Texas 2009 - 81st Regular

Texas House Bill HB981 Compare Versions

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

Old	New	Differences
1	1	81R5458 AJA-F
2	2	By: Thompson H.B. No. 981
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to consumer protection for and remedies available to a
8	8	homebuyer whose home does not comply with certain warranties;
9	9	providing an administrative penalty.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Title 16, Property Code, is amended by adding
12	12	Subtitle G to read as follows:
13	13	SUBTITLE G. HOMEOWNER REMEDIES
14	14	CHAPTER 456. NEW HOME BUYERS
15	15	Sec. 456.001. DEFINITIONS. In this chapter:
16	16	(1) "Defect" means a construction defect or any other
17	17	condition that prevents a home from conforming to an applicable
18	18	warranty.
19	19	(2) "Homebuyer" means a person who:
20	20	(A) purchased a home from a builder and is
21	21	entitled to enforce the terms of the builder's warranty with
22	22	respect to the home;
23	23	(B) is a lessor or lessee, other than a
24	24	sublessee, who purchased or leased the home from the builder; or
25	25	(C) is a transferee or assignee of a person
26	26	described by Paragraph (A) or (B) if the transferee or assignee is a
27	27	resident of this state and entitled to enforce the terms of the
28	28	builder's warranty.
29	29	(3) "Serious safety hazard" means a life-threatening
30	30	malfunction, installation defect, or nonconformity that
31	31	substantially impedes a person's ability to live in or use a home or
32	32	that creates a substantial risk of fire, explosion, or exposure to a
33	33	toxic substance.
34	34	(4) "Warranty" means the statutory warranties under
35	35	Chapter 430 and any additional warranty provided by a builder in
36	36	accordance with Sections 430.006 and 430.007.
37	37	Sec. 456.002. APPLICABILITY OF CERTAIN OTHER LAW OR
38	38	CONTRACT PROVISIONS. (a) This chapter supersedes any other law or
39	39	contract provision that conflicts with this chapter, including the
40	40	Deceptive Trade Practices-Consumer Protection Act (Subchapter E,
41	41	Chapter 17, Business & Commerce Code).
42	42	(b) The remedies provided by this chapter supersede
43	43	remedies available under Chapter 27 or the Deceptive Trade
44	44	Practices-Consumer Protection Act (Subchapter E, Chapter 17,
45	45	Business & Commerce Code).
46	46	(c) If a dispute to which this chapter applies is also
47	47	subject to Chapter 426, the homebuyer must comply with Subtitle D
48	48	before pursuing a remedy under this chapter.
49	49	(d) Except as provided by this section, this chapter does
50	50	not limit the rights or remedies otherwise available to a homebuyer
51	51	under any other law.
52	52	(e) A contract provision that excludes or modifies the
53	53	remedies provided by this chapter is prohibited and is void as
54	54	against public policy unless the exclusion or modification is
55	55	included in a settlement agreement between a homebuyer and a
56	56	builder.
57	57	Sec. 456.003. COMPLAINT. A homebuyer may seek a remedy
58	58	provided by this chapter by:
59	59	(1) providing to the builder written notice
60	60	identifying each defect in the home that is covered by the builder's
61	61	warranty; and
62	62	(2) filing a complaint with the commission that
63	63	includes a copy of the notice provided under Subdivision (1) on or
64	64	before the 30th day after the date the notice is provided.
65	65	Sec. 456.004. HEARING. (a) The commission may hold a
66	66	hearing on any allegation in a complaint that is not privately
67	67	resolved between the homebuyer and the builder.
68	68	(b) The contested case provisions of Chapter 2001,
69	69	Government Code, apply to a hearing conducted under this chapter.
70	70	Sec. 456.005. TIME FOR FILING COMPLAINT. (a) Except as
71	71	provided by Subsection (b), a homebuyer must file a complaint under
72	72	this chapter before the earlier of:
73	73	(1) the date the applicable warranty period expires;
74	74	or
75	75	(2) the 10th anniversary of the closing date.
76	76	(b) If the dispute is submitted to the state-sponsored
77	77	inspection and dispute resolution process, a complaint under this
78	78	chapter must be submitted not later than the 30th day after the date
79	79	the third-party inspector's recommendation is issued or, if the
80	80	homebuyer appeals the inspector's recommendation, the 30th day
81	81	after the date the appeals panel issues a ruling on the appeal.
82	82	Sec. 456.006. AFFIRMATIVE DEFENSE. In a hearing before the
83	83	commission under this chapter, a builder may assert as an
84	84	affirmative defense to an allegation of a defect made in a complaint
85	85	filed under this chapter that the defect is the result of abuse,
86	86	neglect, or modifications or alterations of the home made by a
87	87	person other than the builder.
88	88	Sec. 456.007. REPAIR REQUIRED. (a) Except as provided by
89	89	Section 456.009, if a defect exists, the builder shall make the
90	90	repairs necessary to conform the home to the builder's warranties
91	91	if:
92	92	(1) the homebuyer or the homebuyer's designated agent
93	93	reported the defect to the builder or the builder's agent before the
94	94	expiration of the applicable time limit under Section 456.005; or
95	95	(2) a breach of warranty on the home is established.
96	96	(b) The builder must make the repairs required under
97	97	Subsection (a) not later than the 120th day after the date the
98	98	notice of the defect required by Section 456.003 is received by the
99	99	commission.
100	100	Sec. 456.008. RETURN OR REPLACEMENT REQUIRED. (a) Except
101	101	as provided by Section 456.009, if the builder is unable to cure a
102	102	defect within the period prescribed by Section 456.007(b) and the
103	103	defect creates a serious safety hazard, substantially impairs the
104	104	use of the home, or decreases the home's market value by more than
105	105	five percent, the builder shall at the homebuyer's option:
106	106	(1) replace the home with a comparable home in the same
107	107	neighborhood; or
108	108	(2) accept return of the home from the homebuyer and
109	109	refund to the homebuyer the full purchase price and any closing
110	110	costs and reasonable moving costs.
111	111	(b) The commission may not order a remedy under this section
112	112	unless the builder has been provided at least the number of days
113	113	prescribed by Section 456.007(b) to cure the defect that is subject
114	114	to the remedy provided by this section. The period required by this
115	115	subsection is extended by the amount of time during which repair
116	116	services are not available to a homebuyer because of a war,
117	117	invasion, strike, or fire, flood, or other natural disaster.
118	118	Sec. 456.009. MOLD CONTAMINATION. (a) Not later than the
119	119	30th day after the date of a hearing examiner's order of a remedy
120	120	under this section, the builder shall accept return of the home from
121	121	the homebuyer and refund to the homebuyer the full purchase price
122	122	and any closing costs and reasonable moving costs if, in addition to
123	123	notice of a defect required by Section 456.003, a homebuyer:
124	124	(1) provides to the contractor and the commission
125	125	written results of tests that:
126	126	(A) are conducted by a mold testing laboratory
127	127	certified for the purposes of this section; and
128	128	(B) demonstrate proof of unacceptable levels of
129	129	toxic mold contamination that pose an imminent threat to the
130	130	health, safety, or welfare of the inhabitants; and
131	131	(2) establishes that the contamination arises out of
132	132	the defect.
133	133	(b) The commission by rule shall designate at least one
134	134	private organization that certifies mold testing laboratories from
135	135	whom certification is sufficient for the purposes of this section.
136	136	Sec. 456.010. REIMBURSEMENT OF EXPENSES. (a) If a builder
137	137	is ordered to replace a home or refund the purchase price under
138	138	Section 456.008 or 456.009, the builder shall reimburse the
139	139	homebuyer for:
140	140	(1) reasonable incidental costs resulting from the
141	141	loss of the use of the home because of the defect; and
142	142	(2) lost wages resulting from time required for
143	143	appointments with the builder or the builder's representative that
144	144	are necessary because of the defect.
145	145	(b) As necessary to promote the public interest, the
146	146	commission by rule:
147	147	(1) shall define the incidental costs that are
148	148	eligible for reimbursement under Subsection (a) and specify other
149	149	requirements necessary to determine an eligible cost; and
150	150	(2) may set a maximum amount that is eligible for
151	151	reimbursement, either by type of eligible cost or by a total for all
152	152	costs.
153	153	(c) Refunds shall be made to the homebuyer and primary
154	154	lienholder, as applicable.
155	155	Sec. 456.011. OTHER REMEDIES NOT PRECLUDED. This chapter
156	156	does not prevent a homebuyer from obtaining a remedy available to
157	157	the homebuyer under a new home warranty that provides remedies in
158	158	addition to those provided by this chapter.
159	159	Sec. 456.012. RIGHT TO FILE ACTION. (a) Except as provided
160	160	by this section, a homebuyer may not seek the remedies provided by
161	161	this chapter in a civil action unless the homebuyer files a
162	162	complaint against the builder under this chapter and exhausts the
163	163	administrative proceedings provided by this chapter. A court shall
164	164	dismiss an action filed in violation of this section.
165	165	(b) If the hearing examiner does not issue a proposal for
166	166	decision and make a recommendation to the commission for a final
167	167	order on or before the 150th day after the date a complaint is filed
168	168	under this chapter, the commission shall provide written notice, by
169	169	certified mail, to the complainant and the builder.
170	170	(c) The notice must inform the recipient of:
171	171	(1) the date the period for issuing a final order under
172	172	this chapter expires; and
173	173	(2) the complainant's right to file an action under
174	174	this section.
175	175	(d) After receiving a notice of the right to file an action
176	176	under Subsection (b), a complainant may file an action against a
177	177	builder named in the complaint. The commission's failure to issue a
178	178	notice of the right to file an action does not affect a
179	179	complainant's right to bring an action.
180	180	Sec. 456.013. JUDICIAL REVIEW. A final order of the
181	181	commission under this chapter:
182	182	(1) is the final action of the commission under this
183	183	chapter; and
184	184	(2) is subject to review only by judicial review as
185	185	provided by Chapter 2001, Government Code, to the extent that
186	186	chapter is not inconsistent with this chapter.
187	187	Sec. 456.014. INITIATION OR REMOVAL OF ACTION. (a) Except
188	188	as otherwise provided by this chapter, an appeal initiated under
189	189	this chapter may be removed to the Third Court of Appeals District
190	190	if any party to the action files a notice of removal with the
191	191	district court before the trial in the district court begins.
192	192	(b) An appeal initiated in or removed to the Third Court of
193	193	Appeals District:
194	194	(1) must be initiated under Chapter 2001, Government
195	195	Code, as if initiated in a Travis County district court; and
196	196	(2) is governed from the time of filing by the Texas
197	197	Rules of Appellate Procedure.
198	198	(c) If evidence outside the commission's record is to be
199	199	admitted in an appeal under Chapter 2001, Government Code, or
200	200	otherwise, the action:
201	201	(1) must be initiated in a Travis County district
202	202	court; or
203	203	(2) if initiated in the Third Court of Appeals
204	204	District, is subject to remand to a Travis County district court for
205	205	proceedings in accordance with instructions from the court of
206	206	appeals.
207	207	(d) Citation must be served on the commission and each party
208	208	of record before the commission. For an appeal initiated in the
209	209	Third Court of Appeals District, the court shall cause citation to
210	210	be issued.
211	211	Sec. 456.015. DILIGENCE REQUIRED. (a) An appellant must
212	212	pursue an appeal with reasonable diligence. If an appellant fails
213	213	to prosecute an appeal in the six-month period after the appeal is
214	214	filed, the court shall presume that the appeal has been abandoned
215	215	and dismiss the appeal if a motion for dismissal is submitted by the
216	216	attorney general or another party.
217	217	(b) An appeal may not be dismissed under this section if the
218	218	appellant, after receiving notice and an opportunity to be heard,
219	219	demonstrates good cause for a delay.
220	220	Sec. 456.016. DISCLOSURE REQUIRED. (a) A builder who is
221	221	ordered to refund the purchase price of or replace a home under this
222	222	chapter shall provide to the first retail purchaser of the home
223	223	after the home was repurchased or replaced by the builder a
224	224	disclosure statement stating that the home was repurchased or
225	225	replaced by the builder under this chapter.
226	226	(b) The disclosure statement must include the toll-free
227	227	telephone number established by the commission under Section
228	228	456.018.
229	229	(c) Before a home repurchased or replaced under this chapter
230	230	may be sold again, the deed that transfers title to the home must be
231	231	marked with a clear statement that indicates that the home was
232	232	repurchased or replaced under this chapter.
233	233	Sec. 456.017. RESTORATION OF WARRANTY REQUIRED. A builder
234	234	who sells a home after repurchasing or replacing the home under this
235	235	chapter must restore the home in a manner that conforms with the
236	236	limited statutory warranties and building and performance
237	237	standards.
238	238	Sec. 456.018. TOLL-FREE TELEPHONE NUMBER. The commission
239	239	shall establish a toll-free telephone number for providing
240	240	information to persons who request information about a defect that
241	241	was the basis for ordering a remedy under this chapter. The
242	242	commission shall maintain an effective method of providing
243	243	information to persons who make requests.
244	244	Sec. 456.019. ANNUAL REPORT. (a) The commission shall
245	245	publish and make available to the public an annual report relating
246	246	to homes ordered repurchased or replaced by a builder under this
247	247	chapter.
248	248	(b) The report must:
249	249	(1) list the number of homes by subdivision name, if
250	250	any;
251	251	(2) identify the builder; and
252	252	(3) include a brief description of each defect that
253	253	was the subject of a remedy provided by this chapter.
254	254	(c) The commission may charge a reasonable fee to recover
255	255	the cost of the report.
256	256	Sec. 456.020. DISCIPLINARY PROCEEDINGS; ADMINISTRATIVE
257	257	PENALTY. A builder who violates this chapter or a rule or order
258	258	adopted under this chapter is subject to disciplinary action and an
259	259	administrative penalty under Chapters 418 and 419.
260	260	SECTION 2. Subtitle G, Title 16, Property Code, as added by
261	261	this Act, applies only to the sale of a new home for which the
262	262	closing date is on or after the effective date of this Act. A sale
263	263	of a new home for which the closing date was before the effective
264	264	date of this Act is governed by the law in effect at the time of the
265	265	sale, and that law is continued in effect for that purpose.
266	266	SECTION 3. This Act takes effect September 1, 2009.