[highlights added] The Texas Residential Construction Commission should be abolished because it is ineffective and frustrates homeowners trying to get builders to address defects in their homes, according to a state agency review released Tuesday.

The commission, which was created in 2003, does not have the trust of the consumers to protect them from unqualified builders, according to staff of the Sunset Review Commission, which reviews the performance of state agencies and makes recommendations to lawmakers.

The report said the agency was flawed from the start and lacks the authority to force builders to correct shoddy work. The report also said the commission's standards for builder registration are so easy to meet that even shoddy builders can stay in business.

The standards do not require builders to demonstrate that they're competent or are financially sound - requirements that other construction trades, which are regulated by other agencies, must meet.

Other states have more rigorous licensing systems, the report said.

The commission said it "ardently disagrees" with the report and said deregulating the homebuilding industry is a bad idea, especially in a "receding housing market."

Homebuilders backed the creation of the commission. The industry praised the commission for establishing standards and warranties for home construction and for creating a process to resolve disputes between builders and buyers out of court.

Consumer groups have argued that the agency did more to protect builders than consumers and limited home-
owners' legal recourse in disputes.

"We need to scrap it," said Alex Winslow of Texas Watch. "Consumers need real protections against unscrupulous builders who build shoddy homes, and the TRCC has never provided homeowners with that kind of protection."

Duane Waddill, executive director of the construction commission, defended the agency as one that resolves disputes by helping homeowners get their repairs done while keeping businesses from having to pay fines.

A statement released by the agency said it has stripped or denied the right to operate of nearly 500 builders and remodelers in Texas.

Waddill said the agency will draft a written response to the report to be given to lawmakers for the 2009 legislative session.

"We were created to help consumers and builders and remodelers to resolve differences. That's what we've been doing," Waddill said.

The Sunset Commission staff said the TRCC "was never meant to be a true regulatory agency with a clear mission of protecting the public."

The agency administers the state inspection process, which is designed to resolve disputes between homeowners and builders before either party can pursue legal action.

The sunset report called it a lengthy and difficult process that frustrates homeowners. Despite recent attempts to strengthen the process with new penalties, the TRCC "still has no real power to require builders to make needed repairs," the report said.

The Texas Association of Builders said abolishing the agency would be a step backward for homeowners if they are forced to file lawsuits.

Abolishing the commission would throw homebuilding in Texas "back to a time when there was no regulation at all of the industry," said Ron Connally, a homebuilder in Amarillo and vice president of the builder's association.

Jim Vertuno, Associated Press
8/20/2008

Source: http://www.statesman.com/search/content/business/stories/realestate/08/20/0820sunset.html

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