83R8864 PMO-D
By: Rodriguez of Travis H.B. No. 2527
A BILL TO BE ENTITLED
AN ACT
relating to disclosure of the nature and remediation of
construction defects in residences that certain contractors
repurchase because of the defects and subsequently resell.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 27.001(4) and (5), Property Code, are
amended to read as follows:
(4) "Construction defect" [has the meaning assigned by
Section 401.004 for an action to which Subtitle D, Title 16, applies
and for any other action] means a matter concerning the design,
construction, or repair of a new residence, of an alteration of or
repair or addition to an existing residence, or of an appurtenance
to a residence, on which a person has a complaint against a
contractor. The term may include any physical damage to the
residence, any appurtenance, or the real property on which the
residence and appurtenance are affixed proximately caused by a
construction defect.
(5) "Contractor":
(A) means:
(i) a person [builder, as defined by
Section 401.003,] contracting with an owner for the construction or
repair of a new residence, for the repair or alteration of or an
addition to an existing residence, or for the construction, sale,
alteration, addition, or repair of an appurtenance to a new or
existing residence;
(ii) any person contracting with a
purchaser for the sale of a new residence constructed by or on
behalf of that person; or
(iii) a person contracting with an owner or
the developer of a condominium for the construction of a new
residence, for an alteration of or an addition to an existing
residence, for repair of a new or existing residence, or for the
construction, sale, alteration, addition, or repair of an
appurtenance to a new or existing residence; and
(B) includes:
(i) an owner, officer, director,
shareholder, partner, or employee of the contractor; and
(ii) a risk retention group registered
under Chapter 2201 [Article 21.54], Insurance Code, that insures
all or any part of a contractor's liability for the cost to repair a
residential construction defect.
SECTION 2. Chapter 27, Property Code, is amended by adding
Section 27.008 to read as follows:
Sec. 27.008. REQUIRED FULL DISCLOSURE CONCERNING DEFECTIVE
RESIDENCE REPURCHASED AND RESOLD BY CONTRACTOR. (a) This section
applies only to a contractor described by Sections 27.001(5)(A)(i)
and (iii).
(b) Before a contract may be executed or money exchanged
between a contractor and a buyer for purchase of a residence that,
because of one or more construction defects in the residence, the
contractor repurchased from a person who had previously bought the
residence from the contractor, the contractor must provide to the
buyer a document that fully discloses the nature of and the
contractor's remediation of each of those construction defects.
(c) In addition to disclosing the nature of each
construction defect and the remediation work performed, the
disclosure under Subsection (b) must include information
disclosing:
(1) any product installed in the residence relating to
the remediation;
(2) the care and component warranty of each remedial
product;
(3) building standards used in performing the
remediation; and
(4) any risk or hazard of the residence after
remediation.
SECTION 3. Section 27.008, Property Code, as added by this
Act, applies only to a contract executed by a contractor and a buyer
as described by Section 27.008, 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 governed by the law in
effect when the contract was executed, and the former law is
continued in effect for that purpose.
SECTION 4. This Act takes effect September 1, 2013.