Homebuilders learn of law changes (see comments)
Speaker claims end of TRCC leaves no protections

By Justin Zamudio, San Angelo Standard-Times, 5/12/10
http://www.gosanangelo.com/news/2010/may/12/homebuilders-learn-law-changes/ 

Ever-changing legislation alters codes and procedures all builders must follow when constructing a house.

Providing a refresher course for all the up-to-date changes, Scott Porter, an International Code Council-certified inspector, spoke to a room full of homebuilders, contractors and other partners in the construction industry at the monthly Home Builders Association luncheon on Wednesday.

Porter focused on the recent changes homebuilders will experience with the sunsetting last September of the Texas Residential Construction Act and the commission that oversaw it.

“The removal of the TRCC leaves the homeowner and homebuilder extremely unprotected in the county,” said Porter, who also is a former TRCC commissioner of the TRCC. That body was charged with making sure all homes were built to the standards of the International Residential Code, which ensures that a home goes through a number of inspections and procedures.

“What happens because the act expired is the statutory warranties expired, the performance standards expired, the fact you have to build to the codes to the county expired and the provisions also expired.”

He said plaintiff attorneys killed the TRCC act because construction defense [defect???] litigation was down 80 percent since TRCC started in 2003.

According to a Sunset Commission staff report, the TRCC was widely criticized for protecting the homebuilding industry more than the public. The report stated, “the TRCC was never meant to be a true regulatory agency with a clear mission of protecting the public ... it’s fundamentally flawed and does more harm than good.”

Porter, who also works with StrucSure Home Warranty - a company that provides insurance-backed structural warranties - aims at educating and providing information to various homebuilding organizations. He spoke favorably about HB 2833, which was passed by the Texas Legislature in 2009 and allows counties to require building code standards, inspections and notices for certain residential construction.

“Part of the TRCC is we required all homes in the state of Texas to be built to the IRC Code, but because that act went away, that went away too. So now in the counties, you can do what you want to - you could build a house upside down because it is not against the law,” Porter said.

After Porter’s presentation, HBA President Danny Aguero addressed three members of the Tom Green County Commissioners Court who were present and said the HBA was strongly in favor of the court adopting HB 2833’s provisions.

Precinct 4 County Commissioner Richard Easingwood said he would want to get together with some of the directors of the HBA board along with fellow county commissioners and iron out the details of moving to adopt HB 2833 for county building.

“The sunset of that bill (TRCC) took away the more qualified inspections,” Easingwood said. “It sounds like what the HBA is looking for is something that will provide assurance to the consumer and also at the same time, the homebuilder.”

HOT READER COMMENT:

TRCC SUNSET: Lawmakers would have kept the TRCC if it could be fixed, but a Sunset Advisory Committee staff report said the agency was widely criticized, didn’t truly regulate homebuilding, was fundamentally flawed, and did more harm than good. And Homeowners of Texas (HOT) exposed deception in the bill written to save it. See http://www.homeownersoftexas.org/TRCC-Eulogy.html.
 
LAWSUITS: Plaintiff attorneys didn’t kill the TRCC; homeowners and consumer groups did. Litigation was down while construction defects and abuse from unscrupulous builders was up, because the TRCC and forced arbitration kept homeowners from accessing the court system.
 
REGULATORY OVERSIGHT: The TRCC didn’t license or regulate builders; it only registered them, and anyone could register as a builder. That gave consumers a false sense of security. Without proof of competency and financial responsibility, Texas became a magnet for bad builders. Even good ones had to adopt bad practices to compete with builder who cut corners and hid behind laws put in place to protect them. Those laws created an environment where Homeowners couldn’t recover legitimate damages.
 
WARRANTIES: The TRCC replaced “implied warranty of habitability and good workmanship” with deceptive warranty standards that had exceptions such as “changes to the soil” (i.e. expansion/contraction with wet & dry spells) and “work performed or materials supplied by someone other than your builder/remodeler” (subcontractors). Gifted warranties shifted builder responsibility to 3rd parties and included binding arbitration clauses that further limited the legal rights of consumers.
 
BUILDING CODES: Building codes protect the health, safety and welfare of occupants, but Texas doesn’t ensure that homes are built to code. The TRCC didn’t do that but implied that it did, leaving buyers with hollow assurances. At least with the TRCC abolished, buyers know they must hire their own inspector and hope they find any concealed structural defects.
 
While Texas cities can adopt new building codes, hire inspectors that aren’t beholden to builders for repeat business, and require 10 or more inspections to truly ensure that homes are built to code; counties can’t do that. Counties have no rule-making authority, and HB 2833 only allows for three inspections using builder-hired inspectors: 

1. The foundation stage, before placement of the concrete; 
2. The framing and mechanical systems stage, before covering with drywall; and
3. The completion of residential construction. 

LEVEL PLAYING FIELD: HOT is a consumer advocacy that wants to work with reputable builders on legislative reforms that protect homeowners and provide a level playing field for dealing with contractors, insurance companies, lenders and service providers. The current lack of rules and enforcement (i.e. regulatory oversight) has led to market failures in a Free Market society where sociopathic corporate “bullies” (builders, banks, etc.) can’t lose but everyone else does.