Homeowners of Texas' Blueprint for TRCC Reforms

Homeowners of Texas, Inc. (HOT) submits the following recommendations in response to the request by the Sunset Advisory Commission for legislative and regulatory options to reform or replace the TRCC. The following are HOT’s proposals for a series of regulatory and legislative options and priorities and do not include operational details, which will be discussed at a later date during the legislative process.

Protect the Public; not the Practitioners

1. First do no harm, a premise of the Hippocratic Oath.

2. Change the Mission from “promote quality construction” to “protect consumers.”

3. Rename the Commission because the TRCC lacks public trust and has an image problem.

4. Restructure the Commission makeup with more public representatives.

5. Institute a true “Market-Driven” Consumer Rating System like AngiesList.com.

6. Improve Consumer Information with online access and an automated public information line.

7. Facilitate Consumer Surveys by unlocking homeowner data.

8. Replace the TAB sales contract, which includes an onerous Binding Arbitration clause.

9. Add a Q&A section to the TRCC website using Web 2.0 technologies.

Prevent Construction Defects (and the disputes they cause)

10. Require a License to practice construction trades, and provide the authority to grant and revoke.

11. Require more inspections during the construction process to find and fix problems earlier.

12. Improve state-wide building codes and standards and revise the Texas Engineering Practice Act.

13. Require geotechnical soil samples on all sites and/or stronger foundation standards.

14. Require 10 year archival of home and foundation plans by home builders and engineers.

15. Adopt “Best Practices.” California established its Contractors License Bureau in 1929.

Help Resolve Conflicts with Flexible Alternatives

16. Remove Legal Roadblocks. SIRP adds time & expense and stacks the deck against homeowners.

17.  Promote alternative resolution tools such as Ombudsman, Mediation, Arbitration and Jury Trial.

18. Keep SIRP as an option but not as a mandatory prerequisite to legal actions.

19. Require builders to carry insurance that covers liability and includes workman’s comp.

20. Require builders to provide home warranties that are state-approved and insurance-backed.

21. Establish a Victim Recovery Fund for unforeseen situations.

22. Establish a Homeowner’s Bill of Rights, similar to the Lemon Law we have now for cars.

Sunset Staff Recommends Abolishing the TRCC

HOT presents this summary of the Sunset Advisory Commission staff report, which took the unusual step of recommending that legislators abolish a state agency, the Texas Residential Construction Commission (TRCC).

• Consumer Distrust: The report concludes that the TRCC is "fundamentally flawed" and should be entirely abolished because it has caused widespread harm to consumers by protecting builders from accountability and failing to protect homeowners while denying them timely access to the courts.
  
• Diminished Access to Courts: A Texas homeowner who has purchased or built a defective new home and cannot get the builder to repair the home is prohibited by state law from suing the homebuilder before first going through the State Inspection & Resolution Process (SIRP). According to the Staff Report, the average time to process SIRP requests is 147 days (almost 5 months), and if the homeowner repairs the defects while the inspection request is pending, the case is then administratively closed.
  
• No Enforcement: Once the State Inspection Process is complete and a defect is confirmed, the Commission lacks authority to ensure that confirmed defects are repaired. If a builder repeatedly refuses to submit an offer to repair, the Commission can take administrative action against the builder, but so far, the TRCC has not used this authority.
  
• No Licensing: In Texas you need a license to drive a car or catch a fish, and a license is needed by your barber, tow truck operator and tattoo, but not your builder. 28 states license homebuilders, including 10 out of 13 southern states. Texas, Oklahoma and Kentucky are the only southern states that don’t license homebuilders.
  
• Registration vs. Regulation: The TRCC only requires builders to register, and they don’t have to prove that they have either a basic knowledge of construction or that they are financially sound. The reality is that the TRCC was created to protect homebuilders, not homeowners.
  
• Inspection Process: Since the TRCC opened its doors in early 2004 only 12% of all State Inspection cases have resulted in a satisfactory offer of repair or compensation. There is also no system in place for processing urgent cases involving habitability issues, such as structural problems, major leaks, or heating and air conditioning systems.

But the Sunset Advisory Commission wants More Options

During public hearings on 9/23/2008, the Commission asked their staff to present options for reforming the TRCC rather than abolishing it, asking that they first meet with key stakeholders. HOT met with staff on 10/16/2008 and presented these recommendations then.

HOT continues to work with the Sunset Commission staff and consumer groups, home inspectors, engineers and individual homeowners across the state to reform the TRCC from a “registration agency” that protects homebuilders into a true “regulatory agency” that protects the public by licensing and regulating residential construction.

HOT TRCC Blueprint Details

Our approach is to propose, and to get agreement on, a set of design options (Blueprint for TRCC Reforms) before getting mired in the details. This is like an architect that gets agreement on floor plans and elevation options before doing detailed work on foundation design, roof trusses and permitting. We started by first questioning the overall objectives, i.e. what problem are we trying to solve.

Promote Quality Construction

The stated mission of the Texas Residential Construction Commission is to promote quality construction for Texans by registering industry members and residential construction projects [Registering doesn’t accomplish this.]; providing information and educating homeowners [TRCC “blocks” access to complaints and registration info.] and the residential construction industry [The 1 hr/yr continuing education requirement was fulfilled with “Shifting the risk to limited warranties.]; acting as a resource for complainants [SIRP adds legal barriers, time, cost and probable loss of property value because of disclosing defects.]; and offering a neutral, technical review of alleged post-construction defects [But homeowners will need their own legal, inspection and engineering counsel to overcome those surely representing the builder.].

Sunset Staff correctly concluded that the TRCC was not upholding its mission, saying:

• The TRCC “was never meant to be a true regulatory agency with a clear mission of protecting the public; [The Sunset Commission criticized Staff for evaluating it as one.]
  
• The TRCC “fails to provide meaningful oversight and public protection because of fundamental flaws in the current regulatory approach;”
  
• The TRCC “is not designed to ensure that only qualified persons can enter the field – the only way true regulatory agencies work – and so does not work to prevent problems from occurring;”
  
• “No other regulatory agency has a program with such potentially devastating effect on consumer’s ability to seek their own remedies;”
  
• “Homeowners do not trust the SIRP to help fix defects in their houses;” and
  
• “Anything short of a true regulatory program does more harm than good, and should be abolished; ”

Note the continued reference to the word “regulatory.”  HOT agrees with the Sunset Staff’s recommendation to eliminate an agency that registers but does not regulate the homebuilding industry.  Abolishing the TRCC would NOT deregulate the homebuilding industry in Texas because this industry has NEVER BEEN REGULATED in our state.  HOT strongly advocates the regulation of the homebuilding industry in Texas and other reforms to our current laws which, adopted at the behest of powerful industry lobbyists, have effectively abolished legal accountability for the residential construction industry while eliminating timely legal remedies for homeowners with defective homes.

Just as with the finance industry, homebuilder deregulation that eliminates accountability can bring unforeseen consequences such as encouraging dishonesty, attracting unscrupulous builders, and making problems worse. That’s why we believe that implementing regulations that prevent construction defects is the best way to address the cause of lawsuits.

Historical perspective of Texas Residential Construction Legislation:

• DTPA – Prior to 1989, the Texas Deceptive Trade Practices – Consumer Protection Act offered consumers protection against builder fraud and deceit by allowing punitive damages, the ability to recover attorney fees, and the ability for consumers to band together in class action suits to share the high legal costs of challenging big builders with extensive resources.
  
• RCLA – In 1989, the Residential Construction Liability Act removed some of those consumer disputes. Abolishing the TRCC would revert back to RCLA unless something else is put in place, and because that arguably would be a step backwards, the Sunset Commission has recommend fixing the problems with TRCC instead.
  
• TRCCA – The Texas Residential Construction Commission was established in 2003 to replace RCLA and functions as a “registration” agency and not a “regulatory” one. This gives homeowners a false sense of protection and has led to a general mistrust of the agency and government, which in many cases makes matters worse. At the same time, the Implied Warranty of Workmanship and Habitability was replaced by a “Limited Warranty” that attempted to provide clearer definitions but actually seems written to favor builders.

We then developed a set of recommendations grouped by three categories:

1. Protect the Public; not the Practitioners;
2. Prevent Problems (and thus the conflicts they cause); and
3. Help Resolve Remaining Conflicts with Flexible Alternatives

Protect the Public; not the Practitioners

We agree with the Sunset Staff that, “Protecting practitioners is not the rationale for involving the power of the State, nor is it the benchmark for evaluating the need for regulation. Rather, unless otherwise specified, the need for regulation centers on protecting the public.”

1) First do no harm, a premise of the Hippocratic Oath. Because the Sunset Staff found “fundamental flaws that do more harm than good,” one option is to abolish the TRCC, but that still leaves consumers with RCLA, binding arbitration and limited legal remedies. So, “first do no harm” translates into “fix the TRCC and the problems it causes.”

2) Change the Mission.  The TRCC mission needs to expand beyond “promote quality construction.” A stronger mission would be to

“Protect consumers by regulating the construction industry through policies that promote the health, safety, and general welfare of the public in matters relating to construction.”

The TRCC can accomplish this mission by:

• Ensuring that construction is performed in a safe, competent, and professional manner;
• Licensing contractors and enforcing licensing laws;
• Requiring that any person practicing or offering to practice construction contracting be licensed;
• Enforcing the laws, regulations, and standards governing construction contracting in a fair and uniform manner;
• Providing resolution to disputes that arise from construction activities; and
• Educating consumers so that they may make informed choices.

3) Rename the Commission. Because the TRCC has an image problem and lacks public trust, consider renaming it.

4) Restructure the Commission makeup with more public representatives who have no builder ties and more representation from inspectors and engineers. Encourage participation from consumer advocacy groups with at least one public position on the board. Make terms of service shorter (e.g. two years). Each year have the Commission board elect a Vice-Chairman who will replace the Chairman in the next term.

5)  Institute a true “Market-Driven” Consumer Rating System like AngiesList.com to replace the Star Builder program. Allow homeowners to recommend builders and contractors and search by rating (e.g. 5-star vs. 2-star), # of years of experience, # of homes built (implies volume vs. custom), average cost of home (starter vs. mansion), average cost per square foot, specialties (green, energy star, accessible, build on your lot), # or % of complaints open & resolved, etc. With such a system the Market would decide how many stars a builder earns, not the TRCC, and such a system would be easier and less expensive to administer than the Star Builder program.

6) Improve Consumer Information. Allow homeowners to call an automated public information line 24x7 or go online to discover the status of a license and read complaints and recommendations. Builders can also use this information to find good workers and subcontractors.

The Commission says that homeowners can search the TRCC website by builder to see if they are registered, but there’s no useful information to help consumers pick a builder based on their reputation or performance record. And based on the large volume of homeowner complaints that our organization has received in just three months, we simply can’t believe TRCC posted information, which says Lennar Homes had only 12 confirmed defects among their 40,000 registered homes or that KB Homes had only 7 defects with 24,000 homes. Instead, we’ve seen entire neighborhoods affected by major defects that leave the homes uninhabitable.

7) Facilitate Consumer Surveys. With homeowner recommendations and complaints posted online, it becomes easier to do statistical surveys to help the Commission fine tune public policy. Today those records are hidden, even from Open Records requests, ostensibly to protect bad builders.

During Sunset hearings, builders testified that the low rate of complaints (0.5%) was proof that home defects are rare and that homeowners are happy. But the preponderance of the evidence suggests the level of TRCC Complaints reflects only a tiny fraction of the construction defects in new residential construction. 

The ability to survey homeowners about their experiences with licensees would confirm our belief that there is far more risk at stake for the homeowner in filing a TRCC complaint than the reality of any potential reward.  This is the case because:

• TRCC lacks enforcement authority;
• Homeowner will incur substantial time and expense in the SIRP process;
• Damage to defective homes will often increase and accelerate;
• If homeowners pay to repair the problem the case is closed; and
• Homeowner incurs the risk of reduced property values resulting from the public revelation that the home is defective.

8) Deregulate homeowners by protecting them from binding arbitration clauses that shield builders from lawsuits and limit homeowner access to the courts and other effective legal remedies. Binding arbitration is unconscionable since it is non-appealable, with a process that is heavily weighted in favor of the homebuilder, and the arbitrator(s) is neither a judge nor a jury but has more power than either of them. 

The widespread use of TAB’s sales contract is also unconscionable, as are the form contracts used by volume homebuilders, because they effectively preclude homeowners from negotiating terms. So, require homebuilders to use State-approved contract terms for the essential conditions establishing parties’ rights. Such terms are already part of real estate contracts when buying older homes and should apply to new homes as well. And since the State must approve the contract for homeowners insurance, it only makes sense that the State also approves essential terms of the agreement to build the home.

Home sales contracts are typically so complex that most homebuyers don’t understand what they are signing, have no negotiating power or input into the terms and conditions of these agreements, and are at the mercy of homebuilders. They have no ability to revise the terms even with legal representation. And the rights of the parties are established once the homeowner signs the contract. 

9) Add a Q&A section to the TRCC website using Web 2.0 technologies with the ability to submit or search on consumer experiences.

Prevent Construction Defects (and the disputes they cause)

Our approach to Tort Reform in Residential Construction is to prevent construction defects that cause disputes in the first place, starting with measures to ensure that practitioners are qualified and licensed.

10) Require a License to practice construction trades, and provide the authority to grant and revoke licenses. Once a license is pulled, put the burden of proof on the licensee to get reinstated.

In Texas you personally need a license to drive a car or catch a fish, and your barber, hair stylist, manicurist and tattoo artist need a professional license to practice their art. But your homebuilder doesn't need a license, and neither do the trades that install structural elements of your home such as the foundation, framing and roof.

Here's a partial list of occupational and professional licenses required by the State of Texas. The Legislature has determined that each of these professions are "of a complexity that consumers cannot adequately evaluate the appropriateness of the service or the qualifications of the practitioner."

• Acupuncturists (Texas Medical Board) 
• Air Conditioning Installers (Texas Dept of Licensing & Regulation) 
• Architects & Landscape Architects (Texas Board of Architectural Examiners) 
• Athletic Trainers (Texas Dept of State Health Services) 
• Auctioneers (Texas Dept of Licensing & Regulation)
• Barbers (Texas Dept of Licensing & Regulation)
• Body Piercing & Tattoo Studios (Texas Dept of State Health Services)
• CPAs (Texas State Board of Public Accountancy)
• Cosmetologists & Manicurists (Texas Dept of Licensing & Regulation)
• Dentists (Texas State Board of Dental Examiners)
• Doctors (Texas Medical Board) 
• Drivers (Texas Dept of Public Safety) 
• Electricians (Texas Dept of Licensing & Regulation) 
• Engineers (Texas Board of Professional Engineers) 
• Fishermen & Hunters (Texas Parks & Wildlife) 
• Interior Designer (Texas Board of Architectural Examiners) 
• Lawyers (State Bar of Texas) 
• Massage Therapists (Texas Dept of State Health Services)
• Nurses (Texas Board of Nursing) 
• Plumbers  (Texas State Board of Plumbing Examiners)
• Realtors & Real Estate Inspectors (Texas Real Estate Commission) 
• Tow Truck Operators (Texas Dept of Licensing & Regulation) 

So what's the justification of not licensing homebuilders, remodelers, swimming pool contractors, and framing, foundation, roofing and flashing contractors? After all, a home is usually the largest and most expensive investment a consumer will ever make, and a haircut costs just $20-50.

According to the Sunset staff report, “Builders are subject to the least restrictive form of regulation – registration.” Instead, we advocate licensing, “the most restrictive form of regulation, generally requiring some level of skill or education and the passage of an examination to demonstrate proficiency.”

• Licensing vs. Registration

LICENSING: “A license is permission to do something that otherwise is forbidden. In most cases, a license is required or mandatory for engaging in that activity. For instance, a driver’s license is considered mandatory to drive a car on public roads. An exception is that a house may be built by someone who is not a licensed contractor.

A license is given by the government, and is a government privilege. It therefore presumes that the activity in question is a privilege, not a right. The privilege may be bestowed by the federal, state, or local government.

A license involves the police power of the state. That is, if one violates the licensing law, either by acting without a license, or failing to uphold the rules governing the license privilege, one is subject to prosecution under the civil or criminal laws of the governing body.” 

REGISTRATION presumes that an activity is permitted by right and means one cannot be denied the opportunity to participate. It provides information to the public about the registrant, but it does not provide any controls. If those who register don’t follow the rules, then registration may be withdrawn. However, they may still participate in the activity without registration.

28 states license homebuilders, including 10 out of 13 southern states. Texas, Oklahoma and Kentucky are the only southern states that don’t license homebuilders. A factor behind some of the more recent licensing activity is fraud in the aftermath of big storms. Other factors include builder bankruptcy, insolvency, poor contract management, poor workmanship, and failure to repair defects.

California has been licensing builders the longest, since 1929, and Arizona has one of the strongest programs, which protects both homeowners AND builders and contractors. Builders can check the licensing status of subcontractors online to make sure they’re qualified. And if subcontractors don’t get paid, they can file a complaint and go after the builder’s license and bond.

• Licensing Prevents Lawsuits – By ensuring the competence and financial responsibility of construction practitioners in Texas, licensing would help prevent problems from occurring in the first place and thus help reduce the number of lawsuits.
  
• Who to license? We support TRCC Commissioner Mickey Redwine’s view that ALL builders should be licensed, including small ones and relatives you may hire to build your home. Even if builders build their own home, they should still need a license, and the home should still be inspected to meet codes, because that home will eventually be sold to someone else.

We also support Representative Ritter’s assertion that “every craftsman in Texas should be licensed, not just electric, plumbing and HVAC.” That would include remodelers, home inspectors, and foundation, framing, roofing, flashing and swimming pool contractors. We don’t accept the argument that “that’s too much change to handle at one time, so we won’t license anyone.”

License Inspectors too, because bad building practices and weak enforcement of standards pose serious health and safety threats. That's why we have building codes and inspectors. But even though many inspectors are highly competent and catch life-threatening code violations, others are often overworked, lazy, incompetent or corrupt, even hired by the same builder they are inspecting. And when unlicensed home inspectors are beholden to the builders who hire them, it’s too easy for them to overlook serious defects with impunity. 

Currently, real estate inspectors who examine older houses need a license in Texas, but the home inspectors who check new homes don’t. That’s unconscionable since serious defects in the construction process can be covered up by concrete foundations or walls and never discovered, until it’s too late.

• Who “not” to license? Licenses may be issued to individuals, partnerships, corporations or joint ventures but NOT Limited Liability Corporations, which are created to protect builders and others from liability for wrongful acts.
  
• 28 other states already have strong licensing and, just like driving a car, builders can be fined or arrested if caught operating without a license.

According to the U.S. Census Bureau, 53% (411,000) of ALL single-family housing starts in the U.S. during 2007 (776,000 total) were in the South, where 10 of the 13 states require homebuilders to be licensed. Texas, Oklahoma and Kentucky are the only Southern states that do not require licensing for homebuilders.

• License Prerequisites – Besides passing an exam and a criminal background check, licensed builders and tradesmen must be at least 18 years old, be insured and financial stable, and be able to read plans written in English. Training centers in other states can provide curriculum and course materials to help practitioners prepare for exam, or they can study on their own.

How do most Texas construction workers learn their trade today? It’s certainly NOT from construction trade schools, since there aren’t any in Texas like there are in other states.  “Education” today is through on-the-job training with little supervision or real instruction.  So is it any wonder that construction defects are so widespread in Texas? 

• Temporary Licenses – Just as with student drivers, a temporary Learner’s Permit could be issued while workers hone their skills and prepare for the tests. Temporary licenses could also be granted to out-of-state contractors doing emergency work, such as after Hurricane Ike. But in either case, a licensed contractor must be onsite at all times to supervise and take responsibility for the work of the temporary licensee or out-of-state contractor.
  
• Education Benefits – As with other professions, education and certification programs elevate the stature, respect and earning potential of licensed practitioners. Prerequisite and continuing education that covers building science, technical skills, estimating & proposal writing, project management, business acumen, and ethics & legal topics helps ensure the future success of these businesses. It also helps licensed practitioners compete with unskilled and unscrupulous ones and improves the quality and longevity of their work. Even Commissioner Jerry Garcia (a homebuilder) endorses mandatory homebuilder education, saying, “They have to be educated… and able to read a set of plans.”
  
• License Administration – What organization should administer the licensing requirement? Options include:
  
• • The TRCC because the agency’s employees already have a good understanding of the building industry and key stakeholders. But to restore public trust in the agency, a name change is recommended.
    
  • The Department of Licensing and Regulation because they understand license administration. The problem with this option is that the agency is so generalized and handles everything from barbers to tattoo artists, so resolve the issue by transferring key TRCC employees to that agency.
    
  • Create a new agency that can handle construction complexities and grow in size and scope as needed. Drivers’ license administration and medical licensing, for example, are placed in specialized agencies, and the same argument can hold for construction licensing.

11)  Require more inspections during the construction process to give builders and homeowners the opportunity to catch and fix problems before they are covered up, while they’re relatively easy to fix, and before moving to the next stage of construction.

12)  Improve state-wide building codes and standards. Revise the Texas Engineering Practice Act [Subsection 1001.056 (a) (2) (A)] to eliminate all exemptions for homebuilders.

13) Require geotechnical soil samples on all sites and/or engineered foundations with greater strength (e.g. L/480 vs. L/360). The problem we’re trying to solve here is to ensure the structural integrity of homes built on expansive soils that are so common in Texas.

14)  Require 10 year archival of home and foundation plans by home builders and engineers [and inspectors???], because it often takes several years for structural problems to show up. Put the burden of proof on the industry, not the homeowner, meaning that if plans are no longer available to prove proper engineering in a defect dispute, then the assumption is that it was NOT properly engineered.

15) Adopt “Best Practices.” California established its Contractors License Bureau in 1929 and has some of the most stringent licensing requirements. Each trade has different license classifications, including General Engineering Contractor, General Building Contractor, and Specialty Contractor, and general prerequisites include:

• Written Law & Business exam
• Specific trade exam (unless approved for a waiver)
  The prerequisite for taking a Contractor’s License exam includes, “must have at least four full years of experience at a journey level or as a foreman, supervisor, or contractor in the classification for which he or she is applying.”
• Financially Viable ($2,500 in operating capital)
• Contractors’ Bond or $
• $12,500 cash deposit
• Surety Bond
• Application Fees (~$400)
• Workers Compensation Insurance
• Disciplinary Bonds (if license revoked)

Available remedies include:

• Revoke License
• Suspend License
• Stay of Suspension (probation)
• Dismissal with No Penalties
• Injunction Against Unlawful Activity
• Criminal Charges

Help Resolve Conflicts with Flexible Alternatives

It’s important to note that the TRCC has no jurisdictional authority. It cannot, and should not, be put in the position of judge and jury to set blame and punishment. But that does not mean the TRCC can’t administer licensing as a prerequisite to practicing a trade, with the authority to revoke a license for good cause.

16) Remove the Legal Roadblocks. Because SIRP adds so much time and expense to dispute resolution and stacks the deck against the homeowner, few attorneys will even take a case against a builder. To remove this roadblock, the TRCC must implement measures to lower the cost and risk of filing complaints and suits. That can start with repealing the parts of RCLA that prohibit class actions and punitive damages and the ability to recover attorney fees. Doing this would also provide builders with a greater incentive to settle cases by repair and/or compensation.

17)  Promote alternative resolution tools such as Ombudsman and Mediation and make them optional.

The builders’ “right to cure” concept gives them the ability to offer numerous cosmetic fixes as opposed to fixing the underlying cause, thus wearing out the homeowner to the point that they just walk away exhausted and angry that they government didn’t protect them.

18) Keep SIRP as an option but not as a mandatory prerequisite to legal actions. Because TRCC Commissioners lack the legal training of attorneys and judges, the SIRP should not be binding and preclude other legal remedies.

19) Require builders to carry insurance that serves as a performance bond, covers liability and includes workman’s comp. The TRCC Act established a new “Limited Warranty” to replace the Implied Warranty of Workmanship and Habitability, and several Texas homeowners have testified that the result was far less coverage and actual protection. The reason so many builders now offer a prepaid Limited Home Warranty is because, at ~$300 onetime fee for a $100,000 policy, its coverage is nearly worthless, and it lets the builder transfer their warranty responsibilities and risks.

20)  Require builders to provide home warranties that are state-approved and insurance-backed and cover real defects over reasonable periods. But before deciding on minimum warranty coverage, first determine what defects actually occur, how often, on what type of land, and with what builders. This can be done with a homeowner survey. Alternatively, require enough insurance to protect homeowners from defects in the event that the builder skips town or files for bankruptcy.

21) Establish a Victim Recovery Fund for unforeseen situations such as where builders left the industry and their insurance expired before critical problems are discovered. Funding can come from license fees and builder contributions.

22)  Establish a Homeowner’s Bill of Rights, similar to the Lemon Law we have now for cars, which gives dealers a fixed number of tries to fix defects before being required to buy-back the car.