In 2003 the Texas State Legislature passed HB730, which created the Texas Residential Construction Commission. This Commission was to provide consumer protection for new homebuyers with construction defects, but based upon the 12 hours of testimony in the State Affairs Committee, it is clear the TRCC (pronounced trick) is a complete and total failure.
This opinion of the homeowners and consumer organizations in attendance, some testifying as late as 4:00 in the morning, is shared by the Texas State Comptroller who called for the abolishment of the Commission after a lengthy and thorough investigation. In response to the Comptrollers recommendations Representative McClendon (D-San Antonio), a construction defect victim herself, filed HB1686. Her bill is one of eleven bills filed on behalf of the consumers.
In response to the report, the homebuilding industry has filed HB1038 through Representative Ritter (D-Nederland). Unfortunately this bill is far from making any significant changes to the TRCC. Much like the homebuilders response to a cracked foundation, HB1038 will do nothing more than put a fresh coat of paint to hide the severe flaws of the commission.
The combination of bills filed by Representative McClendon, Ritter, Jessica Farrar (D-Houston), and Todd Smith (R-Bedford), would balance out the overly biased and complicated Commission. The defects in the Commission are too many to address here, but the major provisions of the bills would balance the Commissioners with consumer representation, stop the abuse of mandatory binding arbitration, cut the excessive fees charged to the consumer for services, and require all builders to be in the “Texas Star Builder” program.
All nine Commissioners have ties to the homebuilding industry, including the Vice President and General Counsel for Bob Perry Homes. The original bill required three of the Commissioners to be representative of the public, but had no requirements that they were consumer activists or had any history of consumer support. Currently the Commission is overly biased towards the homebuilding industry in complete defiance of the intent of the original bill.
The abuse of mandatory binding arbitration in new home contracts has been studied for over six years in the Texas House, Senate and the TRCC, yet nothing has been done by the Legislature to curb the abuse. Contrary to the homebuilding industry’s claims, arbitration has been found to be grossly unfair, extremely expensive, and heavily biased towards the builders. The bills would not allow arbitration clauses as part of the contract to purchase a new home.
The TRCC’s mediation process, the State Sponsored Inspection and Resolution Process (SIRP), requires a $250 processing fee, unlike any other Commission in Texas. The bills would stop the TRCC from charging any fees for services. This process is mandatory before a homeowner can seek legal action, but Representative Smith’s bill would make this service voluntary.
The Texas Star Builder Program, a program created by the homebuilding industry, sets high standards for builders, requiring a history of responding to consumer complaints and good quality construction. Unfortunately out of 26,000 homebuilders, only 34 are Star Builders. Not one are major builders such as KB Home, Perry Homes, David Weekley, DR Horton, Ryland, or any other national builder. HB2008 would require all builders to participate in this program.
Unfortunately, no bill has addressed the severe limitations of the “Statutory Warranties” which only provides 1-year coverage for the major components of a new home. Unlike a car built in Japan, which has a 5-year warranty, a new home built in the United States is only covered for one single year.
From all the bills filed this session and the 12 hours of testimony from homeowners across the state, it is clear, the TRCC, created by the builders, is a complete and total failure. This year our elected officials have an opportunity to listen to the consumer activist and to the homeowners that testified throughout the night and pass bills that would fix the foundation of the Commission instead of just putting a fresh coat of paint to hide the severe defects.
John Cobarruvias of Houston, a consumer activist and president of Homeowners Against Deficient Dwellings, Texas, testified in favor of Representative McClendon’s bill at the State Affairs hearing.
John Cobarruvias of Houston, a consumer activist and president of Homeowners Against Deficient Dwellings, Texas, testified in favor of Representative McClendon’s bill at the State Affairs hearing.
