Texas 2009 - 81st Regular

Texas House Bill HB2695 Compare Versions

Only one version of the bill is available at this time.

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1	1	81R5083 UM-D
2	2	By: Gattis H.B. No. 2695
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the abolition of the Texas Residential Construction
8	8	Commission.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. (a) The Texas Residential Construction
11	11	Commission is abolished effective February 1, 2010.
12	12	(b) The following statutes are repealed:
13	13	(1) Section 214.906, Local Government Code;
14	14	(2) Title 16, Property Code;
15	15	(3) Section 5.016, Property Code, as added by Section
16	16	1, Chapter 843 (H.B. 1038), Acts of the 80th Legislature, Regular
17	17	Session, 2007; and
18	18	(4) Sections 27.001(3) and (9), 27.004(l), and
19	19	27.007(c), Property Code.
20	20	SECTION 2. (a) The Texas Facilities Commission shall take
21	21	custody of the property, records, or other assets of the Texas
22	22	Residential Construction Commission unless the governor designates
23	23	another appropriate governmental entity to take custody of the
24	24	property, records, or other assets.
25	25	(b) If the Texas Residential Construction Commission has a
26	26	continuing valid and enforceable obligation, including bonded
27	27	indebtedness, Section 325.017(f), Government Code, applies in
28	28	relation to the continuing obligation of the commission.
29	29	SECTION 3. Sections 59.011(a) and (c), Finance Code, are
30	30	amended to read as follows:
31	31	(a) For purposes of Chapter 27, Property Code, [and Title
32	32	16, Property Code,] a federally insured financial institution
33	33	regulated under this code is not a builder.
34	34	(c) A builder hired by a lender to complete the construction
35	35	of a foreclosed home is not liable for any construction defects of
36	36	which the builder had no knowledge that existed prior to the
37	37	acquisition of the home by the lender, but the builder is subject to
38	38	Chapter 27, Property Code, [and Title 16, Property Code,] for work
39	39	performed for the lender subsequent to the acquisition of the home
40	40	by the lender.
41	41	SECTION 4. Sections 27.001(4), (5), and (8), Property Code,
42	42	are amended to read as follows:
43	43	(4) "Construction defect" [has the meaning assigned by
44	44	Section 401.004 for an action to which Subtitle D, Title 16, applies
45	45	and for any other action] means a matter concerning the design,
46	46	construction, or repair of a new residence, of an alteration of or
47	47	repair or addition to an existing residence, or of an appurtenance
48	48	to a residence, on which a person has a complaint against a
49	49	contractor. The term may include any physical damage to the
50	50	residence, any appurtenance, or the real property on which the
51	51	residence and appurtenance are affixed proximately caused by a
52	52	construction defect.
53	53	(5) "Contractor":
54	54	(A) means:
55	55	(i) a person [builder, as defined by
56	56	Section 401.003,] contracting with an owner for the construction or
57	57	repair of a new residence, for the repair or alteration of or an
58	58	addition to an existing residence, or for the construction, sale,
59	59	alteration, addition, or repair of an appurtenance to a new or
60	60	existing residence;
61	61	(ii) any person contracting with a
62	62	purchaser for the sale of a new residence constructed by or on
63	63	behalf of that person; or
64	64	(iii) a person contracting with an owner or
65	65	the developer of a condominium for the construction of a new
66	66	residence, for an alteration of or an addition to an existing
67	67	residence, for repair of a new or existing residence, or for the
68	68	construction, sale, alteration, addition, or repair of an
69	69	appurtenance to a new or existing residence; and
70	70	(B) includes:
71	71	(i) an owner, officer, director,
72	72	shareholder, partner, or employee of the contractor; and
73	73	(ii) a risk retention group registered
74	74	under Chapter 2201 [Article 21.54], Insurance Code, that insures
75	75	all or any part of a contractor's liability for the cost to repair a
76	76	residential construction defect.
77	77	(8) "Structural failure" [has the meaning assigned by
78	78	Section 401.002 for an action to which Subtitle D, Title 16, applies
79	79	and for any other action] means actual physical damage to the
80	80	load-bearing portion of a residence caused by a failure of the
81	81	load-bearing portion.
82	82	SECTION 5. Chapter 27, Property Code, is amended by adding
83	83	Section 27.0021 to read as follows:
84	84	Sec. 27.0021. CERTAIN COMMON LAW ACTIONS REESTABLISHED.
85	85	Subject to Section 27.002(b), a cause of action that existed at
86	86	common law before the enactment of former Title 16, repealed by the
87	87	81st Legislature, Regular Session, 2009, that would have been
88	88	barred by that title at any time before its repeal is reestablished.
89	89	SECTION 6. Section 27.002(b), Property Code, is amended to
90	90	read as follows:
91	91	(b) To [Except as provided by this subsection, to] the
92	92	extent of conflict between this chapter and any other law,
93	93	including the Deceptive Trade Practices-Consumer Protection Act
94	94	(Subchapter E, Chapter 17, Business & Commerce Code) or a common law
95	95	cause of action, this chapter prevails. [To the extent of conflict
96	96	between this chapter and Title 16, Title 16 prevails.]
97	97	SECTION 7. Section 27.003(a), Property Code, is amended to
98	98	read as follows:
99	99	(a) In an action to recover damages or other relief arising
100	100	from a construction defect:
101	101	(1) a contractor is not liable for any percentage of
102	102	damages caused by:
103	103	(A) negligence of a person other than the
104	104	contractor or an agent, employee, or subcontractor of the
105	105	contractor;
106	106	(B) failure of a person other than the contractor
107	107	or an agent, employee, or subcontractor of the contractor to:
108	108	(i) take reasonable action to mitigate the
109	109	damages; or
110	110	(ii) take reasonable action to maintain the
111	111	residence;
112	112	(C) normal wear, tear, or deterioration;
113	113	(D) normal shrinkage due to drying or settlement
114	114	of construction components within the tolerance of building
115	115	standards; or
116	116	(E) the contractor's reliance on written
117	117	information relating to the residence, appurtenance, or real
118	118	property on which the residence and appurtenance are affixed that
119	119	was obtained from official government records, if the written
120	120	information was false or inaccurate and the contractor did not know
121	121	and could not reasonably have known of the falsity or inaccuracy of
122	122	the information; and
123	123	(2) if an assignee of the claimant or a person
124	124	subrogated to the rights of a claimant fails to provide the
125	125	contractor with the written notice and opportunity to inspect and
126	126	offer to repair required by Section 27.004 [or fails to request
127	127	state-sponsored inspection and dispute resolution under Chapter
128	128	428, if applicable,] before performing repairs, the contractor is
129	129	not liable for the cost of any repairs or any percentage of damages
130	130	caused by repairs made to a construction defect at the request of an
131	131	assignee of the claimant or a person subrogated to the rights of a
132	132	claimant by a person other than the contractor or an agent,
133	133	employee, or subcontractor of the contractor.
134	134	SECTION 8. Sections 27.004(a), (b), (c), and (d), Property
135	135	Code, are amended to read as follows:
136	136	(a) Before [In a claim not subject to Subtitle D, Title 16,
137	137	before] the 60th day preceding the date a claimant seeking from a
138	138	contractor damages or other relief arising from a construction
139	139	defect initiates an action, the claimant shall give written notice
140	140	by certified mail, return receipt requested, to the contractor, at
141	141	the contractor's last known address, specifying in reasonable
142	142	detail the construction defects that are the subject of the
143	143	complaint. On the request of the contractor, the claimant shall
144	144	provide to the contractor any evidence that depicts the nature and
145	145	cause of the defect and the nature and extent of repairs necessary
146	146	to remedy the defect, including expert reports, photographs, and
147	147	videotapes, if that evidence would be discoverable under Rule 192,
148	148	Texas Rules of Civil Procedure. During the 35-day period after the
149	149	date the contractor receives the notice, and on the contractor's
150	150	written request, the contractor shall be given a reasonable
151	151	opportunity to inspect and have inspected the property that is the
152	152	subject of the complaint to determine the nature and cause of the
153	153	defect and the nature and extent of repairs necessary to remedy the
154	154	defect. The contractor may take reasonable steps to document the
155	155	defect. [In a claim subject to Subtitle D, Title 16, a contractor
156	156	is entitled to make an offer of repair in accordance with Subsection
157	157	(b). A claimant is not required to give written notice to a
158	158	contractor under this subsection in a claim subject to Subtitle D,
159	159	Title 16.]
160	160	(b) Not [later than the 15th day after the date of a final,
161	161	unappealable determination of a dispute under Subtitle D, Title 16,
162	162	if applicable, or not] later than the 45th day after the date the
163	163	contractor receives the notice [under this section, if Subtitle D,
164	164	Title 16, does not apply], the contractor may make a written offer
165	165	of settlement to the claimant. The offer must be sent to the
166	166	claimant at the claimant's last known address or to the claimant's
167	167	attorney by certified mail, return receipt requested. The offer
168	168	may include either an agreement by the contractor to repair or to
169	169	have repaired by an independent contractor partially or totally at
170	170	the contractor's expense or at a reduced rate to the claimant any
171	171	construction defect described in the notice and shall describe in
172	172	reasonable detail the kind of repairs which will be made. The
173	173	repairs shall be made not later than the 45th day after the date the
174	174	contractor receives written notice of acceptance of the settlement
175	175	offer, unless completion is delayed by the claimant or by other
176	176	events beyond the control of the contractor. If a contractor makes
177	177	a written offer of settlement that the claimant considers to be
178	178	unreasonable:
179	179	(1) on or before the 25th day after the date the
180	180	claimant receives the offer, the claimant shall advise the
181	181	contractor in writing and in reasonable detail of the reasons why
182	182	the claimant considers the offer unreasonable; and
183	183	(2) not later than the 10th day after the date the
184	184	contractor receives notice under Subdivision (1), the contractor
185	185	may make a supplemental written offer of settlement to the claimant
186	186	by sending the offer to the claimant or the claimant's attorney.
187	187	(c) If [compliance with Subtitle D, Title 16, or] the giving
188	188	of the notice under Subsections (a) and (b) within the period
189	189	prescribed by those subsections is impracticable because of the
190	190	necessity of initiating an action at an earlier date to prevent
191	191	expiration of the statute of limitations or if the complaint is
192	192	asserted as a counterclaim, [compliance with Subtitle D, Title 16,
193	193	or] the notice is not required. However, the action or counterclaim
194	194	shall specify in reasonable detail each construction defect that is
195	195	the subject of the complaint. The [If Subtitle D, Title 16, applies
196	196	to the complaint, simultaneously with the filing of an action by a
197	197	claimant, the claimant must submit a request under Section 428.001.
198	198	If Subtitle D, Title 16, does not apply, the] inspection provided
199	199	for by Subsection (a) may be made not later than the 75th day after
200	200	the date of service of the suit, request for arbitration, or
201	201	counterclaim on the contractor, and the offer provided for by
202	202	Subsection (b) may be made [not later than the 15th day after the
203	203	date the state-sponsored inspection and dispute resolution process
204	204	is completed, if Subtitle D, Title 16, applies, or] not later than
205	205	the 60th day after the date of service [, if Subtitle D, Title 16,
206	206	does not apply]. If, while an action subject to this chapter is
207	207	pending, the statute of limitations for the cause of action would
208	208	have expired and it is determined that the provisions of Subsection
209	209	(a) were not properly followed, the action shall be abated to allow
210	210	compliance with Subsections (a) and (b).
211	211	(d) The court or arbitration tribunal shall abate an action
212	212	governed by this chapter if Subsection (c) does not apply and the
213	213	court or tribunal, after a hearing, finds that the contractor is
214	214	entitled to abatement because the claimant failed to [comply with
215	215	the requirements of Subtitle D, Title 16, if applicable, failed to]
216	216	provide the notice or failed to give the contractor a reasonable
217	217	opportunity to inspect the property as required by Subsection (a),
218	218	or failed to follow the procedures specified by Subsection (b). An
219	219	action is automatically abated without the order of the court or
220	220	tribunal beginning on the 11th day after the date a motion to abate
221	221	is filed if the motion:
222	222	(1) is verified and alleges that the person against
223	223	whom the action is pending did not receive the written notice
224	224	required by Subsection (a), the person against whom the action is
225	225	pending was not given a reasonable opportunity to inspect the
226	226	property as required by Subsection (a), or the claimant failed to
227	227	follow the procedures specified by Subsection (b) [or Subtitle D,
228	228	Title 16]; and
229	229	(2) is not controverted by an affidavit filed by the
230	230	claimant before the 11th day after the date on which the motion to
231	231	abate is filed.
232	232	SECTION 9. Section 27.0042(b), Property Code, is amended to
233	233	read as follows:
234	234	(b) A contractor may not elect to purchase the residence
235	235	under Subsection (a) if [:
236	236	[(1)] the residence is more than five years old at the
237	237	time an action is initiated [; or
238	238	[(2) the contractor makes such an election later than
239	239	the 15th day after the date of a final, unappealable determination
240	240	of a dispute under Subtitle D, Title 16, if applicable].
241	241	SECTION 10. Section 41.007(a), Property Code, is amended to
242	242	read as follows:
243	243	(a) A contract for improvements to an existing residence
244	244	described by Section 41.001(b)(3) must contain[:
245	245	[(1) the contractor's certificate of registration
246	246	number from the Texas Residential Construction Commission if the
247	247	contractor is required to register as a builder with the
248	248	commission;
249	249	[(2) the address and telephone number at which the
250	250	owner may file a complaint with the Texas Residential Construction
251	251	Commission about the conduct of the contractor if the contractor is
252	252	required to register as a builder with the commission; and
253	253	[(3)] the following warning conspicuously printed,
254	254	stamped, or typed in a size equal to at least 10-point bold type or
255	255	computer equivalent:
256	256	"IMPORTANT NOTICE: You and your contractor are responsible
257	257	for meeting the terms and conditions of this contract. If you sign
258	258	this contract and you fail to meet the terms and conditions of this
259	259	contract, you may lose your legal ownership rights in your
260	260	home. KNOW YOUR RIGHTS AND DUTIES UNDER THE LAW."
261	261	SECTION 11. (a) The repeal by this Act of Section 5.016,
262	262	Property Code, as added by Section 1, Chapter 843 (H.B. 1038), Acts
263	263	of the 80th Legislature, Regular Session, 2007, applies only to a
264	264	transfer of residential property that occurs on or after the
265	265	effective date of this Act. A transfer of residential property that
266	266	occurs before the effective date of this Act is governed by the law
267	267	in effect immediately before the effective date of this Act, and
268	268	that law is continued in effect for that purpose.
269	269	(b) Section 27.0021, Property Code, as added by this Act,
270	270	and the repeal by this Act of Section 401.005(c), Property Code,
271	271	apply only to a home or material improvement to a home described by
272	272	Section 401.005(c), Property Code, repealed by this Act, the
273	273	building or remodeling of which commences on or after the effective
274	274	date of this Act. A home or material improvement to a home
275	275	described by Section 401.005(c), Property Code, repealed by this
276	276	Act, the building or remodeling of which is commenced before the
277	277	effective date of this Act is subject to the warranty obligation
278	278	applicable to the home or material improvement to the home
279	279	immediately before the effective date of this Act, and is not
280	280	subject to a cause of action under Section 27.0021, Property Code,
281	281	as added by this Act.
282	282	(c) The repeal by this Act of Sections 420.002 and 420.003,
283	283	Property Code, applies only to a contract for the construction of a
284	284	new home or the improvement of an existing home that is entered into
285	285	on or after the effective date of this Act. A contract for the
286	286	construction of a new home or the improvement of an existing home
287	287	that is entered into before the effective date of this Act is
288	288	governed by the law as it existed immediately before the effective
289	289	date of this Act, and that law is continued in effect for that
290	290	purpose.
291	291	(d) Except as provided by this section, the change in law
292	292	made by this Act to Chapter 27, Property Code, and the repeal by
293	293	this Act of Sections 426.005, 426.007, and 426.008, Property Code,
294	294	apply only to an action commenced on or after the effective date of
295	295	this Act. An action commenced before the effective date of this Act
296	296	or with respect to which a request was filed under Section 428.001,
297	297	Property Code, repealed by this Act, before the effective date of
298	298	this Act, is governed by the law in effect immediately before the
299	299	effective date of this Act, and that law is continued in effect for
300	300	that purpose.
301	301	(e) The change in law made by this Act to Section
302	302	27.003(a)(2), Property Code, applies only to a repair made on or
303	303	after the effective date of this Act. A repair made before the
304	304	effective date of this Act is subject to the law as it existed
305	305	immediately before the effective date of this Act, and that law is
306	306	continued in effect for that purpose.
307	307	(f) The repeal by this Act of Section 428.005, Property
308	308	Code, does not apply to the receipt by a builder of a notice
309	309	described by that section before the effective date of this Act.
310	310	The receipt by a builder of a notice described by that section
311	311	before the effective date of this Act is governed by the law in
312	312	effect immediately before that date, and that law is continued in
313	313	effect for that purpose.
314	314	(g) Except as provided by this subsection, Section 27.0021,
315	315	Property Code, as added by this Act, and the repeal by this Act of
316	316	Chapter 430, Property Code, apply only to residential construction
317	317	commenced on or after the effective date of this Act. Residential
318	318	construction commenced before the effective date of this Act or
319	319	residential construction commenced after the effective date of this
320	320	Act under a contract entered into before the effective date of this
321	321	Act is subject to the warranties and building and performance
322	322	standards applicable to the residential construction immediately
323	323	before the effective date of this Act, and is not subject to a cause
324	324	of action under Section 27.0021, Property Code, as added by this
325	325	Act.
326	326	(h) The repeal by this Act of Section 436.003, Property
327	327	Code, applies only to an arbitration initiated on or after the
328	328	effective date of this Act. An arbitration initiated before the
329	329	effective date of this Act is governed by the law applicable to the
330	330	arbitration immediately before the effective date of this Act, and
331	331	that law is continued in effect for that purpose.
332	332	(i) The repeal by this Act of Chapter 437, Property Code,
333	333	applies only to an arbitration award filed on or after the effective
334	334	date of this Act. An award filed before the effective date of this
335	335	Act is governed by the law in effect immediately before that date,
336	336	and that law is continued in effect for that purpose.
337	337	(j) The repeal by this Act of Chapter 438, Property Code,
338	338	applies only to an arbitration award issued on or after the
339	339	effective date of this Act. An award issued before the effective
340	340	date of this Act is governed by the law in effect immediately before
341	341	that date, and that law is continued in effect for that purpose.
342	342	SECTION 12. This Act takes effect September 1, 2009.