[highlights added]

Hoses twist and snake through Jonathan Steiner's home.

The makeshift plumbing lines run beneath furniture, across the living room and into the garage, where they block that door from closing completely. Air conditioning leaks out while bugs crawl in.

The hoses were supposed to be a temporary fix when the plumbing system failed and sprung leaks all over the house.

That was more than two years ago.

After plumbers told Steiner the entire system needed replacing, the physical therapist couldn't get his builder to make repairs in his four-year-old brick home, located in the Woodridge neighborhood near USAA. So Steiner turned to the state agency the Legislature created to resolve disputes between homeowners and homebuilders.

It didn't help.

The Texas Residential Construction Commission agreed the builder is responsible for the plumbing fiasco, but the agency can't force the company to fix it.

That disconnect is one reason the Sunset Advisory Commission staff this month recommended abolishing the agency.

The TRCC is up for reauthorization by the Legislature next year. And the staff of the Sunset Commission, the legislative body charged with identifying and eliminating waste in government agencies, is the latest critic of the TRCC.

Homeowners have to go through the process before going to court, but don't trust the agency, 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.

Documents obtained under the Texas Public Information Act and interviews with more than four dozen San Antonio-area homeowners or their attorneys show a wide gulf exists between having the TRCC rule in a homeowner's favor and in actually getting a builder to repair shoddy construction.

Of the homeowners interviewed over the past 18 months, 27 people had builders who ignored needed repairs even after independent inspectors found construction defects in the home.

Just 14 people had their homes repaired or had settled with the builder.

A handful of homeowners were involved in lawsuits and were legally prevented from disclosing settlement terms or said they still were working through the dispute resolution process.

Three other TRCC decisions were unclear based on incomplete paperwork provided by the agency.

And three homeowners had a TRCC ruling that didn't find construction defects in their homes, although in one of those cases the builder made the repairs anyway.

Statewide, only 12 percent of cases where the state has sent in inspectors to review alleged defects have resulted in a “satisfactory offer or repair or compensation over the life of the program,” according to last week's Sunset Commission report.

“The remaining 88 percent of reported cases are pursued by one party or the other using the legal system - the very outcome the process was enacted to prevent,” the report said.“That's not a good batting average,” said Kendall County resident Joseph Bartoloni, who complained to the agency in 2006 when his builder would not repair problems or complete work on his custom home. He had to make the repairs himself. “I don't know how much the building community respects the TRCC. My builder blew it off.”

The process

The Legislature created the TRCC in 2003 as a way for homeowners and builders to resolve disputes without going through the expense of a lawsuit.

The TRCC registers homebuilders and remodelers, and provides homebuyers an online search tool for researching homebuilders.

Homeowners who have a disputes with their builders can't sue until they have tried the agency's dispute-resolution process, which involves putting any alleged defects in writing and having an independent inspector look at the house. If the builder or homeowner disagrees with the inspector, either can appeal to a TRCC panel.

But since its inception, TRCC has had no shortage of critics - and it's not just homeowners or consumer groups complaining about the agency.

In 2006, an audit from the Texas comptroller's office branded the agency a “paper tiger” and said the agency shields builders from responsibility.

Then there was last week's Sunset Commission recommendation.

“It didn't stack up,” said Joey Longley, the Sunset Commission's executive director, of the TRCC. “We really didn't see that you could fix it.”

The unlucky few

Thousands of people purchase new homes in Texas each year, and it's a happy transaction for nearly all of them.

The TRCC estimates just one-half of 1 percent of new homebuyers end up in the agency's dispute-resolution process.

Of the 600,000 new homes the agency has registered in the past few years, just 1,441 have gone through the TRCC process. The agency has 310 pending cases.

But for the handful of people who do have homes with construction defects that a builder does not address, the process can be like a race without a finish line.

[There are reasons why so few homeowners with serious problems report them to the TRCC. They don't trust the agency to broker a positive outcome and instead face lowered property values from reporting defects, since they must later disclose those "known defects" when they sell.]

Even attorneys have found themselves entangled. [As a result, few lawyers will take cases against builders, because the deck is stacked against them.]

County Court-at-Law Judge Karen Crouch spent more than five years battling with a contractor who walked off an extensive remodel of her Castle Hill's home. Crouch said the TRCC process causes delays that can give bad builders time to shield financial assets and prevents people from accessing the jury system.

“The process to me is inherently unfair to consumers,” Crouch said. “I would love to see them abolished. I think that would be the most wonderful thing ever.”

She was one of the first to go through the TRCC process, and she and her husband spent tens of thousands of dollars on home repairs and legal fees.

Earlier this year, they settled with the contractor for an amount that fell short of the expense of repairs and attorney's fees. “My husband still says we should have kept going. I said, ‘We need to take what we can get while we can get it,'” Crouch said.

Chad and Amanda Tenborg also settled with their builder for a fraction of what it would cost to make repairs to their house, figuring the builder had deeper pockets for a legal fight than they did. Chad Tenborg said the builder ignored the state inspector's repair recommendations.

“It's a slap in the face,” he said. “All they're in favor of is the homebuilder.”

Giving it ‘teeth'

Legislators in 2007 reformed the TRCC in hopes of fighting that perception.

The TRCC now can issue cease-and-desist orders to try to stop people from building homes or doing remodeling work if they repeatedly have refused to register with the agency or have let their registrations lapse.

It also can take disciplinary action against builders who refuse to participate in the dispute-resolution process with homeowners, or who fail to make a repair offer when a defect is found with their work.

Fines can be as much as $10,000 a day under the law.

[There's still no "teeth," because builders know that all they have to do is make a repair offer, even an unreasonable one. If the homeowner refuses a cosmetic repair and instead demands a fix of the cause (ex. foundation or structural problem), then their case is closed.]

Remodeling work worth more than $10,000 now also has to go through the agency's dispute-resolution process.

The building industry says the 2007 changes haven't been given a chance yet and could benefit homeowners.

Some of the new rules encourage builders to make repair offers quickly, and by doing so, avoid having their firm's name given the black mark of having built a “defective” home.

“It makes no sense to vaporize numerous homebuyer safeguards,” said Ned Muñoz, director of regulatory affairs with the Texas Association of Builders. “I think pulling the cord on the most readily available and cost-effective path to resolution is anything but constructive.”

To be or not to be

Abolishing the TRCC would return Texas to the days of unregulated homebuilding, Muñoz said.

TRCC Executive Director Duane Waddill also said the agency's new powers just were starting to bear fruit.

“We're starting to see really big changes,” he said. “Every day I get e-mails from people who say they have been through the process and their problems are getting resolved.”

Consumer groups say little of substance changed with the updates because the TRCC still lacks the authority to force a builder to repair a defective home. They also say the agency focuses too much on registering builders and collecting fees [as opposed to licensing].

“If you're going to force this kind of process on homeowners, there ought to be some sort of guarantee they can get their homes fixed,” said Alex Winslow, executive director of Texas Watch, a consumer advocacy group. “Homeowners are the ones being regulated. They're the ones being told what they can and cannot do.”

Michael Moore, president of the Greater San Antonio Builders Association, said abolishing the TRCC would benefit only attorneys.

“Before tort reform happened, trial attorneys were just eating our industry alive,” Moore said. “We wanted to do dispute resolution before it gets to court. Anybody who has had the misfortune of being in court knows it's a very expensive process and is pretty much only good for the attorney.”

Gary Javore, an attorney who often represents homebuilders, said the dispute-resolution process isn't perfect, but that it would be premature to abolish the agency.

“I'd like to see the Legislature set another Sunset (Commission review) in another three years, and let's see how the TRCC functions now that it's got these additional powers,” Javore said. “It's created an incentive for builders to be more proactive.”

Rep. Allan Ritter, D-Nederland, authored the bill that created the TRCC and said consumers without the money to hire attorneys would be left with no way to resolve disputes without the agency.

“The Legislature would be making a mistake by doing away with TRCC completely,” Ritter said. “Then you're back to nothing. That means my constituents that don't have the money or the power to hire attorneys or engineers have no place to go.”

[BULL! Even with the TRCC, homeowners with serious defect should have their own attorney, inspector and engineer to represent them during TRCC proceedings, because the builder will surely have theirs. Also, there are other ways to  reduce law suits besides using the TRCC to block homeowner access to the courts, but builders prefer the TRCC. The other options include a state-wide sales contract negotated with representation of builders AND homeowners, whicht eliminates the Manadatory Arbitration clause. HOT contends that Mediation, Arbitration, and the 3rd party TRCC inspection process should be optional to allow homeowners (or builders) to resolve disputes without lawsuits.]

Taking a toll

But some homeowners say the process is too slow.

Joseph Newton, an Air Force dentist, has a TRCC ruling in his favor and now is suing his builder over foundation problems.

“It has done nothing to quickly resolve the dispute, which is what the agency is supposed to do,” Newton said. “Absolutely nothing has been resolved. I built my house over three years ago and I can't believe it will be four years when we go to trial.”

But Newton is glad to have the state's inspection report to take to court.

“We have an independent person who will tell us the builder is at fault,” Newton said. “That's something good that came from all of this.”

[Just make sure the inspector is truly "independent" and not an agent of the builder. Because the builder will recommend a list of his perferred inspectors, you should be ready with your own list.]

Most homeowners say they felt validated to have a state inspector rule on their side, and some have been able to parlay that into a resolution.

Melissa Eldridge thought that going through the TRCC process helped her reach a settlement with her builder.

Eldridge's agreement prevented her from talking about the specifics of the settlement, but she and her family no longer live in the home, and they are building a new one with a different builder.

“I'm driving the builder crazy,” she said. “But they know what we've been through.”

Some homeowners give up after the dispute resolution process. They either can't afford an attorney to continue the fight or decide it's not worth the continued energy and expense.

A state inspector sided with Miguel Mendez when he had problems with water leaks on a balcony of his new home. Then his builder went out of business. Mendez figured a lawsuit would waste more time and money.

Mendez did the work himself. Then the flooring subcontractor turned up, threatening to file a lien against his house because the builder had never paid him.

“That had me more stressed out,” said Mendez, who paid the man $5,000. “It was a sore subject in my life. It was a difficult time, but we've been able to move on.”

For other homeowners the fight becomes a battle of wills. Leslie Firestone will go to arbitration in November after more than three years of trying to get the builder to address problems with her house.

“You get to a point in this whole process where you're in it so deep you really can't back out. You're sunk,” Firestone said. “You can't back out, or they win.”

What's next?

Steiner, whose home has the extensive plumbing problems, will head for an arbitration hearing with his homebuilder later this year.

Like many homebuyers, he signed a binding arbitration clause that prevents him from seeking a jury trial.

[HOT ADVICE: Get legal representation before signing ANY contract, because they're almost always written to protect the builder and not you.]

He has already spent tens of thousands of dollars for attorney's fees and plumbers. The kitchen has only hot water. The downstairs toilet cannot be flushed. And he said that his builder in a recent mediation session offered just $5,000.

“The arrogance of the builders and the failure of the TRCC and the Legislature to protect homeowners is unbelievable,” Steiner said. “This process has gotten me nowhere. I just want my life back.”

The TRCC will be fighting for its survival this fall.

The full Sunset Commission will consider the recent staff report at hearings Sept. 23-24 in Austin.

It will give its recommendation to the Legislature in mid-December.

Rep. Todd Smith, R-Euless, said the recent Sunset Commission report is powerful, but so is the building industry.

“You just can't deny that the agency was created originally with the significant backing of the building industry itself,” Smith said. “The political reality is you will not be able to move legislation that does not at least have the building community at the table. That is just the stark reality of politics in Austin. If they don't want to abolish the agency, I doubt very seriously the agency will be abolished.”

But public relations may demand change, Smith said, and those changes could reform the agency to better help consumers, especially those who have smaller claims against their builders and can't hire attorneys.

“I think the commission's stated purpose is laudable, and that's to provide consumers an alternative to expensive and time-consuming litigation with builders. There's nobody that's against that purpose,” Smith said. “The question is, are they accomplishing that objective?”

That's something the 2009 Legislature will have to answer.

READER COMMENTS:

1.        Tedsgmc  Yes! I do agree that this Texas Residential Construction Commission is bulls@#t! It is designed to protect the home builder from a "liability" lawsuit and allows home builders to do "what they want" when it comes to home construction. Just look at the "Mirisol Project". This is what you get when you allow "local jurisdiction(s)" to have "control" on building and fire codes in residential construction, because the home builder will only build a home to "standards" that THEY CAN "LEGALLY" "get away" with and if the "consumer" has a "problem" with their home they have to "play games" in order to have "problems" resolved. Plus they (the home builder(s)) know that cities and towns do not have the "resources" and "manpower" to "police" residential home construction.

2.         Tedsgmc Part 2. As I was saying if you look at how these home builders build homes, YOU WILL be "surprised" to see just how much a builder will "get away" with. The ONLY THING home builders CAN NOT “get away" with is the installation of smoke detectors in residential home construction that has been the law in the State of Texas since 1981. I personally had "problems" with my home that was built in Schertz in 2005 and only after I had contacted the Texas State Fire Marshal’s office that the builder had an electrician come and "reinstall" and "fix" the smoke detectors in the home, it seems that when they installed the "burglar alarm" system, they had "screwed up" the smoke detectors and as I had found out that was a N.F.P.A. and state fire "code" violation. And this and other "problems" existed with several homes built by the same builder in my neighborhood. It is time that the State of Texas takes "responsibility" for residential home construction and residential fire safety codes.  

3.         Tedsgmc Part 3 (last part) I can only get so much in each "part". Oh yes! as I said that the State of Texas needs to take more responsibility on these "issues", which is going to be a "hot" button issue when the 81st legislative session convenes in 2009, but YOU THE "CONSUMER" has the "power" to make Texas homes safer and "better" by contacting your senator(s) and the state representatives and "give them a piece of your mind", otherwise "problems" like these will continue and the State of Texas will just "pass the buck" Also one of the "problems" is that Texas ALLOWS "local jurisdictions" to "adopt" certain versions of the International Building Codes and National Fire Prevention Association (N.F.P.A.) standards, but the "local jurisdiction(s)can use whatever "version" they want, because Texas HAS NO state "building" codes and "fire codes" (only smoke detectors are "covered" by state law as I said in part 2. See what happens in 2009 and hopefully problems like these will be a "thing of the past" I personally want to see "better" fire safety standards in residential home construction, such as automatic fire safety suppression systems (sprinkler systems).You will be "surprised" and "amazed" at the life and "property" savings that sprinkler systems can do. 

4.         Thor  How can anyone be surprised about this? Texas and San Antonio have always been "builder friendly." Has anyone watched a lot of these new homes going up? I'm surprised that most of them last until what little of a warranty you get is up. 

5.         Johnrk  Don't build a home...buy an existing one and fix it up like you want. Arbitration in general is a JOKE, but the JOKE is mostly on the Applicant, not the Respondent. 

6.         Gingerbread    Just 2 words, skilled labor. 

7.         Janetahmad   The industry’s attempt to be experts on the subject of what is good for consumers is a hoax. Shame on the industry and its spokes person Brian Binash that claims an agency the builders bought and paid for is somehow good for the consumer. TRCC records show that the Steiner home featured in this article was built by Wilshire Homes whose president is Brian Binash as well as president of the Greater Houston Builders Association (GHBA), a board member of the National Association of Home Builders (NAHB), and Emerald Homes. TRCC records list the complaint as closed, yet the Express-News article vividly describes the impressive photo of Mr. Sheiner’s home two years after the complaint was filed against Wilshire Homes. “The hoses were supposed to be a temporary fix when the plumbing system failed and sprung leaks all over the house.” Mr. Binash writes a column in the Houston Chronicle on behalf of the GHBA. Recently upon learning of the Sunset Commission report recommends to abolish TRCC, Binash praised the agency, claiming it is good for consumers. Wilshire Homes is testimony that TRCC is bad for consumers and good for builders. Janet Ahmad, president of Home Owners for Better Building 

8.         Badpenny   The builders/developers own City Hall. Don't expect any relief from your local representatives. Write to your State reps. The lousy construction is immediately apparent. Many other of the developers' sins will show up later - such as, their wanton disregard for the recharge zone of the Edwards Aquifer, our sole water source. Their developments limit the ability of water to return to the aquifer and that that does is full of their development related poisons. They are only interested in making a buck despite the consequences. Their co-conspirators on the City Council are only interested in having these same people fund their next campaign - or perhaps their next vacation to Cancun. Where are the regulators and the media???? 

9.         Skywatch  This entire process is designed to keep the consumer from access to the courts. 

10.      Tedsgmc To JanetAhmad. Are you saying this to protect your "job" with the Home Owners for Better Building or with Wilshire Home Inc.? I am sure you and every builder will say anything to "cover-up" your problems. What you DO NOT realize is that when enough "consumers" of these homes get "p#$$ed-off" because they cannot get their homes "fixed" or the "builder(s)" want to play a "power game" with the consumer that’s when there are "problems" and most of them turn into "legal" problems for the consumer, I read your "post" and I got to tell you this all sounds like a "cover-up" to me. But you know this, don't you?  

11.      Tedsgmc  To JanetAhmad Part 2. As I was saying as well is that when the consumer "catches on" to this there in some "cases" there is a "element" of "deceptive or fraudulent practices" and here is a couple of questions for you JanetAhmad. Would you "trust" one of these "home builder(s)" to build you your "dream home" or would you "know" that the builder is building your "dream home" correctly? I'm sure you know that the majority of these home built in Texas are usually built as "cheaply" as possible and that include the "labor" as well. Would you "buy" a home that is built with $8.00 - $10.00 an hour labor?  

12.      Tedsgmc To Janet Part 3(Last part) As you read in my other post that I had "problems" with my home in Schertz, but after "sicking" the Texas State Fire Marshall's office on my builder I had my home "fixed" within 3 days and I am SURE the state fire marshal had a "good ol'e fashioned talk'in" to the builder, and the burglar alarm company, because the same electrician, burglar alarm company and the state fire marshal was over at several and almost all of the homes in my neighborhood,(or "sub-division") which is a lot of homes. Not to mention any other "problems" my neighbors had with there homes. 

13.      janetahmad  Tedsgmc, Perhaps you do not understand that Home Owners for Better Building (www.hobb.org) is a consumer advocacy grassroots not-for-profit organization. HOBB has been working for over 11 years to promote the restoration of consumer protect for new homebuyers, and regulate the currently unregulated homebuilding industry. There is a consumer movement it is here and now and “consumers are going to rise up in wrath and deliver a mighty blow to the industry…the patience of the American consumer is rapidly running out… And it will not be denied over an issue so fundamental as decent housing.” That mighty blow is to support the Abolishment of the Texas Residential Construction Commission (TRCC) the state agency bought and paid for by the builders for the builders. See the scathing Texas Sunset Commission Report that condemns TRCC and write state elected officials to Abolish TRCC. Janet Ahmad, President, Home Owners for Better Building. 

14.      benhurdog   Just six words: Rick Perry, Republican Controlled State Legislature. Send them a message. Do not reelect incumbents who are not friendly to consumers. Better yet, do not vote for any incumbents. 

15.      neveragain  We have several issues at hand. Texas probably has hundreds if not thousands of victims with defective homes and only a few speak up. They wait for everyone else to do the work for them. Every last victim should step up to the plate and let everyone know your story. Get on both the HOBB and HADD forums. File your complaints!! Get to know who has been involved in continuing the charade of a consumer protection agency; who gets contributions from the builders. We have elected officials from both parties collecting chunks of money from them. Get politically active. I cannot stress this enough. I know it is hard for some but don't forget the people running will be the lawmakers for Texas. Let them know your plight, send them articles and stories dealing with this horror and what happens to people just for buying a new home. Write your local paper, if they won't publish your editorial put it on HOBB and HADD. They will be glad to have everyone view it. Do something but don't be like Mr. Binash and whine and think you are going to get anywhere!!! 

16.      Pokerfan  If someone from HOBB offers to help, run don't walk. While they can certainly get builders' attention, they won't advise you to resolve your issue so they can continue to use you as their poster child. I have known of this group for a long time, and everyone who has ever worked with them always arrives at this conclusion. It is unfortunate, as they could be very effective without their leader's own personal agenda. Run, don't walk. 

Jennifer Hiller, San Antonio Express-News
08/31/2008

Source: http://www.mysanantonio.com/news/Housing_remedy_not_always_sure_cure.html

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