05/28/09 Press Release: Homeowners group succeeds against all odds in its campaign to abolish the TRCC

CONSOLIDATED TRCC NEWS COVERAGE

Sun setting on homebuilding commission

Elimination of TRCC in 2010 could pose problems, some say

by Kate Harrington (kharrington@bizjournals.com, 512-494-2523), Austin Business Journal, 06/26/2009 (Katherine Cromer Brock of the Dallas Business Journal contributed to this report.), www.bizjournals.com/austin/stories/2009/06/29/story4.html

One of the homebuilding industry’s largest regulating bodies, the Texas Residential Construction Commission, has been allowed to sunset by the 81st Legislature, which some say could lead to more litigation in the court system and less oversight of builders. [HOT: Some say? Builders say this; consumers say Good Riddance.]

The TRCC’s official mission is to promote quality construction by registering industry members and projects, providing information and education to homeowners and acting as a resource for complaints. [HOT: As documented in two government reports and overwhelming public testimony, the simple act of registering builders and homes offered little to no oversight and did nothing to prevent unqualified and unscrupulous people from acting as builders.]

In the first six months of the TRCC’s fiscal year, which begins in September, it fielded 358 requests for inspections from homeowners and received 1,137 complaints about builders from homeowners, said Duane Waddill, executive director of the TRCC. During that period, it fined 123 builders a total of $143,545.

Although it registers homebuilders, the TRCC was never meant to act as a true regulatory agency, a role it has nonetheless awkwardly fallen into, according to a report from the Sunset Commission published earlier this year. The TRCC oversees a state inspection process designed to resolve disputes between homeowners and builders before either party pursues legal action. But as a means to regulate residential construction, the process is “fundamentally flawed and does more harm than good,” the Sunset Commission concluded.

“Despite changes last session ostensibly to strengthen the process by making builders subject to new penalties if they refuse to offer repair of a confirmed defect, the commission still has no real power to require builders to make needed repairs,” the Sunset Commission’s report said. “Because homeowners must submit to this process before they may seek remedies in court, those who fail to satisfy its requirements either out of confusion or frustration lose their access to court.”

Still, some homebuilders said the construction commission did its job by keeping an eye on scurrilous builders across the state who were otherwise able to burn bridges from town to town without getting caught.

James Streetman, president of Austin-based Streetman Homes Ltd. LLP, said the industry is so large that it took a body like the TRCC to keep a comprehensive eye on contractors.

“The allegation that it was stacked in favor of builders isn’t true. I think they often ruled for the buyer,” Streetman said. “We thought the intent of the commission was very good — to eliminate people who shouldn’t be in the business and serve as an intermediary. … Unfortunately, it became political.” [HOT: The commission never fulfilled that intent.]

The TRCC will cease to exist September 2010. Streetman said without the TRCC acting as a mediator, more disputes between buyers and homebuilders will enter the court system, although warranty providers could step into a mediation role once the commission is gone. [HOT: Not true. At least 90% of disputes regarging new home construction are required to go through mandatory binding arbitration instead of the court system due to non-negotiable clauses in sales contracts and warranty agreements.]

Scott Norman, executive director of the Texas Association of Builders, said consumers, more than homebuilders, will feel the impact of the TRCC’s absence because of the commission’s role in resolving disputes. Local and state homebuilder associations will have to take on much of that role, he predicted.

Mandatory warranties and performance standards required by law will also be left unenforced, Norman said. [HOT: Consumer advocates say the older "implied warranty of habitability" was better than state warranty standards with exclusions for things like "soil conditions."]

“It really changes the game from a risk standpoint,” said George Schneller, risk consultant with IMA of Texas Inc., who is a former plaintiff’s lawyer. “While the TRCC was in existence, there were advantages realized by the homebuilders. Before a lawsuit alleging a construction defect, a home buyer was required to submit a claim to the TRCC and let that administrative agency investigate.”

Waddill said the TRCC gets many open records requests, and lists information on its Web site about builders, a resource that will go away with the commission.

“I encourage people to do a lot of homework before they spend a lot of money with a builder,” he said.

3 Reader Comments

Thomas Archer wrote:
The recent success of Homeowners of Texas, as the underdog that helped take down the TRCC, has earned the respect of many who didn't think this 1-year old non-profit had a chance against the powerful builders' lobby. With increased support from homeowners and other stakeholders, HOT is excited about the potential for even more meaningful reforms that further improve homebuilding, the market for new homes, and economic development in Texas, all while protecting consumers from shoddy construction and business practices. Visit www.homeownersoftexas.org/#next to see what’s next on our legislative agendas for Texas and the Nation.

Janet Ahmad wrote:
Goodnight and Good Riddance TRCC”TRCC was never meant to act as a true regulatory agency;” it was financed and crafted as a state agency by the building industry to serve its needs and to regulate new homebuyers. TRCC was the punishment phase of homeownership.While 92% of the homeowners who went through TRCC confirmed construction defects 88% got nothing corrected. Many homebuilders even relied on TRCC for its warranty customer service by ignoring warranty requests or filed claims against their customers with their agency. Two state agencies reviewed TRCC and issued scathing reports. Even the trustworthy reputable builders publicly rejected TRCC. Unfortunately the growing exposure of the industry’s highly profitable but toxic deeds threatens the image of every aspect of the building industry. The fall out of TRCC is far from over for the industry. TRCC will for ever remain as the prototype for the need to regulate the industry. While this article attempts to sugarcoat the unpleasant smell of TRCC the agency will always be remember as the agency created “by the builders for the builders.”

Marc Kirsch wrote:
Now that the builders have spoken why not ask those who had the unforunate experience of having a new home laden with defects how efficent TRCC was to their case?TRCC seemed to have a problem of believing the builder without investigating or doing its homework in my opinion. How many times were inspector's decison's overturned to support the builder after originally siding with the homeowner? What this state needs is an agency made up of consumer advocates and well respected engineers and home inpsectors + laws protecting the consumer.

Group's end puts burden onto courts

By Walt Nett (walt.nett@lubbockonline.com), Lubbock Avalance-Journal, 07/12/2009
http://lubbockonline.com/stories/071209/bus_462321548.shtml#mdw-comments

Home builders and remodelers could wind up in court, or in arbitration, a lot faster after Sept. 1, when a controversial state agency that was supposed to help resolve construction disputes faster starts to dismantle itself.

The Texas Residential Construction Commission, created in 2003 to provide independent post-construction inspections and register the state's unregulated home construction industry, will stop accepting complaints and signing up builders Sept. 1 because the Legislature opted not to extend the agency's life earlier this year.

On that date, new construction disputes will be resolved under provisions of the 20-year-old Residential Construction Liability Act - a change that's drawing mixed reviews from industry officials and consumers alike.

The one change consumer spokesman John Covarrubias, president of the Texas chapter of Home Owners Against Deficient Dwellings, applauded was the elimination of TRCC's statutory warranty provision.

TRCC regulations included warranties limited to one year on workmanship and materials, two years on electrical, plumbing and heating/cooling systems and 10 years on structural work.

Returning to RCLA, Covarrubias said, means bringing back the "implied warranty of workmanship," which puts the final decision about workmanship or the habitability of a dwelling in the hands of a court jury or an arbitrator.

Both sides agreed that going to court has a financial downside.

Art Cuevas, a Lubbock custom home builder who is also a TRCC commission member, said that reverting to RCLA means a homebuyer with a complaint will have to lay out several thousand dollars to hire a lawyer if the issue goes into litigation.

"Someone who buys a $500,000 home, a million-dollar home has the funds to pay an attorney. Someone who buys an entry-level home ... it will take them $5,000, $7,000, $10,000 to take someone to court," Cuevas said. "A lot of people don't have the funds to hire a lawyer." [HOT: They realistically needed an attorney when going through the TRCC - and their own inspector and other expert witnesses - becaust the builder would be supplying theirs.]

He said that's especially true in small-claims situations where the cost of repairs may turn out to be less than what the homeowner would spend on a lawyer.

Under RCLA, the purchaser of a new home who has a complaint about materials or workmanship must give the builder or remodeler a 60-day complaint notice. The builder has 35 days to inspect the problem and 10 days after that to offer to repair. If things can't be resolved, the homeowner gives the builder or remodeler a 60-day notice of intent to file suit or apply for arbitration.

That change underscores one issue that may have led to TRCC's legislative demise.

In January, a staff report from the Sunset Advisory Commission recommended abolishing TRCC unless lawmakers were willing to make it a complete regulatory agency with the ability to license builders and take strong measures against companies that weren't performing.

One of the confusing elements of TRCC's regulations was that the agency could suspend or revoke a builder's registration for failing to make an offer to repair deficiencies identified by a third-party inspector, but the agency had no authority to make the builder follow through on the offer.

In a situation such as that, the homeowner would then have to rely on RCLA's 60-day notice provision to threaten a lawsuit.

Under its legislative authority, TRCC could require home builders to register their companies - and their projects. Unlike registration, which merely required that a qualifying party in a company met certain citizenship and financial criteria, licensure means an applicant must also be tested to prove he or she has the necessary contracting and business skills to operate.

And the legislative battle between proponents of TRCC's registration authority and supporters of home builder licensure ultimately proved to be the agency's undoing earlier this year.

Rep. Carl Isett, R-Lubbock, said it wasn't the will of the Sunset Advisory Committee that TRCC be abolished.

"It was not the will of the committee to adopt the (staff) report," said Isett, who was the committee's chairman this year.

"So we went ahead and drafted a report on how to reform the agency in a way that would make some sense, and become a little more user-friendly for consumers," he said. [HOT: This must be misquoted. They drafted a bill, not a report.]

The bill made its way through the House, where it passed on a 137-7 vote.

"But it was changed dramatically in the House process."

Isett said that what was meant to still be a low-cost, low-level way to deal with smaller problems between home builders and their customers, grew into a larger agency with more employees and more power, including licensure.

The bill ultimately died in a Senate committee without a hearing at the request of the bill's sponsors as a result of the House amendments.

Cuevas, who said TRCC had been making a lot of progress in recent months speeding up its handling of complaints, said of the legislative situation, "We just weren't a priority."

Cuevas said TRCC was developing several consumer resources, including listing of problem builders and a display on the agency's Web site for consumers about "how a house is supposed to react and respond over time."

In general, he said, the consumer will feel a loss because the construction standards TRCC was using were more stringent than accepted industry standards. [HOT: To the contrary, the consumer will feel relieved since there's now one less obstable between them and restitution.]

"Now, we'll be back to generalization, and that leaves a lot to be interpreted about whether something's normal wear and tear, or whether it's extreme," Cuevas said.

Randy McGuire, president of the West Texas Homebuilders Association, said the loss of performance standards when TRCC goes away will be felt by the industry.

"I think TAB is going to try to maintain those standards. A lot of work went into creating that document," he said.

"It's a living document," McGuire said of the TRCC performance standards. "Materials and products come on the market and change the way we build. (The document) is something that has to be maintained, something TRCC was maintaining."

TRCC was also good for upstanding builders who wanted to know what their obligations really were, McGuire said, adding that very few builders from West Texas had problems that brought them into TRCC's examinations.

McGuire, who was a licensed contractor in Florida before coming to Texas, said he has some concerns about licensure.

"Anybody that likes smaller government does not like that," he said of licensing. "It does give the state a little more control over the individual builder, but there are other issues that come along with that."

Licensure reduces competition, McGuire said, which pushes prices up for the consumer. [HOT: Does that mean we should quit licensing physicians, dentists, nurses, engineers and attorneys? We'd have more competition since anyone could do surgery or design bridges without a degree or passing an exam, especially with an agency in place to protect them from lawsuits. Heart surgery would be less expensive.]

At the same time, Cuevas said, the best move for consumers is to do their homework.

He said most people buying a newly built home make the decision based on price, when they should be asking questions about the builder's background and reputation.

Cuevas said most home buyers don't have the sophisticated knowledge of construction needed to understand plans and specifications so that they know what they're buying.

Reader Comments

Posted by JohnCoby:

Wow! The members of the TRCC and their supporters are still holding on to this failed commission. It is quite pathetic.

Do yourself a favor, instead of buying a newly constructed home, but a used home. Dont take the risk of shoddy building. You will regret it the rest of your life.

Posted by Scammed:

Quite ridiculous these people would still defend TRCC. For 3 legislative sessions I saw many of the same people testifying and asking for help. I personally received none and this "agency" allowed my builder to get away with the horrors they instilled in my house.

Almost no large scale builder was ever hit with fines regardless of the bad work they did, regardless of the fact they would not fix things, regardless of repeated complaints against them.

It is time for this agency to go so that we can start fresh and put in place an agency that cares about doing things right and looking out for the consumer, in my opinion.

Posted by WCaswell:

DISPUTE RESOLUTION – Abolishing the TRCC won’t burden courts as you imply. Almost all new home contracts force consumers into binding arbitration to resolve disputes, and if the sales contract doesn’t include that language, the “free” builder-supplied warranty policy often does.

I’d frankly love to see a flood of lawsuits because arbitration is so much more expensive than a suit. It almost always favors builders who support that (arbitration) industry and denies consumers their constitutional right to a jury trial. I think it’s unconscionable that builders are allowed to hide the fact that their non-negotiable sales contracts include such clauses or that buyers aren’t given adequate time to read the fine print of their warranty agreements. There’s a bill in front of Congress that hopes to end that practice, but if it fails on a national level, you can bet our group will fight for homeowners in Texas.

Why were so many homeowners up in arms against the TRCC? It was yet another obstacle to resolving disputes. Rather than replace the need for hiring professional representation (attorney, inspector, engineer), homeowners needed them more than ever. Even if the state inspection (with all of the builder experts present) confirmed defect, the agency had no way of compelling the builder to fix the problems.

HOME WARRANTIES – The implied warranty of habitability required general contractors to build dwellings that you could actually live in – satisfying building codes and meeting prevailing standards of workmanship. Although the older warranty standards were sometimes open to interpretation, they nonetheless gave homeowners a way of seeking restitution for defective construction. The TRCC minimum warranty requirements replaced those implied standards with codified standards that were full of exclusions, including these (cut/paste from the TRCC Information Booklet with [comments] added):

    "Work performed or materials supplied by someone other than the builder/remodeler." [i.e. subcontractors]

    "Changes to the soil that are not a direct result of construction activities." [i.e. soil that shrinks when dry and expands when wet]

Please realize that a new house is the most expensive commodity most people will ever buy, yet they have more rights and protections when buying a used car, appliances, and other consumer products. Surely you’ve been able to return a defective product to Home Depot, Nordstrom’s or Wal-Mart? Try that with a $200,000 home that’s mold-infested, falling down, otherwise uninhabitable, and forcing you into foreclosure. Thank God, we’re returning to the implied warranty.

End mapped out for Texas construction agency

Department that regulates construction will be phased out

By Jennifer Hiller, San Antonio Express-News, 06/12/2009
http://www.chron.com/disp/story.mpl/metropolitan/6476533.html

The agency that oversees home building in Texas will be dismantled over the next 14 months under a plan announced Friday. But it will be business as usual for builders and homeowners dealing with the Texas Residential Construction Commission until Aug. 31. After that, the agency starts a yearlong wind-down of its operations.

The agency is outlining its demise after lawmakers did not act to save the beleaguered agency from the state’s “sunset” process. It will close its doors Aug. 31, 2010.

Under the plan:

• New homes and projects completed by Aug. 31 must be registered with the agency. 
• Home inspection requests will be accepted through August from home-owners or builders who are at odds over construction issues. 
• The agency will process those complaints through Aug. 31, 2010. 
• Builder registrations and renewal registration applications will be accepted through Aug. 31, but will be prorated. 

The 5-year-old agency was initially billed as a way to regulate home building and create a way for homeowners and builders to resolve disputes out of court. But it had little enforcement authority. [HOT: And it did little to enforce the authority it had.]

A 2006 audit from the Texas comptroller’s office branded the agency a “paper tiger” and said it shielded builders from responsibility.

The Sunset Advisory Commission staff last year recommended abolishing the agency, in part because of the inability of the agency to force builders to repair shoddy construction work.

Homeowners were forced to go through the agency before going to court but didn’t trust it, the staff report said.

“No other regulatory agency has a program with such a potentially devastating effect on consumers’ ability to seek their own remedies,” it said.

In September, Texas reverts to the pre-TRCC law, the Residential Construction Liability Act, which limited damages homeowners could seek and gave builders the right to repair poor construction.

Ned Muñoz, vice president of regulatory affairs and general counsel for the Texas Association of Builders, said a bill passed this session will allow counties to enforce building codes and conduct home inspections in unincorporated areas — something that will help regulation in the absence of the agency.

“I think that bill is an important thing to have passed in light of the TRCC’s demise,” he said. “It benefits homeowners. It protects home builders to make sure someone who doesn’t build to code won’t undercut the industry.”

Once the agency closes, TRCC spokeswoman Magelly Castiblanco said, it’s still unclear where the agency’s data and records will go.

“We had a staff meeting recently, and that is a big question,” she said.

The agency has about 200 cases pending.

Homebuilders decry TRCC’s demise

With commission gone, niche to be unregulated

by Katherine Cromer Brock, Dallas Business Journal, 06/12/2009
http://dallas.bizjournals.com/dallas/stories/2009/06/15/story12.html

The Texas Residential Construction Commission, in place since 2003, has been allowed to sunset by the 81st Legislature, leaving the residential homebuilding industry largely unregulated — and homebuilders scrambling to protect themselves against lawsuits.

The TRCC was not designed to be a regulatory agency or a consumer protection board, according to a report the Sunset Commission published earlier this year. But over the years, that’s the role the commission has assumed.

That being said, the TRCC’s method of registering — not licensing — homebuilders and contractors, hasn’t had the teeth of other states’ regulatory agencies. And the state inspection process, which homeowners have been required to navigate before taking a builder to court over a defect or warranty issue, has been lengthy and sometimes difficult to move through.

The Sunset Commission recommended that the TRCC be allowed to die, and that is what state lawmakers have done. Unless procedures for folding the agency are changed during a special session of the Legislature, the commission will begin its wind-down this fall, concluding business by September 2010, according to Phil Crone, director of government relations with the Home Builders Association of Greater Dallas.

TRCC failed to serve its intended purpose

San Antonio Express-News Editorial, 06/08/2009
http://www.mysanantonio.com/opinion/TRCC_failed_to_serve_its_intended_purpose.html

There won't be much mourning among homeowners for the demise of the Texas Residential Construction Commission, the state agency created six years ago to oversee home building in Texas.

Who can blame them?

Initially touted as a way to improve building standards and offer builders protection from lawsuits, the agency never lived up to the public expectations and actually caused more harm than good for consumers.

The TRCC was headed for problems from the beginning.

The legislation creating it designated six of the nine seats on the commission for representatives of the homebuilding community and procedures placed additional costs and burdens of proof on homeowners.

Within a short period of operation, it became evident the commission was not working as intended and needed to be abolished.

However, for a while it appeared the agency might get saved from being dismantled.

Thankfully, lawmakers ignored the recommendation of the Sunset Advisory Commission to keep the TRCC alive and did not approve legislation by Rep. Ruth Jones McClendon, D-San Antonio, that would have kept the beleaguered agency operating.

The Sunset Advisory Commission position on the agency made no sense. The commission's staff had advised members the TRCC was “fundamentally flawed” and was not working the way it was supposed to work.

It's time go back to the drawing board on this one.

Other states have made agencies such as this one work for them. The Legislature needs to establish a better framework for an agency that will address the concerns of both the home buyers and the builders. Hopefully, it will be one that will not be heavily influenced by lobbyists hired by powerful builders and developers or the hefty political donations of a small group in the industry.

Some valuable lessons can be learned from the TRCC fiasco. Hopefully, there are some quick studies up in Austin.

How the local delegation fared this legislative session

Extracted from report by Corrie MacLaggan, Danny Yadron and Mike Ward (AMERICAN-STATESMAN STAFF), 06/07/2009
http://www.statesman.com/search/content/region/legislature/stories/06/07/0607ausdelegation.html

...
 
Rep. Dan Gattis (R-Georgetown, District 20)

Gattis said even after losing the voter identification battle and being limited by a narrow House majority, Republicans emerged the victors in the 81st Legislature. "Straus wielded the gavel the way he had to with a 76-74 split," Gattis said. "Who really showed their strength was the Republican caucus in sticking by their guns and saying, 'We're going to hold tight all the way through this.' "

Accomplishments: Although the House did not vote on his proposal to abolish the Texas Residential Construction Commission, the Legislature did decide to phase out the commission. The beleaguered agency is meant to resolve disputes between homeowners and builders, but critics have said it lacks teeth. Passed the Texas Armed Services Scholarship Program bill, which allows the governor and lieutenant governor to give two scholarships a year worth up to $15,000 each to Reserve Officers' Training Corps students. Each member of the Legislature is allowed to give one scholarship a year.

Disappointments: His proposal to create an Office of Inspector General made it out of committee but not to the House floor. Currently, various state agencies have their own inspectors general, but Gattis' proposal would have created an independent office, headed by an appointee of the governor.

HOT: As we wrote in a letter to the editor, here are the facts regarding local Rep. Dan Gattis and the Legislature’s decision to abolish the Texas Residential Construction Commission (TRCC):

(1) Although Rep. Gattis filed legislation which would have abolished the TRCC, he actually supported the passage of a Committee Substitute for House Bill 2295, which was sponsored by the builders. On April 17, to the detriment of Texas homeowners, he voted for this legislation which would have extended the life of this builder protection agency for 6 more years, abolished local arbitration of residential construction disputes, and eliminated judicial review of arbitration awards that violate Texas law. This legislation also provided no meaningful oversight of the Texas homebuilding industry or the TRCC itself.

(2) Fortunately the Senate made the right decision by killing this legislation and this agency.

TRCC dies, leaving questions

The often-criticized agency that oversees home building in Texas will be dismantled.

By Jennifer Hiller, San Antonio Express-News, 06/04/2009
http://www.mysanantonio.com/business/TRCC_dies_leaving_questions.html

As the legislative session wound down this week, lawmakers did not act to save the beleaguered Texas Residential Construction Commission from the state's Sunset process.

Now the decision — which many say is unlikely to be reversed in a special session — has consumer advocates, builders' groups, attorneys and even agency officials themselves scratching their heads over how the agency's death will occur.

No one quite seems to know how the TRCC, created in 2003, will close its doors or what happens to the homeowners and builders who are in the middle of the agency's inspection process.

“We've been an experiment since our creation, and we'll be an experiment in our demise,” TRCC Executive Director Duane Waddill said.

[HOT has described the TRCC as a "failed experiment." The Sunset Advisory Committee's staff report correctly noted that Texas is the only state in the nation with such a program. The agency's own quarterly reports show only ~12% success in resolving disputes, meaning they had an 88% failure rate. And legislation passed last session, which was supposed to improve that number, actually made matters worse. The success rate in 1Q 2009 was reported at ~10%.]

The 5-year-old commission long has been accused of offering more protections for builders than it does for homeowners.

Now the laws that push homeowners and builders into the TRCC's dispute resolution process and regulate home building will end Sept. 1. The agency has another year to wind down its operations.

The Sunset Advisory Commission staff last year recommended abolishing the agency, in part because of the inability of the agency to force builders to repair shoddy construction work. Homeowners were forced to go through the agency before going to court, but didn't trust it, the staff report said.

“No other regulatory agency has a program with such a potentially devastating effect on consumers' ability to seek their own remedies,” it said. And in 2006, an audit from the Texas comptroller's office branded the agency a “paper tiger” and said the agency shields builders from responsibility.

This session, lawmakers appeared ready to clearly outline the terms of the agency's demise and the applicable laws to guide consumers and builders in the future.

But Joey Longley, the Sunset Commission's executive director, noted that the bill died in conference committee.

The House had approved the legislation, but the Senate voted 17-11 to adjourn without passing it. The continued operation of the agencies that oversee transportation and insurance also were part of the so-called “safety net” bill and likely will be the topic of a special session. “Usually the statutes provide a little more detail,” Longley said. “In this case, we don't have that.”

Waddill said the TRCC's board will meet Wednesday to adopt a plan. Possible options include making the inspection and resolution process an optional one for consumers in the last year of the agency's existence or simply finishing out the 200 pending cases it has now.

“We're here and committed to getting them done and inspected as best we can,” Waddill said.

In September, Texas reverts to the pre-TRCC law, the Residential Construction Liability Act, which limited damages homeowners could seek and gave builders the right to repair poor construction.

[HOT: Eliminating the TRCC is just the first step in restoring consumer protections. The TRCC made things worse for homeowners by adding "extra" builder protections in the form of an expensive, time consuming, and builder-friendly inspection process. Once through that process, people still had to deal with RCLA. RCLA eliminated their ability to collect compensatory damages (e.g. your furniture or your health was ruined) or punitive damages, the ability to recover attorney fees, and the ability to share the cost and risk of a civil suit through a class action. Homeowners still face non-negotiable sales contracts and warranty agreements with mandatory binding arbitration (MBA) clauses.]

Previous case law had established an implied warranty of workmanlike construction and habitability in home building, San Antonio attorney Gary Javore said. But Javore said there was never a standard definition of what “workmanlike construction” meant. “Whoever had the more personable expert would win the case. Standards would change from case to case,” Javore said.

[HOT: Builders often testified that the TRCC defined warranty standards, but those standards greatly favored the builders and proved illusory in most cases because of the many exemptions, including defects caused by soil conditions.]

Alex Winslow, executive director of Texas Watch, advocated eliminating the agency, but also said the previous RCLA law offered inadequate consumer protection. He expects the Legislature will address the home building industry again.

“We got the agency out of the way and now can start with a fresh slate in the next session,” he said. “We can create a process or agency so that builders are held accountable and homes are built right the first time. The TRCC never really served those goals,” he said.

In the short term, though, things are murky.

“We're already hearing from homeowners and consumers,” Winslow said. “They're confused.”

[HOT: Notice the tone that Winslow and Texas Watch uses now. Compare what he says to what they did, and then ask why. Texas Watch is known for opposing the TRCC, and their initial public testimony helped. But somehow they got co-opted by the builders and negotiated a "compromise" bill to save the TRCC rather than abolish it (HB 2295). This was done before public hearings were being held on alternatives to the TRCC. They then lobbied for the builder-backed bill, even though HOT proved how it would make things MUCH worse for consumers and embolden builders more. We frankly don't know whether to question their legal competency or motivations or both.]

Ned Muñoz, vice president of regulatory affairs and general counsel for the Texas Association of Builders, said many consumers benefited from the agency

“I think it's unfortunate that a lot of the consumer groups who were clamoring for the TRCC's demise will have nowhere to turn for these disputes,” Muñoz said. “Now all they'll have is costly legislation.”

[HOT: No - What's unfortunate is that big homebuilders spend millions to help shield them from accountability rather than policing their own industry, building quality homes, and addressing disputes directly. The costly legislation is what established RCLA and the TRCC in the first place, and of the consumers who testified, ALL of them wanted the TRCC abolished.] 

2009 Texas Legislature: Winners and losers

Extracted from article by Emily Ramshaw and Christy Hoppe, Dallas Morning News, 06/02/2009

http://www.dallasnews.com/sharedcontent/dws/news/texassouthwest/legislature/stories/DN-winnerslosers_02tex.ART.State.Edition2.50b3fc4.html

It was a legislative session without big winners. But if there's any consolation, it's that everybody lost something. Voter identification was lost. A transportation agency overhaul, including North Texas' big gas-tax priority, was lost. And during the five-day chubfest, a lot of time we'll never get back was lost. But even the biggest losers can find a silver lining:

...

Homebuilders

What they lost: The Texas Residential Construction Commission, long considered a protector of homebuilders' interests, is dead, after lawmakers failed to extend its lifespan. Homebuilder Bob Perry can't be happy, and neither can the lawmakers who count on his campaign contributions. Not even millions can buy love.

What they won: Thanks to a last-minute amendment, cities can no longer force homebuilders to install fire safety sprinklers in new homes.

TRCC solved builder's problems, not consumer issues

By Brad Woodard, KHOU, Channel 11 News, 05/27/2009
http://www.khou.com/news/local/stories/khou090527_mp_homebuilders_and_homeowners.22379253.html

HOUSTON –Buying a home is the biggest investment most people will ever make, but what happens if beneath the facade the house starts to fall apart?

Homeowners claim TRCC doesn't help

“The builders never come back to do the work. For five and a half years I've been going through hell,” said Dorina Corrente, homeowner. 

Corrente says for the last five and a half years, she’s had cracking walls, windows and floors. She also has a problem with mold.

“The doctor forbids me to stay in this house because of the mold,” Corrente said.

Corrente says she bought the home new, but has been at odds with the builder ever since. 

She claims she should have had some recourse through the Texas Residential Construction Commission (TRCC), but has not got the help she needed.

The TRCC was formed six years ago by the State Legislature for the purpose of regulating the home building industry and providing consumer protection for new home buyers.

“The TRCC doesn't know what they're doing. They favor the builder. They get money for the builder,” Corrente said.

Corrente isn’t the only one frustrated with the TRCC. John Cobarruvias, the head of the Homeowners Against Deficient Dwellings, claims the problems are ongoing.

“It was supposed to give us an easy, quick and inexpensive way to resolve a defect with a builder. It became so complicated and so costly that you need an attorney to work the process,” said Cobarruvias.

Cobarruvias also claims the TRCC was designed by builders to solve builders’ problems, and not the consumer issues. 

“They fooled us. They fooled everyone in 2003 to think this was good for the consumers. It's like Osama Bin Laden saying this is good for Homeland Security. You can't trust them,” Cobarruvias said.

Apparently state lawmakers agree. They recently voted to abolish the TRCC after the Sunset Commission concluded it was nothing more than a builder protection agency, with fundamental flaws that do more harm than good.

The Texas Association of Builders (TAB) doesn’t agree. They say that if the TRCC is eliminated the real losers will be the consumers who will now have nowhere to turn.

“Gone will be the mandatory warranties and building and performance standards that new homes must meet,” said TAB Executive Director Scott Norman. “With the regulatory structure over builders eliminated, no mechanism will prohibit bad actors from entering or staying in the homebuilding industry.”

[Sorry Scott, but your comments are deceptive at best. Not a single homeowner testified to keep the TRCC - not one. And reports from two state agencies said consumers would be better off by abolishing the TRCC. The mandatory warranties are far worse than the older implied warranty of habitability. Municipalities are still allowed to set building codes that are more stringent than the version the TRCC used. Your organization was trying to force a state-wide standard on out-of-date building codes and prevent municipal rule making. And about the "bad actors," the TRCC and builder-sponsored legislation only emboldens bad builders, making Texas a magnet for the worst of them, because there's no accountability. Abolishing the TRCC is just the first step, because Texas laws still greatly favor builders. Rather than prevent legitimate lawsuits against bad builders, your group might better serve your members by improving building quality to prevent the cause of disputes, making it as safe to buy new homes as used ones, and giving consumers a fair chance if disputes do arise.]

Homebuilder watchdog agency could close next year

WFAA-TV, Dallas/Ft.Worth, 05/26/2009
http://www.wfaa.com/video/wfaageneral-index.html?nvid=365176&shu=1 

The Texas Residential Construction Commission appears to be doomed. The agency was supposed to be a way for thousands of Texas homeowners to get their complaints against builders resolved. Instead, many homeowners felt they were being regulated instead of the builders.

[Alex Winslow of Texas Watch appears in this video and says, “Now consumers and builders and lawmakers can get together and start from scratch to build a process that will really help homeowners hold builders accountable and ensure that homes are built to the highest standard.”

Sorry Alex, but Texas Homeowners don’t need new ways to get builder complaints resolved as much as they need the cause of those complaints eliminated. As for starting from scratch, we learned a lot from watching Texas Watch and another group "get together" with the builders, showing less interest in eliminating the cause of defects and complaints and more interest in keeping the TRCC and making a mockery of licensing and mediation. The builder's "compromise" bill used the terms but could not help weed out or keep out bad builders or hold them accountable. Instead, it would have made matters far worse for homeowners by giving them a false sense of security. So why, we ask, would you support legislation that was bad for consumers and fight alternatives that were good? And why did you not support the consumer-friendly legislation that HOT submitted? HB 2243 was based on proven regulatory oversight in 28 other states that have licensed builders for decades. It would have abolished the TRCC and established licensing under TDLR. Go figure.]

Sun sets on Bob Perry's builder commission!!!!

By John Coby, Bay Area Houston, 05/22/2009
http://bayareahouston.blogspot.com/2009/05/sun-sets-on-bob-perrys-builder.html

According to Harvey Kronberg's Quorum Report the sun is about to set on Bob Perry's Texas Residential Construction Commission.

Sen. Glenn Hegar told reporters that he’s inclined to allow the Texas Residential Construction Commission to be phased out under the state’s Sunset process because lawmakers were unable to reach a compromise on how to keep the agency functioning.

Hegar, a Katy Republican, is carrying the catch-all Sunset bill that’s pending in the Senate to cover those agencies whose Sunset bills die during the waning stages of the session. The TRCC Sunset bill did not get a hearing in the Senate Business and Commerce Committee.

Needless to say, this is a HUGE step for the home buyers in Texas and an embarrassing blow to Bob Perry and the home building industry. But, it is also a very beautiful sunset!!!

Ill-fated Texas Home Builders Commission to be Abolished

Texas Legislators lets the sun set on the Texas Residential Construction Commission

For immediate release

Austin, Texas – May 22, 2009 – Consumer groups across Texas are rejoicing over the decision by Texas Legislators to abolish the ill-fated, 6 year old, Texas Residential Construction Commission (TRCC trick).

According to John Cobarruvias of Homeowners Against Deficient Dwellings "The TRCC was nothing but a builder protection agency shielding builders from being held accountable for construction defects. This is a great day for consumers in Texas".

In 2003 the Texas Legislature passed the Texas Residential Construction Commission Act, creating a Commission to regulate the home building industry and provide consumer protection for new home buyers. Six years later the Texas Comptroller’s Office and the Texas Sunset Commission have called for the abolishment of the TRCC. As the reports stated, the Commission is nothing more than a “builder protection agency” with “fundamental flaws that do more harm than good”.

"Much credit goes to the new consumer organization, Homeowners of Texas, who worked hard to convince lawmakers that like a new home with a severely flawed foundation, the TRCC could not be repaired. HOT should be commended for their hard work on behalf of the consumers of Texas." says Cobarruvias

According to the rules of the Sunset Commission the sun will slowly set on the TRCC with operations winding down over the next few months.

For more information contact:

·           John Cobarruvias, Homeowners Against Deficient Dwellings, Houston 281-536-2457

·           Tom Archer, President Homeowners of Texas Austin 512-970-8817

###

Homeowners Against Deficient Dwellings

C/O John Cobarruvias

14646 Cardinal Creek Ct

Houston, Texas 77062
http://bayareahouston.blogspot.com/2009/05/ill-fated-texas-home-builders.html

Senate votes to close building agency

The Associated Press, Dallas Morning News, 05/24/2009
http://www.dallasnews.com/sharedcontent/dws/news/texassouthwest/legislature/stories/DN-dome_24tex.ART.State.Edition1.50a2f55.html

The Senate voted Saturday to disband a state agency that was created to settle homebuilding disputes but has increasingly been criticized as anti-consumer.

The Texas Residential Construction Commission was already headed toward closure because of complaints that it was ineffective in helping homeowners get builders to address defects.

The Senate vote to close the agency on Feb. 1 doesn't kill off the agency yet. House members may try to revive it before the legislative session ends June 1.

A state review commission recommended last year that the homebuilding commission be abolished because consumers didn't trust it to protect them from unqualified builders. Consumer groups have argued the agency did more to protect builders than consumers and limited homeowners' legal recourse in disputes.

READER COMMENTS:

Posted by johncoby

If you want to know why this commission was put out of its misery, take a few minutes to read http://bayareahouston.blogspot.com/2009/05/why-did-texas-residential-construction.html

Posted by 1ab2cd3ef

Close it. Consumers can and should do their own due diligence before hiring a contractor. We do not have effective laws to prevent the crooks from getting in or staying in business, so this commission is useless.

Posted by HoTexas

Homeowners of Texas (HOT) opposed this agency from day one. We brought knowledge of the law and legislative process and would like to thank JohnCoby (Homeowners Against Deficient Dwellings), Rep. Leibowitz, and the senators who listened to overwhelming public outcry against the TRCC and voted to shut it down. We are thrilled with the outcome but disappointed that two other consumer watchdog organizations sold out early on and started negotiating with builders on a “compromise” that would have made the TRCC even worse for consumers. Maybe it takes an attorney to understand the legislation as the builders wrote it and find the landmines. The Sunset bill that would have kept the agency was written to “look” like it was filled with new consumer protections, but an in-depth analysis found most of those provisions to be illusory or downright deceitful. We’re just starting to update www.homeownersoftexas.org to reflect this vote.

Highlights Saturday from the Texas Legislature

Associated Press, Houston Chronicle, 05/23/2009
http://www.chron.com/disp/story.mpl/ap/tx/6438743.html

___

CONSTRUCTION COMMISSION

The Texas Senate voted Saturday to disband a state agency that was created to settle homebuilding disputes but has increasingly come under criticism as anti-consumer.

The Texas Residential Construction Commission was already headed toward closure because of complaints that it was ineffective in helping homeowners get builders to address defects.

The Senate vote to close the agency on Feb. 1, 2010, doesn't kill off the agency yet. House members may try to revive it before the legislative session ends June 1.

Created in 2003, the agency administers the State Inspection Process, which is designed to resolve disputes between homeowners and builders before either party may pursue legal action.

The agency was praised by the industry for establishing standards and warranties for home construction, and for creating a process to resolve disputes between builders and buyers out of court.

But a state review commission recommended last year it be abolished because consumers didn't trust it to protect them from unqualified builders. Consumer groups have argued the agency did more to protect builders than consumers and limited homeowners' legal recourse in disputes.

Texas Senate votes to disband homebuilding agency

Associated Press, Houston Chronicle, 05/23/2009
http://www.chron.com/disp/story.mpl/headline/metro/6438734.html

AUSTIN — The Texas Senate has voted to disband a state agency that was created to settle homebuilding disputes but has increasingly come under criticism as anti-consumer.

The Residential Construction Commission was already headed toward closure before Saturday’s vote because of complaints that it was ineffective in helping homeowners get builders to address defects.

The Senate vote to close the agency on Feb. 1, 2010, doesn’t kill off the agency yet. House members may try to revive it before the legislative session ends June 1.

[HOT: Based on our analysis at the top of this page, we pronounce the TRCC dead and consider any attempt to revive it extremely unlikely.]

Created in 2003, the agency administers the State Inspection Process, which is designed to resolve disputes between homeowners and builders before either party may pursue legal action.

READER COMMENTS [Notice again that none of the readers support keeping the agency.]

truetexanfan wrote:

At least they are doing something about this worthless agency. It was bought and paid for by the Bob Perrys and David Weeklys of the world. They were sick of juries telling them to actually back up their "warranties" so the Repubs created them an agency to screw homeowners. This is what you get with tort reform.

This agency needed to be terminated yesterday.

Mudkat wrote:

This state agency should never have been legislated into being in the first place. It was lobbied, staffed, and even funded into being by developers, in reaction to outraged Texans having nowhere to go to have their grievances over poor workmanship of newly built homes addressed. It was a literal version of the fox watching the henhouse, where homeowners were put on a treadmill of bureaucracy, finding little, if any, redress. Good bye! Good riddance! 

Rerun wrote:

Anyone really know about this agency? Well, if you don't, they levy fines against unscrupulous home builders who screw buyers. Then, the people who got screwed in the first place find out that this agency's fines on the builder are paid ahead of the injured party receiving any compensation.In the end, if any money is ever recovered, it goes to pay this agency fine and people never see a dime.

CPP wrote:

Sounds like a dartboard to protect the builders.

Stuwillie wrote:

Most bogus award goes to: Residential Construction Commission. Award presented by Rick Perry, soon to be ex-governor and potential convicted felon for crimes committed in the name of greed.

WJBushSr wrote:

This is nothing more than a lobbyist's front.

It only protected the builders who gave cash to it's members. The very thought that it was there to protect the little guy is ridiculous.

I'm glad to see it go, and I wish they would clean up more of these agencies.

JohnCoby wrote:

I wrote a paper for a conference in California about the TRCC. If you want to see just how absolutely horrible this Commission was, take a look at: http://www.box.net/shared/0ar305n10t

X15 wrote:

The agency was a good idea that just needed some problems worked out. The people that hated this law were the plaintiff's attorneys. It cut into their ability to fan a fixable problem up into a law suit. If u have a minor defect with your home and do not possess the money to fund a plaintiff attorney by the hour then you will also be losing this protection when it is gone. You could always sue, this was an added layer of protection.

fool wrote:

The RCC was a joke from the beginning. It was a way to give legal imprimatur to what was essentially the standard homebuilders warranty that promises nothing and fixes responsibility for nothing.

You want to improve the quality of homebuilding in Texas?

1) Enact a statewide residential building code based on the 2009 International Residential Code.

2) Repeal the law that prohibits counties from establishing building code enforcement.

Now, consumers, understand this: Housing prices WILL go up as the cost of quality construction gets passed onto the consumer. BUT you'll have better homes, less burdening of the civil legal system in homeowner/homebuilder disputes, and your home will retain its value when you want to sell.

The TRCC was an attempt by the Homebuilders Association to circumvent this. They'd rather build you a CHEAP house that has inherent problems. Don't ask me why. That's just the prevailing attitude among rank-and-file homebuilders in Texas.

TrueTexanFan wrote:

"The agency was a good idea that just needed some problems worked out. The people that hated this law were the plaintiff's attorneys. It cut into their ability to fan a fixable problem up into a law suit. If u have a minor defect with your home and do not possess the money to fund a plaintiff attorney by the hour then you will also be losing this protection when it is gone. You could always sue, this was an added layer of protection."

Here we have the typical Repub response. Blame the attorneys and flat out ignore the truth. Perry/Weekley etc... were sick and tired of juries telling them to back up warranties and build the homebuyer a decent house. The Repubs gave them an agency whose sole purpose is to frustrate and screw the homebuyer.

CD4 wrote:

Bob Perry must have forgotten to keep up his monthly payments to the Texas legislators.

JohnCoby wrote:

X15 wrote: "The agency was a good idea that just needed some problems worked out. The people that hated this law were the plaintiff's attorneys. "

WRONG! The trial lawyers didn't do a thing to stop this commission. The consumer organizations did. Gosh, at the very least know what you are talking about before you open your pie hole.

[HOT: We opposed the TRCC from the beginning through its end. Unfortunately we not only had to lobby against the Texas Association of Builders and their allies, but we also had to do battle with two other consumer organizations that “negotiated” with the homebuilders and supported their legislation early in the legislative process. It is extremely disappointing that these two organizations claimed to represent consumers but were actively supporting the 6-year extension of this nightmare for Texas homeowners.] 

PinyWoodsRooter wrote:

Every once in awhile, the Lege does something right. Good job Senate!

HornTex wrote:

Perry killed asbestos claims for workers suffering and dying from asbestos in this state with his tort reform rhetoric. Maybe he would have thought different of it if he had to walk around with an oxygen bottle strapped on his side so he could breathe or maybe even visit some of those suffering with it. I've had friends who died from it and some who are suffering today and never received compensation for their lives being damaged.

BillofRights wrote:

As an attorney I have actually represented a homebuyer in front of this agency. In that case the Commission actually held the builder's feet to the fire and made him make repairs to his shoddy workmanship. Maybe we just got lucky.

Granite wrote:

Thank you legislators. TRCC has been a money grabbing waste from the beginning.

CAD1936 wrote:

A good step in the right direction. Now let's get rid of the Texas Supreme Court that acts the same as this agency did. Paid for by the same people. Consumers just might get a fair chance again. All we want is a level playing field.

CheeryEyed wrote:

BillofRights wrote: As an attorney I have actually represented a homebuyer in front of this agency. In that case the Commission actually held the builder's feet to the fire and made him make repairs to his shoddy workmanship. Maybe we just got lucky.

The point of the agency is to prevent the need for a lawyer, to make sure that the homebuyer's rights are protected without forcing the homebuyer to pay thousands of dollars for someone to secure the rights for them.

DA_kid wrote:

fool wrote: The TRCC was a joke from the beginning. It was a way to give legal imprimatur to what was essentially the standard homebuilders warranty that promises nothing and fixes responsibility for nothing.

You want to improve the quality of homebuilding in Texas?

1) Enact a statewide residential building code based on the 2009 International Residential Code.

2) Repeal the law that prohibits counties from establishing building code enforcement

_____________________________________________

While I agree that the commission needed to go away, I am VERY leery of any additional legislation to "improve quality", if for no other reason than to limit red tape as much as possible. In many jurisdictions the local code is more stringent than the IRC. And in fact, I don't know all the ins and outs of the IRC, but to require consistent code across a state as large as Texas would be wasteful. Do homes in Midland really need hurricane-strength wind bracing? Are there bad builders out there who need to be put out of business? Yes. Are there good builders who have lapses in quality and need to held accountable? Yes. But consider this: one of the several reasons that Texas has largely avoided the bubble and collapse of the real estate market is because builders have been able to be a little more nimble in building (or not building) product. More legislation means more red tape. More red tape means further out build schedules, and longer build schedules mean an industry that cannot react to the market in a timely manner. If you want to experience more dramatic swings in real estate values, legislate more. I don't have any figures to back me up, but my assumption is that if you look at the ratio of satisfied buyers to buyers who had a legitimate beef, it would run in the very high 90's percentile.

pwk25 wrote:

Hurray!!!! May this useless commission eternally rest in the junk heap of never should have been started state agencies. As a small independent contractor I had to attend some of the continuing education classes and they had to be one of the biggest wastes of my time and money since I started my business 25+ years ago.

smk2000 wrote:

If it wasn't for lawyers and insurance companies the U.S. would still be an economic power. Neither one produce anything but money for themselves

TrueTexanFan wrote:

"If it wasn't for lawyers and insurance companies the U.S. would still be an economic power. Neither one produce anything but money for themselves"

If it wasn't for lawyers, there might not be a USA. A lot of the men that signed the Declaration of Independence were lawyers.

_CoolBear_ wrote:

BillofRights wrote: As an attorney I have actually represented a homebuyer in front of this agency. In that case the Commission actually held the builder's feet to the fire and made him make repairs to his shoddy workmanship. Maybe we just got lucky.

________________

Well your client had YOU to represent them! I would have hoped that with this Commission a homeowner would have been able to get the problems taken care of without having to cough up money for an attorney. ...just sayin'

TwoBe wrote:

What this agency really needed were true consumer advocates, several of them.

The #1"consumer advocate" was indeed a builder. Believe it or not.

[HOT: While attending the Texas Association of Builders' rally day at the Capitol, we interviewed several builders. All but one supported our recommendations for builder education and licensing.]

No large scale production builder was hit with a fine or really made to make corrections to fix defects.

I have had numerous go rounds with TRCC and the frustration of holding a builder accountable for their shoddy work proved fruitless.

I have been involved with this agency from the beginning.

Inspectors would come out, judge for the homeowner only to get that judgment overturned after the builder called and whined, leaving the homeowner back to square one.

Why waste millions of taxpayer's dollars when little to nothing has worked.

Would I like to see an agency oversee the building industry? Absolutely, but not loaded with those who protect the same ones causing the problems. Put proficient inspectors on board, place real consumer advocates to head the agency, have laws in place so that builders who will not do what is needed to correct a defective home will have to stop building. Lots of good things could have been done with TRCC but they chose not to implement what they could have. The excuse of TRCC still being a baby agency is ludicrous. They were out of the crawling stages a long time ago and they could not stand on their own.

Make sure you read JohnCoby's paper. It is really like a believe or not.

And do visit Homeowners Against Deficient Dwellings and Homeowners for Better Building to get the full picture of this problem.

As for my builder, I found this company through the BBB, OMG!!

Worst mistake I ever made.

BurnedOnce wrote:

Its gettin to where an "honest" conman can't make a good living anymore! Might actually have to work for a change.

Panel that took homeowner heat likely won’t survive

By Janet Elliott (janet.elliott@chron.com), San Antonio Express News, 05/23/2009
http://www.mysanantonio.com/news/politics/texas_legislature/Panel_that_took_heat_from_homeowners_likely_wont_survive.html

AUSTIN — The Texas Residential Construction Commission, highly criticized by the homeowners it was meant to protect, appears headed toward its demise because Senate lawmakers don't have the votes to keep the agency alive.

The five-year-old commission repeatedly has been accused of offering more protections for builders than it does for homeowners, who were required to enter its inspection process before they could file suits against builders.

“I'll wave it good-by with a big smile,” said Janet Ahmad of San Antonio, president of Homeowners for Better Building.

Though the bill has passed the house, Sen. Glenn Hegar, R-Katy, sponsor of the Senate version, said Friday he expects his bill to die because he doesn't have enough support for the agency, which was recommended for abolition last year by the staff of the Sunset Advisory Commission.

“The (legislative) members have pretty well spoken, and it's probably in the public's best interest to do a systematic wind-down of the agency,” Hegar said.

Agencies that are abolished typically have one year to end their operations.

The author of the House bill, Rep. Ruth Jones McClendon, D-San Antonio, tried to build in some changes to protect consumers.

“Because we have made this a strong consumer-oriented bill, there are those who would not want to see this bill pass,” McClendon said.

[HOT: HB 2295 was far from a consumer-oriented bill. It had some consumer-oriented language, but it was filled with really bad stuff. Thank HOT for exposing the truth and getting enough votes to kill the bill.]

The TRCC was created in 2003 at the urging of home builders, who wanted a process to resolve disputes outside of court. But the agency lacked the teeth to force builders to repair defects or to compensate homeowners.

“Consumers that were clamoring for the demise of this agency will find themselves with nowhere to turn,” said Scott Norman of the Texas Association of Builders.

[HOT: Eliminating the TRCC removed a roadblock to resolving disputes, but the deck remains severely stacked against homeowners. Even if they aren't forced into binding arbitration by provisions of their non-negotiable sales contracts or warranty agreements, current laws prevent collecting compensitory or punative damages, recovering attorney fees, or sharing legal expenses with class action suits. Those are good things to attack in the next legislative agenda. If you'd like to help, let us know.]

The Sunset Commission staff report last year said the agency is “fundamentally flawed” and does more harm than good for consumers. The report said that only 12 percent of cases where the state had sent in inspectors to review alleged defects have resulted in a “satisfactory offer or repair or compensation over the life of the program.”

Tom Archer, president of Homeowners of Texas, said the Legislature listened to homeowners who told of being unable to get any help from the TRCC.

“Abolishing it would be the first step toward improving the quality of new homes,” he said.

Residential Construction Commission likely to be abolished

By Janet Elliott, (janet.elliott@chron.com), Houston Chronicle, 05/22/2009
http://www.chron.com/disp/story.mpl/metropolitan/6437815.html

AUSTIN — The Texas Residential Construction Commission, highly criticized by the homeowners it was meant to protect, appears headed toward its demise because Senate lawmakers don’t have the votes to keep the agency alive.

The 5-year-old commission has been accused repeatedly of offering more protections for builders than it did for homeowners, who were required to enter its inspection process before they could file a suit against builders.

“I’ll wave it good-by with a big smile,” said Janet Ahmad of San Antonio, president of Homeowners for Better Building.

Though the bill has passed the house, Sen. Glenn Hegar, R-Katy, sponsor of the senate version, said Friday he expects his bill to die because he doesn’t have enough support for the agency, which was recommended for abolition last year by the staff of the Sunset Advisory Commission.

“The (legislative) members have pretty well spoken, and it’s probably in the public’s best interest to do a systematic wind-down of the agency,” Hegar said.

Agencies that are abolished typically have one year to end their operations.

The author of the House bill, Rep. Ruth Jones McClendon, D-San Antonio, tried to build in some changes to protect consumers.

Lacking teeth

“Because we have made this a strong consumer-oriented bill, there are those who would not want to see this bill pass,” McClendon said.

The TRCC was created in 2003 at the urging of home builders, who wanted a process to resolve disputes outside of court. But the agency lacked the teeth to force builders to repair defects or to compensate homeowners.

“Consumers that were clamoring for the demise of this agency will find themselves with nowhere to turn,” said Scott Norman, executive director of the Texas Association of Builders.

The Sunset Commission staff report last year said the agency is “fundamentally flawed” and does more harm than good for consumers. The report said that only 12 percent of cases where the state had sent in inspectors to review alleged defects have resulted in a “satisfactory offer or repair or compensation over the life of the program.”

Tom Archer, president of Homeowners of Texas, said the Legislature listened to homeowners who told stories of being unable to get any help from the TRCC.

“Abolishing it would be the first step toward improving the quality of new homes built in Texas,” he said.

Just a war zone

Friday was a deadline for the bill to have been voted on by a Senate committee in order for it to be scheduled for Senate floor debate. Senate Business & Commerce Chairman Troy Fraser, R-Horseshoe Bay, said he didn’t schedule the bill for a hearing because builders and consumer advocates could not agree on what to do to improve the agency.

“It’s been a war zone the last two years,” said Fraser.