Texas Homeowners May Benefit From Repeal of "Consumer Friendly" Law
On August 31, 2010, the Texas Residential Construction Commission will cease operations. The TRCC Act, contained in Chapter 16 of the Texas Property Code will no longer be valid law. This law was short lived and well-debated. As housing sales increase in Houston, Texas, new homeowners should be aware of how the abolishment of this supposedly "consumer friendly" law may actually help them.
For years, Texas courts have held that homeowners were entitled to certain warranties upon purchasing new homes. These warranties were implied, not written, and were automatically in effect from the time of the home's purchase. These implied warranties include a warranty of habitability, good and workmanlike construction, and good and workmanlike repair.
The TRCCA abolished these implied warranties. Instead, it provided statutory warranties with finite time periods. Builders were required, by statute, to provide homeowners with a 1 year warranty for workmanship and materials, a 2 year warranty for mechanical delivery systems, a 10 year warranty for structural components of the home, and a 10 year warranty of habitability.
When any of these warranties were breached, and a homeowner became dissatisfied with how the situation was handled, the homeowner had to follow a step by step process to solve the situation. The TRCCA created a state-sponsored dispute resolution process, or SIRP. Homeowners had to follow this process before they were allowed to seek other remedies, such as filing suit. The homeowner was required to provide the builder with written notice of every defect. The Builder was then provided an opportunity to inspect the home. If the dispute was not resolved in 30 days, the homeowners then had to contact the TRCC for state-sponsored inspection and dispute resolution. For this notification to be considered valid, the homeowner was forced to meet a list of technical requirements in the written notice. A neutral state inspector would then inspect the property.
While the TRCCA was enacted to expedite resolution and assist homeowners, the opposite effect occurred. This process would often take months. If the problem was not corrected, the homeowner could then go through the guidelines laid out in the Residential Construction Liability Act (RCLA). Under this act, the homeowner must provide written notice, by certified mail, of the defect. The builder is again afforded a reasonable opportunity to inspect and cure any alleged defects. The homeowner was not allowed to file suit until after 60 days after the RCLA letter.
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