowner, without
recourse, the manufacturer's warranty for all manufactured
products that are covered by a manufacturer's warranty. Any rights
that inure to the homeowner provided under a manufacturer's
warranty are the obligation of the manufacturer. The builder does
not assume any of the obligations of the manufacturer resulting
from a manufacturer's warranty, but shall coordinate with the
manufacturer, suppliers, or agents to achieve compliance with the
performance standard. If the manufacturer does not comply with the
manufacturer's warranty within a reasonable period of time, the
builder shall make the affected condition comply with the
performance standard and shall be subrogated to the homeowner's
claims against the manufacturer.
SECTION 71. Sections 430.005(b) and (c), Property Code, are
amended to read as follows:
(b) This section does not exempt a builder in an area
described by Subsection (a) from the builder licensing and home
registration requirements imposed by this title, including the
requirements of Sections 416.001 and 426.003.
(c) An allegation of a postconstruction defect in a
construction project in an area described by Subsection (a) is
subject to the state [state-sponsored] inspection program [and
dispute resolution process] described by this subtitle.
SECTION 72. Chapter 430, Property Code, is amended by
adding Sections 430.012 and 430.013 to read as follows:
Sec. 430.012. HOMEOWNER INFORMATION PAMPHLET. (a) The
commission shall produce a homeowner information pamphlet to
provide homeowners with basic information about the commission and
the state inspection program.
(b) The pamphlet must include information describing:
(1) the commission's jurisdiction;
(2) the state inspection program;
(3) statutory warranties;
(4) building and performance standards; and
(5) how the items listed in Subdivisions (1) through
(4) apply to a new or newly remodeled home.
(c) The commission shall make the pamphlet available
through the commission's Internet website and in a hard-copy
format.
(d) An escrow officer, as defined by Section 2501.003,
Insurance Code, or an attorney performing closing services in which
title insurance is not obtained, at a closing in which title to a
new home is transferred shall provide the pamphlet produced by the
commission under Subsection (a) to the person purchasing the new
home.
(e) The commission shall provide the pamphlet to a homeowner
after registration of the home under Section 426.003(b).
Sec. 430.013. WARRANTIES AND PERFORMANCE STANDARDS
ADVISORY COMMITTEE. (a) The commission shall appoint a Warranties
and Performance Standards Advisory Committee.
(b) The committee may:
(1) regularly review and evaluate the residential
construction performance standards adopted by the commission;
(2) review and evaluate proposed changes to the
performance standards made either by the public or internally by
the commission; and
(3) make recommendations to the commission.
(c) The commission by rule shall establish:
(1) the number of committee members;
(2) qualifications for appointment to the committee;
(3) the terms of service of committee members; and
(4) the duties and operating procedures of the
committee.
(d) A member of the committee serves at the will of the
commission.
(e) A member is not entitled to compensation for service on
the committee but is entitled to reimbursement for reasonable
travel expenses the member incurs in performing committee duties.
SECTION 73. Section 446.004, Property Code, is amended to
read as follows:
Sec. 446.004. FEE INSPECTOR. A fee inspector must be either
a licensed engineer, a registered architect, a professional
inspector licensed by the Texas Real Estate Commission, a plumbing
inspector employed by a municipality and licensed by the Texas
State Board of Plumbing Examiners, a building inspector employed by
a political subdivision, or a third-party inspector qualified under
Section 427.001(b). A builder may use the same or a different fee
inspector for inspections required under this chapter.
SECTION 74. Section 59.011(a), Finance Code, is amended to
read as follows:
(a) For purposes of Chapter 27, Property Code, and Title 16,
Property Code, a federally insured financial institution, or a
subsidiary or affiliate of the institution, regulated under this
code is not a builder.
SECTION 75. The following provisions of the Property Code
are repealed:
(1) Section 5.016, as added by Chapter 843, Acts of the
80th Legislature, Regular Session, 2007;
(2) Section 401.002(12);
(3) Section 416.012(b);
(4) Section 418.002(d);
(5) Sections 426.004(b) and (c);
(6) Section 428.001(c); and
(7) Sections 428.004(d) and (e).
SECTION 76. The Sunset Advisory Commission's report to the
84th Legislature shall evaluate:
(1) the Texas Residential Construction Commission's
overall performance; and
(2) the ability of the Texas Residential Construction
Commission to implement the changes in law made by this Act and
management actions recommended by the 81st Legislature.
SECTION 77. Promptly after this Act takes effect, the
governor shall appoint the two additional members to the Texas
Residential Construction Commission as required by Section
406.001, Property Code, as amended by this Act. In appointing those
members, the governor shall appoint one person to a term expiring
February 1, 2011, and one to a term expiring February 1, 2013.
SECTION 78. The Texas Residential Construction Commission
shall adopt rules as required by Chapter 416, Property Code, as
amended by this Act, not later than December 1, 2009. A person is
not required to hold a license under Section 401.005(c) or Chapter
416, Property Code, as amended by this Act, until January 1, 2010.
SECTION 79. Not later than December 1, 2009, the Texas
Residential Construction Commission shall adopt rules and
prescribe forms under Sections 428.0011 and 428.006, Property Code,
as added by this Act.
SECTION 80. Not later than December 1, 2009, the Texas
Residential Construction Commission shall hire an ombudsman as
provided by Chapter 428A, Property Code, as added by this Act.
SECTION 81. Not later than December 1, 2009, the Texas
Residential Construction Commission shall adopt statutory
warranties and building and performance standards under Section
430.001, Property Code, as amended by this Act. Except as provided
by this section, the warranties and building and performance
standards adopted by the commission under this section apply only
to residential construction commenced on or after January 1, 2010.
Residential construction commenced before January 1, 2010, or
commenced on or after January 1, 2010, under a contract entered into
before that date, is governed by the statutory warranties and
building and performance standards applicable to the construction
immediately before the adoption of the statutory warranties and
building and performance standards under this section.
SECTION 82. (a) The terms of the current members of the
Warranties and Performance Standards Advisory Committee expire on
the date on which the new Warranties and Performance Standards
Advisory Committee is appointed under Section 430.013, Property
Code, as added by this Act.
(b) The changes in law made by Section 430.013, Property
Code, as added by this Act, to the compensation of the members of
the Warranties and Performance Standards Advisory Committee apply
only to members appointed on or after the effective date of this
Act.
SECTION 83. (a) Section 401.005, Property Code, as amended
by this Act, applies only to a home, material improvement to a home,
or improvement to the interior of a home, the building or remodeling
of which commences on or after the effective date of this Act. A
home, material improvement to a home, or improvement to the
interior of a home described by Section 401.005, Property Code, as
amended by this Act, the building or remodeling of which is
commenced before the effective date of this Act is subject to the
warranty obligation applicable to the home, material improvement to
the home, or improvement to the interior of the home immediately
before the effective date of this Act.
(b) Section 401.007, Property Code, as amended by this Act,
applies only to an order regarding an emergency or a violation of a
statute to which Chapter 401, Property Code, applies that occurs on
or after the effective date of this Act. An order regarding an
emergency or a violation of a statute that occurred before the
effective date of this Act is governed by the law in effect at the
time the emergency or violation occurred, and that law is continued
in effect for that purpose.
(c) Section 416.001, Property Code, as amended by this Act,
applies only to an offense committed on or after the effective date
of this Act. An offense committed before the effective date of this
Act is governed by the law in effect at the time the offense was
committed, and the former law is continued in effect for that
purpose. For the purposes of this section, an offense was committed
before the effective date of this Act if any element of the offense
occurred before that date.
(d) Section 416.005, Property Code, as amended by this Act,
applies only to a person licensed by the Texas Residential
Construction Commission as a builder for the first time on or after
January 1, 2010. A person registered with the commission as a
builder before January 1, 2010, is governed by the law in effect at
the time the person registered, and that law is continued in effect
for that purpose.
(e) Section 416.006(a), Property Code, as amended by this
Act, applies only to a license issued for the first time on or after
January 1, 2010. A certificate of registration issued before
January 1, 2010, is governed by the law in effect immediately before
the effective date of this Act, and that law is continued in effect
for that purpose.
(f) Sections 416.012(c) and (e), Property Code, as amended
by this Act, and the repeal by this Act of Section 416.012(b),
Property Code, apply only to a renewal of a license by a builder on
or after September 1, 2011. The renewal of a license by a builder
before September 1, 2011, is governed by the law in effect
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
(g) Sections 418.001 and 418.002, Property Code, as amended
by this Act, apply only to a ground for disciplinary action that
occurs on or after the effective date of this Act. A ground for
disciplinary action that occurs before the effective date of this
Act is governed by the law in effect at the time the ground for
disciplinary action occurred, and that law is continued in effect
for that purpose.
(h) Section 420.006, Property Code, as added by this Act,
applies only to a contract entered into or a transfer of title made
on or after the effective date of this Act. A contract entered into
or a transfer of title made before the effective date of this Act is
governed by the law in effect immediately before the effective date
of this Act, and that law is continued in effect for that purpose.
(i) Section 426.003, Property Code, as amended by this Act,
applies only to a registration of a home that occurs on or after the
effective date of this Act. A registration of a home that occurs
before the effective date of this Act is governed by the law in
effect immediately before the effective date of this Act, and that
law is continued in effect for that purpose.
(j) Sections 408.002, 426.004, 426.005, 428.002, 428.003,
and 428.004, Property Code, as amended by this Act, apply only to a
request for a state inspection filed on or after the effective date
of this Act. A request filed before the effective date of this Act
is governed by the law in effect immediately before the effective
date of this Act, and that law is continued in effect for that
purpose.
(k) Section 27.004(l), Property Code, as amended by this
Act, and Section 428.0041(a), Property Code, as added by this Act,
apply only to inspection of a repair completed by a builder on or
after the effective date of this Act. Inspection of a repair
completed by a builder before the effective date of this Act is
governed by the law in effect immediately before the effective date
of this Act, and that law is continued in effect for that purpose.
SECTION 84 .The Texas Residential Construction Commission
shall adopt contract forms as required by Section 420.004, Property
Code, as added by this Act, not later than January 1, 2010. A
builder is not required to use a form adopted under Section 420.004,
Property Code, as added by this Act, before the 91st day after the
date on which the forms are adopted under that section.
SECTION 85. Section 420.005, Property Code, as added by
this Act, applies only to a contract executed by a builder and a
buyer as described by Section 420.005, Property Code, as added by
this Act, on or after the effective date of this Act. A contract
executed before the effective date of this Act is covered by the law
in effect when the contract was executed, and the former law is
continued in effect for that purpose.
SECTION 86. This Act takes effect September 1, 2009.