81R10162 AJA-F
By: Thompson H.B. No. 3182
A BILL TO BE ENTITLED
AN ACT
relating to consumer protection for and remedies available to a
homebuyer whose home does not comply with certain warranties;
providing an administrative penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 4, Property Code, is amended by adding
Chapter 30 to read as follows:
CHAPTER 30. TEXAS HOMEBUYER PROTECTION ACT
Sec. 30.001. SHORT TITLE. This chapter may be cited as the
Texas Homebuyer Protection Act.
Sec. 30.002. DEFINITIONS. In this chapter:
(1) "Administrator" means the administrator of the
Texas Real Estate Commission.
(2) "Commission" means the Texas Real Estate
Commission.
(3) "Contractor" means a person who, for compensation,
engages in the construction, remodeling, repair, modification, or
improvement of a building or a portion of a building used primarily
for residential purposes.
(4) "Defect" means a condition that prevents a home
from conforming to a contractor's warranty, including a warranty
described by Section 30.008(c) or any other warranty provided by
law.
(5) "Home" means a single-family house, duplex,
triplex, or quadruplex or a unit in a multiunit structure used for
residential purposes that is used or intended to be used as a
dwelling by one of the owners.
(6) "Homebuyer" means a person who:
(A) purchased a home from a contractor and is
entitled to enforce the terms of a contractor's warranty with
respect to the home;
(B) is a lessor or lessee, other than a
sublessee, who purchased or leased the home from a contractor; or
(C) is a transferee or assignee of a person
described by Paragraph (A) or (B) if the transferee or assignee is a
resident of this state and entitled to enforce the terms of a
contractor's warranty.
(7) "Serious safety hazard" means a life-threatening
malfunction, installation defect, or nonconformity that
substantially impedes a person's ability to live in or use a home or
that creates a substantial risk of fire, explosion, or exposure to a
toxic substance.
(8) "Warranty" means an express or implied warranty.
Sec. 30.003. APPLICABILITY OF CERTAIN OTHER LAW OR CONTRACT
PROVISIONS. (a) This chapter supersedes any other law or contract
provision that conflicts with this chapter.
(b) The remedies provided by this chapter supersede
remedies available under Chapter 27 or Title 16.
(c) Except as provided by this section, this chapter does
not limit the rights or remedies otherwise available to a homebuyer
under any other law.
(d) A contract provision that excludes or modifies the
remedies provided by this chapter is prohibited and is void as
against public policy unless the exclusion or modification is
included in a settlement agreement between a homebuyer and a
contractor.
Sec. 30.004. COMPLAINT. A homebuyer may seek a remedy
provided by this chapter by:
(1) providing to the contractor written notice
identifying each defect in the home that is covered by the
contractor's warranty; and
(2) filing a complaint with the commission that
includes a copy of the notice provided under Subdivision (1) on or
before the 30th day after the date the notice is provided.
Sec. 30.005. HEARING. (a) The administrator may set a
hearing on any allegation in a complaint that is not privately
resolved between the homebuyer and the contractor.
(b) The contested case provisions of Chapter 2001,
Government Code, apply to a hearing conducted under this chapter.
Sec. 30.006. TIME FOR FILING COMPLAINT. (a) Except as
provided by Subsection (b), a homebuyer must file a complaint under
this chapter before the earlier of:
(1) the date the express warranty period expires; or
(2) the 10th anniversary of the closing date.
(b) A homebuyer may file a complaint to which Section 30.010
applies on or before the 10th anniversary of the closing date.
Sec. 30.007. AFFIRMATIVE DEFENSE. In a hearing before the
administrator under this chapter, a contractor may assert as an
affirmative defense to an allegation of a defect made in a complaint
filed under this chapter that the defect is the result of abuse,
neglect, or modifications or alterations of the home made by a
person other than the contractor.
Sec. 30.008. REPAIR REQUIRED. (a) Except as provided by
Section 30.010, if a defect exists, the contractor shall make the
repairs necessary to conform the home to the contractor's
warranties if:
(1) the homebuyer or the homebuyer's designated agent
reported the defect to the contractor or the contractor's agent
before the expiration of the applicable time limit under Section
30.006; or
(2) a breach of a warranty described by Subsection (c)
on the home is established.
(b) The contractor must make the repairs required under
Subsection (a) not later than the 120th day after the date the
notice of the defect required by Section 30.004 is received by the
commission.
(c) Notwithstanding any other law, there is a presumption
that a breach of a warranty on a home exists if the home does not
comply with:
(1) a building code applicable to the home;
(2) the version applicable in the jurisdiction in
which the home is constructed of:
(A) the International Building Code for One- and
Two-Family Dwellings;
(B) the National Electric Code for One- and
Two-Family Dwellings; or
(C) the manufacturer's specific installation
instructions for the part or component used in construction of the
home; or
(3) structural engineering standards or practices
intended to prevent structural damage or a decrease in the market
value of the home resulting from the failure of the foundation or
other load-bearing portions of the home, including standards or
practices used to ensure that a foundation is structurally
sufficient without artificial moisture controls or other
extraordinary maintenance by the homeowner.
Sec. 30.009. RETURN OR REPLACEMENT REQUIRED. (a) Except as
provided by Section 30.010, if the contractor is unable to cure a
defect within the period prescribed by Section 30.008(b) and the
defect creates a serious safety hazard, substantially impairs the
use of the home, or decreases the home's market value by more than
five percent, the contractor shall at the homebuyer's option:
(1) replace the home with a comparable home in the same
neighborhood; or
(2) accept return of the home from the homebuyer and
refund to the homebuyer the full purchase price and any closing
costs and reasonable moving costs.
(b) The administrator may not order a remedy under this
section unless the contractor has been provided at least the number
of days prescribed by Section 30.008(b) to cure the defect that is
subject to the remedy provided by this section. The period required
by this subsection is extended by the amount of time during which
repair services are not available to a homebuyer because of a war,
invasion, strike, or fire, flood, or other natural disaster.
Sec. 30.010. MOLD CONTAMINATION. (a) Not later than the
30th day after the date of the administrator's order of a remedy
under this section, the contractor shall accept return of the home
from the homebuyer and refund to the homebuyer the full purchase
price and any closing costs and moving costs if, in addition to a
notice of a defect required by Section 30.004, a homebuyer:
(1) provides to the contractor and the commission
written results of tests that:
(A) are conducted by a mold testing laboratory
certified for the purposes of this section; and
(B) demonstrate proof of unacceptable levels of
toxic mold contamination that pose an imminent threat to the
health, safety, or welfare of the inhabitants; and
(2) establishes that the contamination arises out of
the defect.
(b) The commission by rule shall designate at least one
private organization that certifies mold testing laboratories from
whom certification is sufficient for the purposes of this section.
Sec. 30.011. REIMBURSEMENT OF EXPENSES. (a) If a
contractor is ordered to replace a home or refund the purchase price
under Section 30.009 or 30.010, the contractor shall reimburse the
homebuyer for:
(1) reasonable incidental costs resulting from the
loss of the use of the home because of the defect; and
(2) lost wages resulting from time required for
appointments with the contractor or the contractor's
representative that are necessary because of the defect.
(b) As necessary to promote the public interest, the
commission by rule:
(1) shall define the incidental costs that are
eligible for reimbursement under Subsection (a) and specify other
requirements necessary to determine an eligible cost; and
(2) may set a maximum amount that is eligible for
reimbursement, either by type of eligible cost or by a total for all
costs.
(c) Refunds shall be made to the homebuyer and primary
lienholder, as applicable.
Sec. 30.012. OTHER REMEDIES NOT PRECLUDED. This chapter
does not prevent a homebuyer from obtaining a remedy available to
the homebuyer under a new home warranty that provides remedies in
addition to those provided by this chapter.
Sec. 30.013. RIGHT TO FILE ACTION. (a) Except as provided
by this section, a homebuyer may not seek the remedies provided by
this chapter in a civil action unless the homebuyer files a
complaint against the contractor under this chapter and exhausts
the administrative proceedings provided by this chapter. A court
shall dismiss an action filed in violation of this section.
(b) If the hearing examiner does not issue a proposal for
decision and make a recommendation to the administrator for a final
order on or before the 150th day after the date a complaint is filed
under this chapter, the administrator shall provide written notice,
by certified mail, to the complainant and the contractor.
(c) The notice must inform the recipient of:
(1) the date the period for issuing a final order under
this chapter expires; and
(2) the complainant's right to file an action under
this section.
(d) After receiving a notice of the right to file an action
under Subsection (b), a complainant may file an action against a
contractor named in the complaint. The administrator's failure to
issue a notice of the right to file an action does not affect a
complainant's right to bring an action under this section.
Sec. 30.014. JUDICIAL REVIEW. A final order of the
administrator under this chapter:
(1) is the final action of the commission under this
chapter; and
(2) is subject to review only by judicial review as
provided by Chapter 2001, Government Code, to the extent that
chapter is not inconsistent with this chapter.
Sec. 30.015. INITIATION OR REMOVAL OF ACTION. (a) Except
as otherwise provided by this chapter, an appeal initiated under
this chapter may be removed to the Third Court of Appeals District
if any party to the action files a notice of removal with the
district court before the trial in the district court begins.
(b) An appeal initiated in or removed to the Third Court of
Appeals District:
(1) must be initiated under Chapter 2001, Government
Code, as if initiated in a Travis County district court; and
(2) is governed from the time of filing by the Texas
Rules of Appellate Procedure.
(c) If evidence outside the commission's record is to be
admitted in an appeal under Chapter 2001, Government Code, or
otherwise, the action:
(1) must be initiated in a Travis County district
court; or
(2) if initiated in the Third Court of Appeals
District, is subject to remand to a Travis County district court for
proceedings in accordance with instructions from the court of
appeals.
(d) Citation must be served on the administrator and each
party of record before the commission. For an appeal initiated in
the Third Court of Appeals District, the court shall cause citation
to be issued.
Sec. 30.016. DILIGENCE REQUIRED. (a) An appellant must
pursue an appeal with reasonable diligence. If an appellant fails
to prosecute an appeal in the six-month period after the appeal is
filed, the court shall presume that the appeal has been abandoned
and dismiss the appeal if a motion for dismissal is submitted by the
attorney general or another party.
(b) An appeal may not be dismissed under this section if the
appellant, after receiving notice and an opportunity to be heard,
demonstrates good cause for a delay.
Sec. 30.017. DISCLOSURE REQUIRED. (a) A contractor that is
ordered to refund the purchase price of or replace a home under this
chapter shall provide to the first retail purchaser of the home
after the home was repurchased or replaced by the contractor a
disclosure statement stating that the home was repurchased or
replaced by the contractor under this chapter.
(b) The disclosure statement must include the toll-free
telephone number established by the commission under Section
30.019.
(c) Before a home repurchased or replaced under this chapter
may be sold again, the deed that transfers title to the home must be
marked with a clear statement that indicates that the home was
repurchased or replaced under this chapter.
Sec. 30.018. RESTORATION OF WARRANTY REQUIRED. A
contractor who sells a home after repurchasing or replacing the
home under this chapter must:
(1) restore the home in a manner that conforms with
applicable building codes; and
(2) issue an express warranty for the home.
Sec. 30.019. TOLL-FREE TELEPHONE NUMBER. The commission
shall establish a toll-free telephone number for providing
information to persons who request information about a defect that
was the basis for ordering a remedy under this chapter. The
commission shall maintain an effective method of providing
information to persons who make requests.
Sec. 30.020. ANNUAL REPORT. (a) The commission shall
publish and make available to the public an annual report relating
to homes ordered repurchased or replaced by a contractor under this
chapter.
(b) The report must:
(1) list the number of homes by subdivision name, if
any;
(2) identify the contractor; and
(3) include a brief description of each defect that
was the subject of a remedy provided by this chapter.
(c) The commission may charge a reasonable fee to recover
the cost of the report.
Sec. 30.021. ADMINISTRATIVE PENALTY. (a) The commission
may impose an administrative penalty on a person who violates this
chapter or a rule or order adopted under this chapter.
(b) The imposition of a penalty is governed by Subchapter O,
Chapter 1101, Occupations Code.
Sec. 30.022. RULES. The commission, in consultation with
the Texas Real Estate Inspector Committee, shall adopt rules
necessary for the enforcement and administration of this chapter.
SECTION 2. (a) This Act takes effect September 1, 2009.
(b) This Act applies only to the sale of a new home for which
the closing date is on or after September 1, 2009. A sale of a new
home for which the closing date was before September 1, 2009, is
governed by the law in effect at the time of the sale, and that law
is continued in effect for that purpose.