HomeMy WebLinkAboutPR 15590: REJECT BIDS FOR DEMO & RECONSTRUCTION OF 3 HOMESINTEROFFICE MEMORANDUM
HOUSING ASSISTANCE PROGRAMS
To: Steve Fitzgibbons, City Manager t'~"~ U~,~
From: Mike Mason, Neighborhood and Community Dieve%pment Manager
Date: Thursday, October 13, 2009
Re: P.R 15590
RECOMMENDATION:
I recommend the City Council approve Proposed Resolution 15590 rejecting the bids for
the Demolition and Reconstruction of Three (3) Homes and authorizing re-
advertisement for bids.
BACKGROUND:
A builder or remodeler may not construct new homes or engage in remodeling projects
that change the living area of the home or that cost more than $10,000 for interior
renovations in Texas without first registering with the Texas Residential Construction
Commission.
The commission was established to provide Texas homeowners and residential
contractors an opportunity to resolve differences through a neutral dispute resolution
process and ongoing education. The commission ensures that the residential
construction industry provides well-built, reliable homes for Texans.
The commission's primary task is to register homes and builders in Texas.
The Specifications for Demolition & Reconstruction of Housing Units CDBG/HOME
Reconstruction Program required the General Contractor to be certified as a Home
Builder with the commission.
The Sunset Act, which is a chapter 325 of the Government Code, requires that the
legislature review each state agency periodically to determine whether the functions of
that agency should continue. In the 2009 regular session of the Texas legislature, the
legislature allowed the provisions of Title 16 to expire under Property Code section
401.005 as of September i, 2009.
The commission will no process new or renewal builder/remodeler registration
application forms received after August 31, 2009. Until that time, cities and lending
institutions can continue to use the commission's website to determine if a
builder/remodeler is registered and in good standing with the commission.
P.R. 15590
Ten (10) contractors attended the mandatory pre-bid meeting held October 15, 2009
and the following bid was received on October 21, 2009.
Bidder Total Bid
Stonewater, Inc. $250,543.54
It has now been established that TRCC will no longer process applications nor will the
commission accept new complaints or requests for inspections from home registrations,
the Housing Division will remove the TRCC Certification Standard from the
Specifications in future bid packages.
BUDGETARY/FISCAL EFFECT:
None
STAFFING/EMPLOYEE EFFECT:
None
SUMMARY:
I recommend the City Council approve Proposed Resolution 15590 rejecting the bids for
the Demolfion and Rernnstruction of Three (3) Homes and authorizing re-
advertisement for bids.
P. R. No. 15590
10/23/09 BAF/Housing
RESOLUTION NUMBER
A RESOLUTION REJECTING BIDS FOR DEMOLITION
AND RECONSTRUCTION OF THREE (3) HOMES AS
ADVERTISED BY THE HOUSING DMSION DUE TO
A SPECIFICATION STANDARD AND AUTHORIZES
RE-ADVERTISEMENT FOR BIDS
WHEREAS, the City of Port Arthur Housing Assistance Division
Rehabilitation Reconstruction Program Specifications required the contractor to be
registered with the Texas Residential Construction Commission (TRCC); and,
WHEREAS, the TRCC will not process new or renewal builder/remodeler
registration application forms received after August 31, 2009; and,
WHEREAS, the City of Port Arthur advertised and received bids from one
(1) contractor for the Demolition and Reconstruction of Three Homes; and,
WHEREAS, the Housing Division researched and found that the TRCC
would not renew registrants as of August 31, 2009, and did not provide this in an
Addendum to the contractors who were bidding, we recommend rejection of bids and
re-advertisement for bids in an effort to be fair to all bidders; NOW THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR:
THAT the City Council of the City of Port Arthur hereby rejects the bids for
the Demolition and Reconstruction of Three Homes; and,
THAT the City Manager of the City of Port Arthur is hereby authorized and
instructed to re-advertise this project for bids as soon as practicable; and,
THAT a copy of the caption of this Resolution be spread upon the minutes
of the City Council.
READ, ADOPTED AND APPROVED this day of
A.D., 2009 at a Regular Meeting of the City Council of the
City of Port Arthur, Texas by the following vote:
P.R. No. 15590
10-23-09
AYES: MAYOR
COUNCILMEMBERS
NOES:
ATTEST:
CIfY SECRETARY
APPROVED AS TO FORM:
A NG CITY ATTAR
APPROVED FOR ADMINISTRATION:
CITY MANAGER
.~ ~
MIKE MASON, EIGHBORHOOD AND
COMMUNITY DEVELOPMENT MANAGER
MAYOR
APPROVED AS TO THE AVAILABILITY
OF FUNDS:
~~~~
DIRECTOR OF FINANCE
ATTACHMENT
Section 401.006 Sunset Provision
TITLE 16. TEXAS RESIDENTIAL CONSTRUCTION COMMISSION ACT'
'as revised by HB 1038 80~' RS of the Texas Legislature
(Although Gaze has been taken to accurately reflect revisions to the Act made by the 80's Legislature,
this is not an official version of the revised Act).
SUBTITLE A. GENERAL PROVISIONS
CHAPTER 401. GENERAL PROVISIONS
Sec. 401.001. SHORT TITLE. 11mis title may be cited as the Texas Residential Construction Commission Act.
Sec. 401.002. GENERAL DEFINITIONS. In this title:
(1) "Applicable building and performance standazds" means:
(A) building and performance standazds adopted under Section 430.001; or
(B) for homes constructed before the adoption of building and performance standazds
under Section 430.001, the building and performance standazds under any express wazranty
provided in writing by the builder or, if there is no express warranty, the usual and customary
residential construction practices in effect at the time of the construction.
(2) "Applicable warranty period" means:
(A) a warranty period established under Section 430.001; or
(B) for construction to which the warranty periods adopted under Section 430.001 do not
apply, any other construction warranty period that applies to the construction
(3) "Approved azchitect" means an azchitect licensed by this state and approved by the
commission to provide services to the commission in connection with the state sponsored inspection and
dispute resolution process.
(4) "Approved structural engineer" means a licensed professional engineer approved by the
commission to provide services to the wrmnission in connection with the state sponsored inspection and
dispute resolution process.
(5) "Commission" means the Texas Residential Construction Commission.
(6) "Home" means the real properly and improvements and appurtenances for a single family
house or duplex.
(7) "Homeowner" means a person who owns a home or a subrogee or assignee of a person who
owns a home.
(7 al "Improvement to the interior of an existine home" means anv modification to the interior
living space of a home which includes the addition or installation of permanent fixtures msmde the
home An improvement to the interior of an existine home does not include mmprovements to an exmstin
home if the improvements aze desiened primarily to repair or replace the home's component DaIfS•
(8) "Limited statutory waranty and building and performance standazds" means the hmrted
statutory warranty and building and performance standazds adopted by the commission under Section
430.001
(8 al Material improvement" means a modification to an existine home that either increases or
decreases the homes total smuaze footaee of livine space that also modrfies the homes foundation.
erimeter walls or roof A material improvement does not include modifications to an exrsting home rf
the modifications aze desimed primarily to repair or replace the home's component parts.
(9) "Nonstnmctrual matter has the meaning assmgned by the hrmted statutory warranty and
building and performmance standards adopted by the commission under Section 430.001.
(10) "Request" means a request submitted under Section 428.001.
(11) "State inspector" means a person employed by the wmmission under Section 427.002.
(12) "State sponsored inspection and dispute resolution process" means the process by which the
commission resolves a request.
(13) "Structural" means the load bearing portion of a home.
(14) "Structural failure" has the meaning assigned by the limited statutory warranty and building
and performance standards adopted by the commission under Section 430.001.
(15) "Third parry inspector" means a person appointed by the commission under Section
428.003.
(16) "Warranty of habitability" means s builder's obligation to construct a home or home
improvement that is in compliance with the limited statutory warranties and building and perforrance
standards adopted by the commission under Section 430.001 and that is safe, sanitary, and fit for
humans to inhabit.
Sec. 401.003. DEFINIT1ON OF BUILDER. (a) In this title, "builder" means arty ep rson who, for a fixed price,
commission, fee, wage, or other compensation, sew constructs, or supervises or manages the construction of,
or contracts for the construction of or the supervision or mana¢ement of the construction o£
(1) a new home;
(2) a material improvement to a home, other than an improvement solely to replace or repair a
roof of an existing home; or
(3) an improvement to the interior of an existing home when the cost of the work exceeds
1$ 0_000.
(b) The term includes:
(i) an owner, officer, director, shareholder, partner, affiliate, subsidiary. or employee of the
builder,
(2) a risk retention group governed by Article 21.54, Insurance Code, that insures all or any part
of a builder's liability for the cost to repair a residential construction defect; and
(3) a third party warranty comparry and its administrator.
(c) The term does not include any~rson_ who;
has been issued a license by this state or an agency of this state to practice a trade or
profession related to or affiliated with residential construction if the work being done by the entity or
individual to the home is solely for the purpose for which the license was issued:: or
(2) sells a new home and:
(A) does not construct or supervise or manage the construction of the home: and
(B) holds a license issued under Chanter 1101 Occupations Code or rs exempt from that
chapter under Section 1101 005 Occupations Code.
(d) The term dots not include a nonprofit business entity that is exempt from taxation under Section
501(c)(3) Internal Revenue Code. if: __ _r ,~_ ___ ..........:.... ,.v a,o hnmo matenal
(2) the builder contractually aerees to wmply with the provisions of_ this title•
(3) the builder is contractually liable to the homeowner for the warranties and buildine and
material improvement or improvement.
Sec. 401.004. DEFINITION OF CONSTRUCTION DEFECT. (a) In this title, "construction defect" means:
(1) the failure of the design, construction, or repair of a home, an alteration of or a repair,
addition, or improvement to an existing home, or an appurtenance to a home to meet the applicable
warranty and building and performance standards during the applicable warranty period; and
(2) any physical damage to the home, an appurtenance to the home, or real property on which the
home or appurtenance is affixed that is proximately caused by that failure.
(b) The term does not include a defect that arises or arty damages that arise wholly or partly from:
(1) the negligence of a person other than the builder or an agent, employee, subcontractor, or
supplier of the builder,
(2) failure of a person other than the builder or an agent, employee, subcontractor, or supplier of
the builder to:
(A) take reasonable action to mitigate any damages that arise from a defect; or
(B) take reasonable action to maintain the home;
(3) normal weaz, teaz, or deterioration; or
(4) normal shrinkage due to drying or settlement of construction components within the tolerance
of building and performance standards.
Sec. 401.005. EXEMI'TIONS. (a) This title does not apply to a home that is:
(1) built by the individual who owns the home, alone or with the assistance of the individual's
employees or independent contractors; and
(2) used by the individual as the individual's primary residence for at least one yeaz after the
completion or substantial completion of construction of the home.
(b) This title does not apply to a homeowner or to a homeowner's real estate broker, agent, interior
designer registered under Chanter 1053 Occupations Code interior decorator. or property manager who
supervises or arranges for the construction of an improvement to a home owned by the homeowner.
c An individual who builds a home or a material im rovement to a home and sells the home
immediate) followin ce ration of the buildin or remodelin and does not live in the home for at least one
_ _ .. .. n_.___ __ ---_......a.te .,~ 0 6..ildar under the Warranty
not automatically require an individual to remster under Section 416.001.
Sec. 401.006. SUNSET PROVISION. The Texas Residential Construction Commission is subject to Chapter
325, t.iovemment Code (Texas Slalset Act). Unless continued in existence as provided by that chapter, die
commission is abolished and this title expires September 1, 2009.
VIOIaIIrI 8 SCaiule W Wluldl uua uaa w+
issue an order to cease and desist from the viol ~on or an order to take affirmative action or both to enforce
compliance A person may appeal the order directly to district court in accordance with Chapter 2001.
Government Code.
(b) Before issuing an order under this section. the commission shall set and give notice of a hearing
_ _ -• _ -~~ n_a a a rh fi d,noc
wnemer a yloiauVll uas w+.waw.
lc) The commission. after providing notice and an opportuniri to anpeaz for a hearing, may impose
st a person who violates a cease and desist order an admimstrapve penalri in an amount not to exceed
_ - . _ .... -_- -•,_-- --_,,,,...,.,,,..ava h., lau~ the attnmev ¢eneial or the
bond is not required of the commission with respect to iniunctive relieY granteq u
the court may enter as proper an order awarding a prehnrmarv or final mlunction.
fees and deposition costs.
SUBTITLE B. TEXAS RESIDIIVTIAL CONSTRUCTION COMMISSION
CHAPTER 406. COMMISSION
Sec. 406.001. TEXAS RESIDENTIAL CONSTRUCTION COMMISSION; MEMBERSHIP. (a) The Texas
Residential Construction Commission consists of nine members appointed by the governor with the advice and
consent of the senate as follows:
(1) four members must be builders who each hold a certificate of registration under Chapter 416;
(2) three members must be representatives of the general public;
(3) one member must be a licensed professional engineer who practices in the area of residential
constmction; and
(4) one member must be either a licensed architect a=ho practices in the area of residential
construction or a building inspector who meets the requirements set forth in Chapter 427 and practices in
the azea of residential construction.
(a 1) in maldne appointments under Subsection (a)(2) the eovemor shall consider individuals who can
represent the interests of homeowners includine indrvrduals who have expenence represenUne consumer or
homeowner interests.
(b) Appointments to the commission shall be made without regard to the race, color, disability, sex,
religion, age, or national origin of the appointees. cs _ __~_:,...:,...:s.ti,e ,.o.r,,,, „r *t,a nPmnn'c mouse:
by a reeulatorv asencv in the field of residential wrrstruction
(2) is employed by or parncipates m the management of a business entity or other oreanization
regulated by or receivine money from the commission
(41 owns or controls, directly or mdrrectly more than a 10 percent interest in a business entity or
attendance or expenses.
Sec. 406.002. TERMS. (a) Commission members serve staggered six year terms, with three members' terms
expiring February 1 of each odd numbered yeaz. The terms of three of the builder representatives must expire in
different odd numbered years. The term of one of the representatives of the general public must expire in each
odd numbered year.
(b) A member of the commission may not serve more than two complete terms.
Sec. 406.003. PRESIDING OFFICER 'Ihe governor shall designate a member of the commission as the
presiding officer of the commission to serve in that capacity at the pleasure of the governor. At a regulaz
meeting in February of each year, the commission shall elect from its membership a vice presiding officer and a
secretary.
Sec. 406.004. MEMBERSHIP AND EMPLOYEE RESTRICTIONS. (a) in this section, "Texas trade
association" means a cooperative and voluntarily joined association of business or professional competitors in
this state designed to assist its members and their industry or profession as a whole in dealing with mutual
business or professional problems, issues, and circumstances and in promoting the common interest of its
members and their industry and profession as a whole.
(b) A person may not be a member of the commission and may not be a commission employee
employed in a "bona fide executive, administrative, or professional capacity," as that phrase is used for purposes
of establishing an exemption to the overtime provisions of the federal Fair Labor Standazds Act of 1938 (29
U.S.C. Section 201 et seq.) and its subsequent amendments, i£
(1) the person is an officer, employee. mana¢er, or paid consultant of a Texas trade association
or consumer association in the field of residential construction; or
(2) the person's spouse is an officer. [a] manageri or paid consultant of a Texas trade association
or consumer association in the field of residential construction.
(c) A person may not be a member of the commission or act as the general counsel to the commission if
the person is required to register as a lobbyist under Chapter 305, Government Code.
(d) A person may not be a commission employee described by Subsection (b) if the person is an
employee or agent in the field of residential construction. This subsection does not apply to a person appointed
to the commission.
Sec. 406.005. GROUNDS FOR REMOVAL. (a) It is a ground for removal from the commission that a
member:
(1) does not have at the time of taking office the qualifications required by Section 406.001;
(2) does not maintain during service on the commission the qualifications required by Section
406.001;
(3) is ineligible for membership under Section 406.004;
(4) cannot because of illness or disability discharge the member's duties for a substantial part of
the members term; or
(5) is absent from more than half of the regulazly scheduled commission meetings that the
member is eligible to attend during a calendaz yeaz without an excuse approved by a majority vote of the
commission.
(b) The validity of an action of the commission is not affected by the fact that it is taken when a ground
for removal of a commission member exists.
(c) If the executive director has knowledge that a potential ground for removal exists, the executive
director shall notify the presiding officer of the potential ground. The presiding officer shall then notify the
governor and the attorney general that a potential ground for removal exists. If the potential ground for removal
involves the presiding officer, the executive director shall notify the next highest ranking officer of the
commission, who shall notify the governor and the attorney general that a potential ground for removal exists.
Sec. 406.006. TRAINING. (a) A person who is appointed to and qualifies for office as a member of the
commission may not vote, deliberate, or be counted as a member in attendance at a meeting of the commission
until the person completes a training program that complies with this section.
(b) The training program must provide the person with information regarding:
(1) the legislation that created the commission;
(2) the programs operated by the commission;
(3) the role and functions of the commission;
(4) the rules of the commission, with an emphasis on the Hiles that relate to disciplinary and
investigatory authority;
(5) the current budget for the commission;
(6) the results of the most recent formal audit of the commission;
(7) the requirements of:
(A) the open meetings law, Chapter 551, Government Code;
(B) the public information law, Chapter 552, Government Code;
(C) the administrative procedure law, Chapter 2001, Government Code; and
(D) other laws relating to public officials, including wnflict of interest laws; and
(8) any applicable ethics policies adopted by the commission or the Texas Ethics Commission.
(c) A person appointed to the commission is entitled to reimbursement, as provided by the General
Appropriations Act, for the travel expenses inctured in attending the training program regazdless of whether the
attendance at dre program occurs before or after the person qualifies for office.
Sec. 406.007. MEETINGS. The commission shall meet at least quarterly and at other times at the call of the
presiding officer.
CHAPTER 407. EXECUTIVE DIIECTOR AND OTHER AGENCY PERSONNEL
Sec. 407.001. EXECUTNE DIRECTOR The commission shall employ an executive director as the executive
head of the agency.
Sec. 407.002. OTHER PERSONNEL. The commission may employ other personnel as necessary for the
administration of this title.
Sec. 407.003. DNISION OF RESPONSIBILITIES. The commission shall develop and implement policies that
cleazly separate the policy making responsibilities of the commission and the management responsibilities of
the executive director and the staff of the commission.
Sec. 407.004. QUALIFICATIONS AND STANDARDS OF CONDUCT INFORMATION. The executive
director or the executive directors designee shall provide to members of the commission and to commission
employees, as often as necessary, information regazding the requirements for office or employment under this
title, including information regazding a person's responsibilities under applicable laws relating to standards of
conduct for state officers or employees.
Sec. 407.005. CAREER LADDER PROGRAM; PERFORMANCE EVALUATION. (a) The executive director
or the executive director's designee shall develop an infra agency career ladder program that addresses
opportunities for mobility and advancement for employees within the commission. The program must require
infra agency posting of all nonentry level positions concurrently with a~ public posting.
(b) The executive director or the executive directors designee shall develop a system of annual
performance evaluations based on measurable job tasks. All merit pay for commission employees must be based
on the system established under this subsection.
Sec. 407.006. EQUAL EMPLOYMENT OPPORTUNITY POLICY; ANNUAL REPORT. (a) The executive
director or the executive directors designee shall prepaze and maintain a written policy statement that
implements a program of equal employment opportunity to ensure that all personnel decisions are made without
regazd to race, color, disability, sex, religion, age, or national origin.
(b) The policy statement must include:
(1) personnel policies, including policies relating to recruitment, evaluation, selection, training,
and promotion of personnel, that show the intent of the commission to avoid the unlawful employment
practices described by Chapter 21, Labor Code; and
(2) an analysis of the extent to which the composition of the commission's personnel is in
accordance with state and federal law and a description of reasonable methods to achieve compliance
with state and federal law.
(c) The policy statement must:
(1) be updated annually;
(2) be reviewed by the state Commission on Human Rights for compliance with Subsection
(b)(1); and
(3) be filed with the governor's office.
(d) The governors office shall deliver a biennial report to the legislature based on the information
received under Subsection (c)(3). The report may be made separately or as a part of other biennial reports made
to the legislature.
Sec. 407.007. INFORMATION AND TRAINING ON STATE EMPLOYEE INCENTNE PROGRAM. The
executive director or the executive directors designee shall provide to commission employees information and
training on the benefits and methods of participation in the state employee incentive program
CHAPTER 408. POWERS AND DUTIES
Sec. 408.001. RULES. The commission shall adopt Hiles as necessary for the implementation of this title,
including rules:
(1) governing the state sponsored inspection and dispute resolution process, including building
and performance standards, administrative regulations, and the conduct of hearings under Subtitle D;
(2) establishing limited statutory warranty and building and performance standards for residential
construction;
(3) approving third party warranty companies; and
(4) approving third party inspectors.
Sec. 408.002. FEES. lid The commission shall adopt fees as required by this title in amounts that aze
reasonable and necessary to provide sufficient revenue to cover the costs of administering this title.
(b) The commission may chazee a late fee for late payment of anv fee due to the commission. The late
fee may be anv amount that does not exceed the amount of the fee due.
(c) The commission may charge a reasonable fee for.
(1) a homeowner to submit a request For state-sponsored inspection under Subtitle D;
information requested from the commission under Section 409.001ior
~eroducine mailine and distributine special printed materials and publications senerated in
bulk by the commission for use and distribution by builders.
(d) The commission may waive or reduce the fee for an inspection under Subtitle D for a homeowner
who demonstrates an inability to pay the fee
Sec. 408.003. ACCESSIBILITY. (a) The commission shall comply with federal and state laws related to
program and facility accessibility.
(b) The executive director shall prepaze and maintain a written plan that describes how a person who
does not speak English can obtain reasonable access to the commission's programs and services.
(c) The commission may procure and distribute to consumers informational materials and promotional
items that contain commission contact details and outreach information
Sec. 408.004. ANNUAL REPORT. (a) The commission shall file annually with the governor and the presiding
officer of each house of the legislature a complete and detailed written report accounting for all funds received
and disbursed by the commission during the preceding fiscal yeaz.
(b) The report must be in the form and reported in the time provided by the General Appropriations Act.
Sec 408005 COLLECTION OF AMOUNTS DUE The commission may seek reimbursement of anv amounts
due to the commission and restitution for anv dishonored payment instnunent presented for payment to the
commission.
CHAPTER 409. PUBLIC INTEREST INFORMATION AND COMPLAINT PROCIDURES
Sec. 409.001. PUBLIC INTEREST INFORMATION. (a) The commission shall prepare information of public
interest describing the functions of the commission, the provisions of the limited statutory warranty and
building and perfommance standards, the state sponsored inspection and dispute resolution process, and the
procedures by which complaints or requests aze filed with and resolved by the commission.
(b) The commission shall make the information available to the public and appropriate state agencies
and shall post The information on the commission's website.
(c) Within 30 days of the receipt by the commission of the registration required by Section 426.003, the
commission shall mail a copy of the information of public interest described in Subsection (a) to the owner of
the home as described in the registration.
Sec 409 0011 BUILDER LIST (a) In this section. "volume builder" means a builder who resisters at least 100
homes each veaz as provided by Section 426.003.
lb) The commission shall create and make accessible to the publican electronic list and a hazd-copy list
of builders who:
mobility-related special needs
(c) The electronic list required under Subsection (b) shall provide if available. the follo_winQ information
coov format the electronic list required under Subsection (b).
Sec. 409.002. PUBLIC PARTICIPATION. The commission shall develop and implement policies that provide
the public with a reasonable oppornmity to appeaz before the commission and to speak on any issue under the
jurisdiction of the commission.
Sec. 409.003. RECORDS OF COMPLAINTS. (a) The commission shall maintain a file on each written
complaint filed with the commission.
(b) The commission shall provide to the person filing the complaint and to each person who is a subject
of the complaint a copy of the commission's policies and procedures relating to complaint investigation and
resolution.
(c) The commission, at least quarterly until final disposition of the complaint, shall notify the person
filing the complaint and each person who is a subj ect of the complaint of the status of the investigation.
(d) The commission shall make available to the oubiic information about each complaint that resulted in
disciplinary action by the commission.
()The commission may not disclose the address of anv individual home reeistered with the
commission when makine information available to the public under this title extent as necessary to rmplement
this title.
(fl Notwithstandine Subsections (d) and (e) the commission may not disclose the address of an
individual home reeistered with the commission:
(1) on the commission's Internet website_ or
(2) in connection with an oven records request under Chanter 552, Government Code.
Sec 409 004 DIRECTORY OF BUILDERS The commission shall make available to the public a list of each
b ~lder who holds a certificate of retstration issued under Chanter 416
SUBTITLE C. BUILDER REGISTRATION
CHAPTER 416. CERTIFICATE OF REGISTRATION
Sec. 416.001. REGISTRATION REQUIRED. A person may not act as a builder unless the person holds a
certificate of registration under this chapter.
Sec. 416.002. APPLICATION FOR CERTIFICATE. (a) An applicant for an original or renewal certificate of
registration must submit an application on a fomt prescribed by the commission.
(b) Each applicant must disclose in the application whether the applicant has:
(1) entered a plea of guilty or nolo contendere to a felonry chazge or a misdemeanor involving
moral turpitude; or
(2} been convicted of a felony or a misdemeanor involving moral turpitude and the time for
appeal has elapsed or the conviction has been affirmed on appeal.
(c) Disclosure under Subsection (b) is required regardless of whether an order granting the person
community supervision suspended the imposition of the sentence.
(d) The commission may, on receipt of an application, conduct a criminal backgrorntd check of the
applicant or any person responsible for the application. The commission may obtain criminal history record
building services described by Subsection (bl(21.
(d) The commission shall contact all volume builders in this crate and encorrraee those builders to
_ ... ,. __ __.~ .__t.u,.. ~el.,~e.r enar,~l naoric
information maintained by the Department of Public Safety, the Federal Bureau of Investigation, or any other
local, state, or national governmental entity. Unless the information is a public record at the time the
commission obtains the information under this subsection, the information is confidential, and the commission
may not release or disclose the information to any person except under a wort order or with the permission of
the applicant.
(e Based on a commission investieation of an alleeed violation of Sections 418.001(au14I-(201. the
_ _~ _ __~.~_..... ,.c.e.,,~r.~„nn m dsclnse to the commrssron
to a publicly traded companv.
Sec. 416.004. FEES. (a) The commission shall chazge and collect:
(1) a filing fee for an application for an original certificate of registration that does not exceed
$500;
(2) a fee for renewal of a certificate of registration that does not exceed $300, and
.,_____. _c .,.., F A„n if navmPl,r of a reflstration
application or renews[ tee sue under uns uu~ .~ ,a.~•
(b) The commission shall establish a fee schedule that takes into consideration the unit volume or dollaz
volume of potential applicants.
c All fees aid to the commission under this section aze nonrefimdable.
Sec. 416.005. GENERAL ELIGIBILTIY REQUIREMENTS. A person may not receive a certificate of
registration under this chapter unless:
(1) the person, at the time of the application:
(A) is at least 18 yews of age; and
(B) is a citizen of the United States or a lawfully adrrritted alien; and based on
(2) the wrrrrrrission is satisfied with the person's honesty, trustworthiness, and integrity
information supplied or diswvered in wnnection with the person's application.
Sec. 416.006. ADDITIONAL ELIGIBILITY REQUIREMENTS FOR BUSINESS ENTTI'IES. (a) To be
eligible for an original or renewal certificate of registration under this chapter:
(1) a corporation must designate one of its officers as its agent for the purposes of this chapter,
(2) a limited liability tympany must designate one of its managers as its agent for the purposes of
this chapter, and
(3) a partnership, limited partnership, or limited liability partnership must designate one of its
managing partners as its agent for the purposes of this chapter.
(b) A corporation, limited liability company, partnership, limited partnership, or limited liability
partnership is not eligible to be registered under this chapter and may not act as a builder unless the entity's
designated agent is individually registered as a builder.
Sec. 416.007. ISSUANCE OF CERTIFICATE. (a) Not later than the 15th day after the date the wmmission
receives an application from an applicant who meets the requirements of this chapter, the commission shall
issue a certificate of registration to the applicant.
(b) The certificate of registration remains in effect for the period prescribed by the commission if the
certificate holder wmplies with this chapter and pays the appropriate renewal fees.
(c) The commission shall issue one certificate of registration for each business entity registered under
this chapter.
Sec. 416.008. DENIAL OF REGISTRATION. (a) If the wrnmission denies an application for an original
certificate of registration or a renewal application, the commission shall give written notice to the applicant not
later than the 15th day after the date the commission receives the application.
(b) The applicant may appeal the denial of the application if, on or before the 30th day after the date the
applicant receives notice under this section, the applicant files a written request for a hearing before the
commission
(c) The commission shall:
(1) set a time and place for the hearing not later than the 30th day after the date the commission
receives the notice of the appeal; and
(2) give notice of the hearing to the applicant before the 15th day before the date of the hearing.
(d) The he.~rim s officer may Brant a motion for continuance of the hearins on the request of the
commission or either nartv.
(e) The hearing shall be held before a hearings officer appointed by the commission. After the hearing,
the hearings officer shall enter an appropriate order.
(f) The commission shall adopt procedural rules under which a decision by a heazings officer under this
section is subject to appeal to the commission.
(g) A hearing under this section is governed by Chapter 2001, Government Code.
Sec. 416.009. EXPIRATION OF CERTIFICATE. (a) The commission may issue or renew a certificate of
registration for a period that does not exceed 24 months.
(b) The commission by rote may adopt a system under which certificates of registration expire on
several dates during the yeaz. The commission shall adjust the date for payment of renewal fees accordingly.
(c) In a year in which the expiration date for a certificate of registration is changed, the renewal fee
payable shall be prorated on a monthly basis so that the certificate holder pays only that portion of the fee that is
allocable to the number of months during which the certificate of registration is valid. On renewal of the
certificate of registration on the new expiration date, the total renewal fee is payable.
Sec. 416.O10.OFFICE LOCATION; CHANGE OF ADDRESS; ASSUMED NAMES. (a) A builder shall
maintain a fixed office location in this state. The address of the builder's principal place of business must be
designated on the certificate of registration.
(b) Not later than the 30th day after the date a builder moves from the address designated on the
certificate of registration, the builder shall submit an application, accompanied by the appropriate fee, for a
certificate of registration that designates the new location of the builder's principal place of business. The
commission shall issue a certificate of registration that designates the new location if the new location complies
with the requirements of this section.
(c) If a builder operates under arty name other than the name that is set forth on the builder's certificate
of registration, the builder shall, within 45 days of operating under this other name, disclose this other name to
the commission.
(d) This section does not require a builder to obtain a certificate of registration for each sales office.
(e) A builder may desienate a United States Postal Service postal box for use in corresvondence. The
builder may not use the box as the builder's principal place of business for purposes of thrs section.
Sec. 416.011. TEXAS STAR BUILDER DESIGNATION. (a) The commission shall establish Hiles and
procedures for a program through which a builder can be designated as a "Texas Star Builder." A builder's
participation in the program is voluntary and is not a requirement for the issuance of a certificate of registration
required under this chapter.
(b) A builder who participates in this program will be allowed to represent to the public that the builder
is a "Texas Star Builder" and meets all of the requirements and qualifications that are set forth by The
commission for the program
(c) If the commission detemrines that a builder must meet certain education requirements to participate
in the "Texas Star Builder" program, a builder may satisfy those requirements by completing education
programs offered by a trade association or other organization whose education programs have been approved by
the commission.
(d) The certification issued by the commission as a "Texas Star Brrilder" ~~ valid for at most one vent
and renewable on a date to be determined at the commission's discretion
Sec 416 012 CONTINUING EDUCATION PROGRAMS (a) The commission shad recoenize or administer
continuing education proerams for builders reeistered by the commission A reerstered budder must particrpate
in the proerams to the extent required by this section to mamtam the builder's reerstration.
(b) A builder who reeisters for the first time on or after September 1 2007 must complete. durine the
first veaz the builder is reeistered with the commission five hours of contimnne educaton_ one hour of which
must address ethics.
(c) A builder who is reeistered before September 1 2007 and all other builders who resister for the first
time on or after September 1 2007 and satisfy the requirements of Subsection (b) must complete five hours of
continuing education every five years one hour of which must address edrres.
• ,..
wnslruction. includine:
(1) successfully completine or auditine a course sponsored by an institution of hieher education:
~u ai '1 completive a course certified by a professional or trade oreamzation:
~9) eneaeine inself-directed study on the practice oY res~aenpu consuucnon.
(e) A reeistered builder may not receive more than two continuine education credit hours durine each
five-veaz period for eneaeine in self-directed study.
(fl At least two hours of the continuine education requirement under this section must address:
(1) limited statutory warranties;
(2) buildine and performance standards: and
(3) requirements of the International Residential Code as adopted under Section 430.001 and
other statutes and rules that apply to builders under this title.
f:;i A builder's aeent or other desienated individual may satisfy the requirements of this section for the
builder if the builder is a corooration or other business entity.
CHAPTER 417. CERTIFICATION OF RESIDENTIAL CONSTRUCTION ARBITRATORS
Sec. 417.001. CERTIFICATION. (a) The commission by rule shall establish eligibility requirements and
procedures for a person to be certified by the commission as a residential construction arbitrator.
(b) The requirements established under this section must, at a minimum, require a certified arbitrator to:
(1) have at least five years' experience in conducting arbitrations between homeowners and
builders involving construction defects;
(2) be familiaz with the statutory warranties and building and performance standazds established
under Chapter 430 and with the provisions of Chapter 27; and
(3) meet continuing education requirements established by the commission.
(c) Nothing in the chapter prohibits an arbitrator who does not hold a certificate under this chapter from
conducting an azbitration involving a residential construction defect.
Sec. 417.002. APPLICATION FOR CERTIFICATION. An applicant for certification under this chapter or for
renewal of that certification must submit an application on a form prescribed by the commission and include the
fee required by Section 417.003.
(5) teachine a course described by Subdivisions (1)-(4):
(6) publishine an article paper or book on the practice of residential construction:
(7) makine or attendine a presentation at a meetine of a residential or budder association or
Sec. 417.003. FEES. ~ The commission shall charge and collect:
(1) a filing fee for an application for certification under this chapter that does not exceed $100;
(2) a fee for renewal of a certification under this chapter that does not exceed $50• and
f3) a late fee that does not exceed the amount of the fee due if oavment of a registtation c
apnlication fee due under this title is late.
(b) All fees raid to the commission rmder this section are nonrefundable.
Sec. 417.004. PUBLICATION AND COMMENT PERIOD; CERTIFICATION. (a) The wmmission shall
publish notice of each applicant's original application for certification under this chapter in the Texas Register
and allow public comment on the application during the 21 days after the date the notice is published. During
that period, any person may contest the application in writing submitted to the commission.
(b) If the commission fmds that certification of the applicant is in the public interest, the commission
shall certify the applicant rmder this chapter.
Sec. 417.005. DENIAL OF CERTIFICATION. The commission shall establish procedures under which a
denial of a certification under this chapter may be contested by the applicant.
Sec. 417.006. EXPIItATION OF CERTIFICATION. The commission may issue or renew a certification under
this chapter for a period that does not exceed 24 months.
Sec. 417.007. LIST OF CERTIFIED ARBITRATORS. The commission shall maintain an updated list of
residential construction azbitrators certified rmder this chapter and make the list available to the public.
CHAPTER 418. PROHIBITED PRACTICES; DISCIPLINARY PROCEEDINGS
Sec. 418.001. GROUNDS FOR DISCIPLINARY ACTION. A person, including a builder or a arson who i
interest in the builder is subject to disciplinary action rmder this chapter for.
(1) fraud or deceit in obtaining a registration or certification under this subtitle;
(2) misappropriation or misauulication of trust fiords in the practice of residential construction,
includine a violation of Chanter 32 Penal Code or Chanter 162 if found by a final nonaonealable court
ludo;
(3) Wanting false consideration in a contract to sell a new home or in a construction contract;
(4) discriminating on the basis of race, color, religion, sex, national origin, or ancestry;
(5) publishing a false or misleading advertisement;
(6) failure to honor, within a reasonable time, a check issued to the commission, or an +LOther
instrument of navment, including a credit or debit card or electronic funds transfer after the commission
has sent by certified mail a request for payment to the person's last known business address, according to
commission records;
(7) failure to pay an administrative penalty assessed by the commission under Chapter 419 or a
fee due under Chanter 426;
(8) failure to oav a final nonappealable rt judgmant arising from a construction defect or
other transacUion between the person and a homeowner;
(9) failure to register a home as required by Section 426.003;
(10) failure to remit the fee for registration of a home under Section 426.003;
(11) failure to reimburse a homeowner the amount ordered by the commission as provided ~
Section 428.004(d);
(12) engaging in statutory or common-law fraud or misappropriation of funds, as detemuned by
the commission after a hearing under Section 418.003:
(13) a reneated failure to participate in the state-sponsored inspection and dispute resolution
nrocess if required by this title:
f 14) failure to register as a builder as required render Chapter 416•
(15) urine or attemptine to use a certificate of registration thaz has expired or that has been
revoked:
(16) falsely representine that the person holds a certificate of registration issued under Chanter
4
X18) aiding abettine or conSpirine with a person who does not hold a cernncate or reersuanon
to evade the provisions of this title or Hiles adopted under this title. if found by a final nonapcealable
wort lodgment:
(19) allowine the person's certificaze of registration to be used by another person:
(20) acting as an agent. partner or associate of a person who does not hold a certificate of
reeisnation with the intent to evade the provisions of this title or Hiles adopted wider this title:
(21) a failure to reasonably perform on an accented offer to repair or a repeated farlwe to make
an offer to repair based on:
(A) the rewmmendation of a third-party inspector under Section 428 004: or
rnl rhP final holdine of an appeal under Chapter 429
(22) a repeated failure to respond to a commission request for information:
(23) a failure to obtain a building permit required by a political subdivision before constructive a
new home or an improvement to an existing home:
nonappealable wort judgment;
~5) a repeated failure to comply with the requirements of Subtitle F: or
(26) otherwise violating this title or a commission rule adopted under this title.
Sec. 418.002. DISCIPLINARY POWERS OF COMIvIISSION. ~ On a detemunation that a ground for
disciplinary action under Section 418.001 exists, the wmmission may:
(1) revoke or suspend a registration or certification in the event of repeated prior violations that
have resulted in disciplinary action;
(2) probate the suspension of a registration or certification;
(3) formally or informally reprimand a registered or certi5ed person, or
(4) impose an administrative penalty under Chapter 419.
(b) The commission must wnsider the factors described by Section 419 002(b) before taking
disciplinary action under this chapter.
precedine 12 months.
(e) When the wmmission has information that a matter ma +~be criminal in nature the wmmission may
refer the matter to a local district attorney or county attorney for investigation.
Sec. 418.003. HEARING. (a) If the commission proposes to take a disciplinary action against a person rmder
Section 418.002, the person is entitled to a hearing before the wmmission.
(b) The commission shall adopt procedural Hiles by which all decisions to take disaplinary action under
this chapter are subject to appeal to the commission
(c) The commission shall prescribe the time and place of the hearing.
(d) A hearing under this section is governed by Chapter 2001, Government Code.
disciplinary action that involve the ereater of -
Sec. 418.004. APPEAL. (a) A person aggrieved by a ruling, order, or decision of the commission is entitled to
appeal to a district court in the county in which the administrative hearing was held.
(b) An appeal under this section is governed by Chapter 2001, Government Code.
revocation or susvension of a reeistration or certification is determined by substantial evidence.
Sec ai u not RRCVnNCrRrr 7TV F(1R AnMTNiSTRAT-VF. A('TIONS. (a) The commission may
simultaneously take administrative action under this chapter against:
(1) a builder, and
(2) a verson who owns or controls a rnajority ownership interest in the builder.
CHAPTER 419. ADMINISTRATIVE PENALTY
Sec. 419.001. IIvIPOSTTION OF ADMINISTRATIVE PENALTY. The commission may impose an
administrative penalty on a person who violates this title or a Wile adopted or order issued by the commission
under this title.
Sec. 419.002. AMOUNT OF PENALTY (a) Except as provided by Subsection (c). an administrative penalty
imposed under this chapter may not exceed 10 000 for each violation.
(b) Tn determining the amount of an administrative penalty, the hearings officer or commission shall
consider.
(1) the seriousness of the violation, including the nature, arcumstances, extent, and gravity of the
prohibited acts;
(2) the history of previous violations;
(3) the amount necessary to deter a future violation;
(4) efforts to correct the violation; and
(5) any other matter justice may require.
(c) A violation of Section 418 001(2) or (12) is vunishable by a venalty not to exceed $100.000.
Sec. 419.003. PAYMENT OF PENALTY. The commission shall specify in an order imposing an administrative
penalty under this chapter a date on or before the 30th day after the date the order becomes final and
unappealable by which the person against whom the penalty is imposed must pay the penalty.
Sec. 419.004. ENFORCEMENT OF PENALTY. If a person does not pay an administrative penalty imposed
under this chapter and enforcement of the penalty is not stayed, the commission may:
(1) refer the matter to the attorney general for collection of the penalty; or
(2) enforce any part of the order that specifies disciplinary action to be taken against the
registered or certified person if the registered or certified person fails to pay the administrative penalty
within the time prescribed.
CHAPTER 420. BUILDING CONTRACT PROVISIONS
Sec 420 001 REQUIRED WRITTEN DISCLOSURE. In a contract for the constmction of a new home or an
improvement to an existing home required to be registered under Section 426 003. the contract must contain a
notice to the consumer in at least 10-point bold tvve or the computer equivalent that lives the telephone number
of the commission and states:
STATE LAW REOUIItES THAT A PERSON HOLD A CERTIFICATE OF REGISTRATION FROM
THE TEXAS RESIDENTIAL CONSTRUCTION COMMISSION IF THE PERSON CONTRACTS TO
CONSTRUCT A NEW HOME OR IF THE PERSON CONTRACTS TO CONSTRUCT A MATERIAL
IMPROVEMENT TO AN EXISTING HOME OR CERTAIN IMPROVEMENTS TO THE INTERIOR OF AN
EXISTING HOME AND THE TOTAL COST OF THE IMPROVEMENT IS $10 000 OR MORE
INCLUDING LABOR AND MATERIALS).
YOU MAY CONTACT THE COMMISSION AT linsert commission's telephone numbed TO FIND
OUT WHETHER THE BUILDER HAS A VALID CERTIFICATE OF REGISTRATION. THE
COMMISSION HAS INFORMATION AVAILABLE ON THE HISTORY OF BUILDERS. INCLUDING
SUSPENSIONS REVOCATIONS COMPLAINTS AND RESOLUTION OF COMPLAINTS.
THIS CONTRACT IS SUBJECT TO CHAPTER 426 PROPERTY CODE THE PROVISIONS OF
THAT CHAPTER GOVERN THE PROCESS THAT MUST BE FOLLOWED IN THE EVENT A DISPUTE
ARISES OUT OF AN ALLEGED CONSTRUCTION DEFECT. IF YOU HAVE A COMPLAINT
CONCERNING A CONSTRUCTION DEFECT YOU MAY CONTACT THE COMMISSION AT THE
TOLL-FREE TELEPHONE NUMBER TO LEARN HOW TO PROCEED UNDER THE STATE-
SPONSOREDINSPECTION AND DISPUTE RESOLUTION PROCESS.
Sew 420 002 REQUIRED CONTRACT PROVISIONS In a contract for the construction of a new home or an
i_pn rovement to an existine home required to be registered under Section 426 003 the contract is not
enforceable aaairtst a homeowner unless the contract
(1) contains the builder's name and certificate of registration number, and
!~1 contains the notice required by Section 420.001
Sec 420 003 BINDING ARBTI'RATION CONTRACT PROVISION (a) In a contract for the construction of a
new home or the improvement of an existing home required to be registered under Section 426.003 and that
computer equivalent.
SUBTITLE D. STATE SPONSORED INSPECTION AND DISPUTE RESOLUTION PROCESS;
STATUTORY WARRANTY AND BUILDING AND PERFORMANCE STANDARDS
CHAPTER 426. GENERAL PROVISIONS
Sec. 426.001. APPLICABILITY OF SUBTITLE. (a) This subtitle applies to a dispute between a builder and a
homeowner if:
(1) the dispute arises out of an alleged construction defect, other than a claim solely for:
(A) personal injury, survival, or wrongful death; or
(B) damage to goods; and
(2) a request is submitted to the commission not later than the 30th day after the 10th anniversary
of_.
the date of the initial transfer of title from the builder to the initial owner of the home
or the improvement that is the subject of the dispute; or
uB if there is not a closing in which title is transferred the date on which the construction
of the improvement was substantially completed
(b) This subtitle does not apply to a dispute arising out of:
(1) an alleged violation of Section 27.01, Business & Commerce Code;
(2) a builder's wrongful abandonment of an improvement project before completion; or
(3) a violation of Chapter 162.
(c) For the purposes of this section, "damage to goods" does not include damage to a home.
Sec. 426.002. CONFLICT WITH CERTAIN OTHER LAW. To the extent of any conflict between this subtitle
and arty other law, including Chapter 27 and the Deceptive Trade Practices Consumer Protection Act
(Subchapter E, Chapter 17, Business & Commerce Code), this subtitle prevails.
Sec. 426.003. REGISTRATION OF HOME. (a) A builder shall register a new home with the commission on or
before the 15th day of the month following the month in which the transfer of title from the builder to the
homeowner occurs. The registration must include the informarion required by the corrrrrilssion by rule and be
accompanied by the fee required by Subsection (c).
(b) A builder who enters a transaction governed by this title, other than the transfer of title of a new
home from the builder to the seller, shall register the home involved in the transaction with the commission. The
registration must:
(1) include the information required by the commission by rule;
(2) be accompanied by the fee required by Subsection (c); and
(3) be delivered to the commission not later than the 15th day after the earlier of
(A) the date of he substantial comoletion of the home or other residential cons 'on
ro'
(B) the date the new home is occupied; or
(C) the date of issuance of a certificate of occupancy or a certificate of completion.
(c) A builder must remit to the commission a regrstratron fee for each home regrstered wrth the
commission in an amount determined by the commission. The fee set by the commission under this subsection
may not exceed $125.
(d) The commission may assess a late payment penalty that does not exceed $500 against a builder who
fails to pay a required registration fee in the time prescribed by this section.
Sec. 426.004. FEES. (a) A party who submits a request under this subtitle shall pay atry amount required by the
commission to cover the expense of the third party inspector.
(b) The commission shall adopt rules permitting a waiver or reduction of the inspection expenses for
homeowners demonstrating a financial inability to pay the expenses.
(c) If the transfer of the title of the home from the builder to the initial homeowner occurred before
January 1, 2004, or if the contract for improvements or additions between the builder and homeowner was
entered into before January 1, 2004, the commission shall register the home and the builder shall pay the
registration fee required by Section 426.003. , _ ^..,..,. F ~ , ».>a mrnPncec incurred to complete an inspection
Sec. 426.005. PREREQUISITE TO ACTION. (a) A homeowner or builder must comply with this subtitle
before initiating an action for damages or other relief arising from an alleged construction defect.
(b) An action described by Subsection (a) must be filed:
(1) on or before the expiration of any applicable statute of limitations or by the 45th day after the
date the third party inspector issues the inspector's recommendation, whichever is later; or
(2) if the recommendation is appealed, on or before the expiration of arty applicable statute of
limitations or by the 45th day after ffie date the commission issues its ruling on the appeal, whichever is
later.
(c) Any claim for personal injuries, damages to personal goods, or consequential damages or other retie
arising out of an alleged constmction defect must be included in arty action concerning the construction defect.
claiman of payment was omade pursuant to a calum made under an insurance pot cy ogated to the rights of a
(fl A homeowner is not required to comply with this subtitle if.
(1) t the time a homeowner and a builder enter into a contract covered by this title the builder
was not reastered; or
(2) the certificate of registration of the builder has been revoked.
Sec. 426.006. TIME FOR REQUESTING INSPECTION AND DISPUTE RESOLUTION. (al For an alleged
defect discovered during an applicable warranty period. the state-sponsored inspection and dispute resolution
process must be requested on or before the second annrversary of the date of discovery of the conditions
claimed to be evidence of the construction defect but not later than the 90th day after the date the applicable
warranty period expires. .~ _ _.~..__. --.,.._...,... ,.a>.~h;tAh;l;iv And was not dlscov r 1
( If the alleged defect wouid vioisie me auu~~v.v w •t,. rl. hrahle wArrantV
eno me state-s onsorea u~ u~„ wuu ...~ ..... =.ti~•-~~-- ______ _____- -
1 on or before the second annivers of the date of discov of the conditions claimed to be
evidence of the construction defect: and
2 not later than the 10th anmversarv of the date of the initial transfer of title from the builder to
the initial owner of the home or improvement that is the subiect of the dispute or if there is not a
closin the date on which the contract for construction of the improvement rs entered mto.
Sec. 426.007. ADMISSIBILITY OF CERTAIN EVIDENCE. A person who submits a request for state-
sponsored inspection and dispute resolution or responds to a request under Chanter 428 must disclose in the
request or response the name of any expert who, before the request is submitted, inspected the home on behalf
of the requestor or respondent in connection with the construction defect alleged in the request or response. If
an expert's name is known to the requestor or respondent at the time of the request or response and is not
disclosed as required by this section, the requestor or respondent may not designate the person as an expert or
use materials prepared by that person in:
(1) the state-sponsored inspection and dispute resolution process arising out of the request; or
(2) a~ action arising out of the construction defect that is the subject of the request or response.
Sec. 426.008. REBUTTABLE PRESUMPTION OF THIRD PARTY INSPECTOR'S RECOMMENDATION
OR RULING BY PANEL OF STATE INSPECTORS. (a) In any action involving a construction defect brought
after a recommendation by a third party inspector or Wiling by a panel of state inspector; on the existence of the
construction defect or its appropriate repair, the recommendation or ruling shall constitute a rebuttable
presumption of the existence or nonexistence of a constmction defect or the reasonable manner of repair of the
construction defect. A party seeking to dispute, vacate, or overcome that presumption must establish by a
preponderance of the evidence that the rewmmendation or ruling is inconsistent with the applicable warranty
and building and performance standazds.
(b) The presumption established by this section applies only to an action between the homeowner and
the builder. A recommendation or ruling under this subtitle is not admissible in an action between any other
P~~- _ ..... ,. _t._~ __y.._......,..,.~.. wnnmmanrlat;nn n7 A 1'illm£ bV a Dan@~
Rules of Evidence.
CHAPTER 427. INSPECTORS
Sec. 427.001. QUALIFICATIONS OF THIRD PARTY INSPECTORS. (a) A third party inspector approved by
the commission must:
(1) meet the minimum qualifications prescribed by this section and any other qualifications
prescribed by the commission by rule; and
(2) submit an application to the commission annually with an application fee in the amount
required by the commission by Wile.
(b) A third-party inspector who inspects an issue involving workmanship and materials must:
(1) have a minimum of three years' experience in the residential construction industry; and
(2) be certified as a residential combination inspector by the International Code Council.
(c) A third-party inspector who inspects an issue involving a structural matter or involving
workmanshi materials and a structural matter must:
(1) be an approved structural engineer or approved architect; and
(2) have a minimum of fiv years' experience in residential construction.
....,.i.,;.,n A ~tn,ctnral matter and an rmrelated issue
inv 1 in wo sm u 11 l~l l ~ ... »... --- - --
(d) Each third-party inspector must receive, in accordance with commission rules:
(i) initial tt~ng regarding the state-sponsored inspection and dispute resolution process and
this subtide; and
(2) annual continuing education in the inspector's area of practice.
(e) A third party inspector may not receive more than 10 percent of the inspector's gross income in a
federal income tax year from providing expert witness services, including retention for the purpose of providing
testimony, evidence, or consultation in connection with a Pending or tlueatened legal action.
(f1 In adopting rules under Subsection (d), the commission shall recognize any continuing education
requirements established for engineers and architects.
Sec. 427.002. STATE INSPECTORS. (a) •Ihe commission shall employ state inspe so~oo~'
(1) review on an appeals Panel the recommendations of third party ~ p
(2) provide consultation to third party inspector;; and
(3) administer the state sponsored inspection and dispute resolution process.
(b) A state inspector must be certified as a residential combination inspector by the International Code
Council.
ro of anomer rs 11V1 1l8VlY av. .•.•-- --
carrvrne out the person s duties or functions as a third-nariv inspector or state inspector.
Ib1 This section does not apply to an mtentional act of mrsconduct or Bross nefheence.
CHAPTER 428. STATE SPONSORED INSPECTION AND DISPUTE RESOLUTION PROCESS
Sec. 428.001. REQUEST FOR RESOLUTION. (a) If a dispute between a homeowner and a builder arises out
of an alleged construction defect, the homeowner or the builder may submit to the commission a written request
for state sponsored inspection and dispute resolution.
(b) The request must:
(1) specify in reasonable detail each alleged construction defect that is a suor consultinrefees
(2) state the amount of arty known out of pocket expenses and angineering g
incurred by the homeowner in connection with each alleged construction defect;
(3) include any evidence that depicts the nature and cause of each alleged construction defect and
the nature and extent of repairs necessary to remedy the construction defect, including, if available,
expert reports, photographs, and videotapes, if that evidence would be discoverable render Rule 192,
Texas Rules of Civil Procedure;
(4) be accompanied by theeeesn who has on behalf of the requestor, inspected the home in
(5) state the name of any p
connection with an alleged construction defect.
(c}Not later than the 30th day before the date a homeowner subnvts a request under this section, the
homeowner must notify the builder in writing of each construction defect the homeowner claims to exist. After
the notice is provided, the builder must be provided with a reasonable opportunity to inspect the home or have
the builder's designated consultants inspect the home.
(d) At the time a person submits a request under this section ffie person must send by certified mazl,
return receipt requested, a wpy of the request, including evidence submitted with the request, to each other
party involved in the dispute.
(e) The commission by rule shall establish methods by which homeowners may be notified of a name,
mailing address, and telephone number of the commission for the purpose of directing a request to the
commission.
(f) The commission shall provide a person who files a request with a copy of the commission's policies
and procedures relating to investigation and resolution of a request.
(g) The commission by rule shall establish a standard form for submitting a request under this section.
(h) The filing of a request under this section tolls the limitations period in any action between the
homeowner and the builder arising out of the subj ect of the request until the 45th day after the date a final,
nonappealable recommendation is issued under this title in response to the request.
Sec. 428.002. BUILDER'S RIGHT OF INSPECTION. (a) In addition to the right o on ~e~~s ute resolution
Section 428.001(c), at any time before the conclusion of the state sponsored inspecti tPo inspect the
process and on the brrildet's written request, the builder shall be given reasonable opportwuty
home that is the subject of the request or have the horn n~sa<y to remedy the construction de~ . of the
construction defect and the nature and extent of repairs
(b) The builder may take reasonable steps to document the construction defect and the condition of the
home.
(c) If the homeowner d mod for subsequent action to be taken by the bur der or the third party inspector
brrilde~s written request, any p
shall be extended one day for each day the inspection is delayed after the fifth day.
Sec. 428.003. INSPECTION BY THIRD PARTY INSPECTOR (a) On or before the 30th da~afte~o fdom the
commission receives a request, the commission shall appoint the next available third-party ~ p
applicable lists of third-party inspectors maintained by the commission under Subsection (c).
(b) The commission shall establish rotes and regulations that allow the homeowner and the builder to
each have the right to strike the appointment of a third party inspector onetime for each request submitted.
(c) The commission shall adopt rules that allow for the commission to maintain a list of available third
party inspectors for the various regions of the state, as required to satisfy the provisions of this title.
Sec. 428.004. INSPECTOR'S RECOIvIIviENDATION. (a) ff the dispute involves workmanship and materials in
the home of a nonstructural matter, the third-party inspector shall issue a recommendation not later than the
30 day after the date the Hurd-Party inspector receives the appointment from the commission.
(b) If the dispute involves a structural ma P in ms heoctor shall uispect the home nolat than the 30th
engineer to be the third party inspector. The third arty ~ p
day after the date the request is submitted and issue a recommendation not later than the 60th day after the date
the third party inspector receives the assignment from the commission, unless additional time is requested by
the third party inspector or a parry to the dispute. The commission shall adopt rules governing the extension of
time under this subsection.
(c) The third party inspector's recommendation must: licable warrant}' and building and
(1) address only the construction defect, based on the app
performance standards; and
(2) designate a method or manner of repair, if any. not include
(d) Except as provided by this subsection, the third party inspector's recommendation may
payment of arty monetary consideration. If the inspector finds for the party who submitted the request, the
commission may order the other party to reimburse all or part of the fees and inspection expenses Paid by the
reauestor under Section 426.004. .,,__ ._ _.,:..,r,,,,co v~ nr inspection exue^.ses under the
the commission's Internet website.
Sec. 428.005. THREAT TO HEALTH OR SAFETY. A builder who receives owri~ ~~i~tt of theeresiden eg
to a construction defect that creates an imminent threat to the health or safety
shall take reasonable steps to cure the defect as soon as practicable. ff the builder fails to cure the defect in a
reasonable time, the homeowner may have the defect cured and recover from the builder the reasonable cost of
the cure plus reasonable attorney's fees and expenses associated wrth cunng the defect in addition to any other
damages not inconsistent with this subtitle.
CHAPTER 429. APPEAL OF THIRD PARTY INSPECTOR'S RECOMMENDATION
Sec. 429.001. APPEAL. (a) A homeowner or builder may appeal a Hurd Party rnspectot's recormne<rdation on or
before the 15th day after the date the recemmendation is i~iruis~ector's recommendation, the executive director
(b) If a homeowner or builder appeals a third party p
shall appoint three state inspectorsmme> one of the state pectors omn die panel must be a l~n ed p ofess' onal a
dispute regazding a structural
engineer.
(c) The panel shall: rules adopted by the
(1) review the recommendation for comttliance with this title as required by
commission; rns ector or remand the
(2) approve, reject, or modify the rins~mmendan on of the third-Party ~ p
dispute for further action by the third-party ~ Pce? ~ not later than the 30th day after the
(3) issue written findings of fact and a ruling on the app
date the notice of appeal is filed with the commission.
CHAPTER 430. WARRANTIES AND BUILDING AND PERFORMANCE STANDARDS
Sec. 430.001. LIMITED STATUTORY WARRANTIES AND BUILDING AND PERFORMANCE
STANDARDS. (a) The commission by rile shall adopt limited stadtnto~s eacerroarnrties and building and
performance standards for residential construction that comply
(b) The warranty periods shall be:
(1) one yeaz for workmanship and materials; yrter~; and
(2) two years for plumbing, electrical, heating, and air conditioning delivery sy
(3) 10 years for major structural components of~eohrtn nce standards must:
(c) The limited statutory warranties and building and p
(1) require substantial compliance with the nonelectrical standazds contained in the version of the
International Residential Code for One and Two Family Dwellings published by the International Code
Council that is applicable under Subsection (d) and the electrical standazds contained in the version of
the National Electrical Code that is applicable under Subsection (e);
(2) include standazds for mold reduction and remediation that comply with Section 430.003;
(3) establish standards for performance for interior and exterior components of a home, including
foundations, floors, ceilings, walls, roofs, drainage, landscaping, imgatton, heating, cooling, and
electrical and plumbing components; and
(4) contain standards that are not less stringent than the s~d~ds~eq~ urb24 C F.R. Sections
Department of Housing and Urban Development for FHA pmgr
203.202 tirrough 203.206.
(d) The International Residential Code for One and Two Family D Wellazrrengnstt~ and building and ectn
aspects of residential construction for the purposes of the limited statutory
performance standards adopted under this section is:
(1) for residential construction located in a municipality or the extraterritorial jurisdiction of a
municipality, the version of the International Residential Code applicable to nonelectrical aspects of
residential construction in the municipality under Section 214.212, Local Government Code;
(2) for residential construction located in an unincorporated area not in the ~~le toun~
jurisdiction of a municipality, the version of the International Residential Code app
nonelectrical aspects of residential construction in the municipality that is the county seat of the county
in which the construction is located; and
(3) for residential construction located in an unincorporated azea in a coimry that does not
contain an inwrporated azea, the version of the International Residential Code drat existed on May 1,
2001. lies to electrical aspects of
(e) The National Electrical Code for One and Two Family Dwellings that app
residential construction for the purposes of this section is:
(1) for residential construction located in a municipal l cable to electrical aspects ofresidential
municipality, the version of the National Electrical Code app
construction in the municipality under Section 214.214, Local t;,ovemment Code;
(2) for residential construction located in an unincorporated area not in the extraterritorial
jurisdiction of a municipality, the version of the National Electrical Code applicable to electrical aspects
of residential construction in the municipality that is the county seat of the county in which the
construction is located; and
(3) for residential construction located in an unincorporated area in a county that does not
contain an incorporated area, die version of the National Electrical Code that existed on May 1, 2001.
(f) Except as provided by a written agreement between the builder and the initial homeowner, a warranty
period adopted under this section for a new home begins on the earlier of the date of:
(1) occupancy; or
(2) transfer of tide from the builder to the initial homeowner.
(g) A warranty period adopted under dris section for an improvement other than a new home begins on
the date the improvement is substantially wmpleted
(h) The building and performance standards adopted by the commission render this section may be
adopted in phases and amended or supplemented by the commission fmm time to time as diem ~~~~ or
receives additional evidence or information from task forces or other sources regarding any P
developments in die areas of residential homebuilding practices, Procedures, or technology.
Sec. 430.002. WARRANTY OF HAgI'[ABILITY. (a) The construction of each new home or home
improvement shall include the warranty of habitability.
(b) For a construction defect to be actionable as a breach of the warranty of habitability, the defect must
have a direct adverse effect on the habitable areas of the home and must not have been discoverable by a
reasonable prudent inspection or examination of the home or home improvement within the applicable warranty
periods adopted by the commission under Section 430.001.
Sec. 430.003. MOLD REDUCTION AND REMEDIATION; TASK FORCE. (a) The building and Performance
standazds adopted under Section 430.001 must include measures that are designed to reduce the general
population's exposure to mold often formed in water damaged building materials and that include:
(1) methods by which mold, water damage, and microbial volatile compounds in indoor
environments may be recognized; and
(2) recommended management practices for:
(A) limiting moisture intrusion in a home, which may include the use of a water leak
detection system listed by Underwriters Laboratories that is capable of shutting off a valve on the
main water line coming into the structure immediately upon detecting a water leak in the
structure; and
(B) mold remediation.
(b) The commission shall appoint a task force to advise the commission with regazd to adoption of
standazds under this section. The task force must include representatives of public health officers of this state,
health and medical experts, mold abatement experts, and representatives of aff~~ible limits for expos e to
The commission and the task force shall consider the feasibility of adopting pe
mold in indoor environments.
Sec. 430.004. CERTAIN DESIGN RECONIMENDATIONS; ADVISORY COMMITTEE. The commission
shall appoint a task force to develop design recommendations for residential construction that encoruage tarn
harvesting and water recycling.
Sec. 430.005. ALTERNATIVE STANDARDS FOR CERTAIN CONSTRUCTION. ~ For the purpose of this
title, the only statutory warranty and building and performance standazds that apply to residential construction
15.0011(11 orf the W~erf Code and located wrnsthanr5~ mil s of an intemau'onal border aze the standards
established for colonia housing programs administered by the Texas Department of Housing and Community
Affairs, unless a county coaunissioners court has adopted other building and performance standazds authorized
by statute. __ __. _.e....,. 9 h,» tiler in an ar ' ~ Subsel'tion (al from the re~stra i n
subtitle.
Sec. 430.006. STATUTORY WARRAN"IIES EXCLUSIVE. The warranties established under this chapter
supersede all implied wazranties. The only warranties that exist for residential construction or residential
improvements are;
warranties created by this chapter;
(z) warranties created by other statutes expressly referring to residential construction or
residential improvements;
any express, written wazranty acknowl~ g~ ~e hon 4 O.WS(al as de cribed by that section.
Sec. 430.007. WAVER BY CONTRACT PROHIBITED. A contract between a builder and a homeowner may
not waive the limited statutory warranties and building and performance standazds adopted under this chapter or
the warranty of habitability. This section does not prohibit ao 11id~ rend i ~r ~ p Ir from contracting for
more stringent warranties and building standards than are p
COMPANY. (a) The commission may approve
Sec. 430.008. APPROVAL OF THIRD PARTS' R'ARRANTS'
as a third party warranty company for the purposes of Section 430.009:
(I) an entity that has operated warranty programs m thrs state for at least five years;
(2) a company whose performance is insured by an insurance company authorized to engage in
the business of insurance in thrs state; or
(3) an inswance company that insures fi1e warranty obligations of a builder render the statutory
warranty and building and performance standazds. hcation and fee in the
(b) A third party warranty company must submit to the commission an annual aPP roved under this
form and in the amount required by the commission by rule before the company may be app
section.
COMPANY. (a) A builder may elect to provide a warranty
Sec. 430.009. THIRD PARTY WARRP'Nt1'
through a third party warranty company approved by the commission. roviding the warranty:
(b) A transfer of liability r1lIIrrdi tazlr bs~slts warranty ob)hgatio~nsersusrder t~hisrlchapter ~~ are covered by the
(1) agrees to pert warranty company; and
warranty provided through the third party
(2) actually pays for or corrects arty constnrction defect covered by the warranty provided
through the third party warranty company.
(c) A third parry warranty company approved by the commission has all of the obligations an en ghts of
a builder under this subtitle regazding performance of repairs to remedy construction defects or paym
money instead of repair.
(d) The third party warranty company may not assume liability for personal injuries or damage to
personal property. A builder does not avoid liability for personal injuries or damage to personal property for
which the builder would otherwise be liable under law by providing a written warranty from a third party
w'~tY comPanY• is not liable for any
(e) A compazry that administers a warranty for a third party warranty company
damages resulting from a construction defect or from repairs covered under the warranty.
Sec. 430.010. MINIMUM STANDARDS FOR DETERMINATION OF DEFECT. A third party warranty
company shall use defect inspection procedures substantially similaz to the procedures adopted by the
commission under this subtitle. A warranty company may adopt warranty standards in addition to the standazds
adopted by the commission. A third party warranty company may not reduce the limited statutory warranty and
building and performance standazds, except that a third party warranty company shall not be required to provide
a warranty of habitability.
Sec. 430.011. EFFECT OF SUBTITLE ON OTHER RIGHTS AND OBLIGATIONS. (a) Except as permitted
by this subtitle, an express, written contract between a homeowner and a builder may not limit the obligations of
a builder under this title.
(b) After the issuance of written findings of fact and a ruling on an appeal under Chapt breach of a
homeowner may bring a cause of action against a builder or third party warranty company
limited statutory warranty adopted by the wmmission under this subtitle. In an action brought under this
subtitle, the homeowner may recover only those damages provided by Section 27.004.
(c) Breach of a limited statutory warranty adopted by the commission or breach of the statutory warranty
of habitability shall not, by itself, constitute a violation of the Deceptive Trade Practices Consumer Protection
Act (Subchapter E, Chapter 17, Business ~ Commerce Code).
CHAPTER 431. ENERGY-EFFICIENT BUILDING ACCREDITATION PROGRAM
1709(bl_ (il. and (kll.
(b me wnu...aa ~* tinn .with the Enerev Svstems Laboratorv at the Texas Eneineerine
L T r , e,nn nn Fnvironmental Uuatiw
1 home D ers com ac .no.,.,a..,......... r. _ -- -- -
to a morteseelender qualify for enerev-effiaent mortaaees under the National Housins Act; and
a.,~ ti,., ,~ nt,nv codes that meet or
and Safety Code
CHAPTER 436. GENERAL PROVISIONS
Sec. 436.001. DEFINITIONS. In tins subtitle:
(1) "Arbitration" means the procedure for dispute resolution described by Section 154.027, Civil
Practice and Remedies Code.
(2) "Arbitration services provider" means a person that holds itself out as:
(A) managmg, coordinating, or administering arbitrations;
(B) providing the services of arbitrators;
(C) making referrals or appointments to azbitrators; or
(D) providing lists of arbitrators.
(3) "Arbitrator" means a neutral individual who hears the claims of the parties to a dispute and
renders a decision and who is: ~ to the dis ute;
(A) chosen by the parti P
(B) appointed by a court; or
(C) selected by an azbitration services provider under an agreement of the parties or
applicable rules.
Sec. 436.002. APPLICABILITY. (a) This subtitle applies only to an arbitration of a dispute between a
homeowner and a builder that involves an allege e~~iructioYea 17ei Civil Practice and Remedies Code, and
ib) The requirements of this subtitle supp beP
the Federal Arbitration Act (9 U.S.C. Sections 1 16), as amended.
Sec. 436.003. VENUE. (a) An azbitration of a dispute involving a construction defect shall be conducted in the
county in which the home alleged to contain the defect is located.
(b) The regrrements of this section may not be waived by contract.
Sec. 436.004. RESIDENTIAL CONSTRUCTION ARBITRATION TASK FORCE. (a) The commission shall
appoint a task force to study residential arbitrators and arbitration and advise the commission with respect to
residential azbitrators and azbitration.
CHAPTER 437. REPORTING REQUIREMENTS
Sec. 437.001. AWARD FILING. (a) If an arbitration award is filed in a court of competent jurisdiction in this
state, the filer shall also, not later than the 30th day after the date an award is made in a residential construction
arbitration, file with the cormission a summary of the arbitration award that includes:
(1) the names of the parties to the dispute;
(2) the name of each party's attorney, if any;
SUgTT'f(,E E RESIDENTIAL CONSTRUCTION ARBITRATION
(3) the name of the arbitrator who conducted the azbitration;
(4) the name of the arbitration services provider who administered the arbitration, if arty;
(5) the fee charged to conduct the azbitration;
(6) a general statement of each issue in dispute;
(7) the arbitrator's determination, including the party that prevailed in each issue in dispute and
the amount of any monetary awazd; and
(8) the date of the arbitrator's award.
(b) The commission shall establish rules to permit the voluntary filing of the infomuition listed in
Subsection (a) by any interested party. Any agreement prohibiting the disclosure of the information listed in
Subsection (a) is unenforceable.
Sec. 437.002. ENFORCEMENT. (a) The commission by rule shall establish a fee not to exceed $100 for the
late filing of an arbitration awazd and procedures for the collection of that fee.
(b) A party to an azbitration, or an attorney for a party, may report an overdue filing of an azbitration
awazd to the commission.
CHAPTER 438. ENFORCEABILITY OF RESIDEN'T'IAL CONSTRUCTION ARBITRATION AWARDS
Sec. 438.001. GROUNDS FOR VACATING AWARD. In addition to grounds for vacating an azbitration awazd
under Section 171.088, Civil Practice and Remedies Code, on application of a party, a court shall vacate an
awazd in a residential construction arbitration upon a showing of manifest disregard for Texas law.
SUBTITLE F INSPECTION OF NEW RESIDENTIAL CONSTRUCTION
CHAPTER 446. RESIDENTIAL CONSTRUCTION IN UNINCORPORATED AREAS AND OTHER
AREAS NOT SUBJECT TO MUNICIPAL INSPECTIONS
Sec 446 001 APPLICABILITY OF CHAPTER This chanter applies to residential construction described by
Sections 401 003(al(1) (21 and (3) m an unincorporated area and to other azeas not subtect to mumcroal
inspections.
Sec 446 002 INSPECTION REQUIRED (al A builder shall have a new home or other improvement to which
occur a5 necess oaseu u VII LL1G JMV Vi • ~•~ ~~ --- -- --
(d1 The bmlder shall be responsible for contractive with a fee insnert~* authorized by this chanter to
perform the inspections required by this section.
(e) The commission may establish fees necessary to administer this subtitle. Such fees m_~lv be included
in the home reedstration fee repaired by and descnbed in Section 426.003(cl.
Sec. 446.003. ELECTRONIC REPORTING SYSTEM. a The commission shall establish an Internet-based
- .. ,-- ---___.__a -....e,..aa r„~..a„rnrc will use the lntemet-
~f a home as reauired by Section 426.003.
covering: and
(31 final inspection when the home is completed.
.. _ _t_ :_---.......,.. ae~...;r.o,t ;., S„hsecti~n (bl shall
c ter
~~~ Section 430 001(dl: and
wmtine•
HAIL 11VJUKf11~~,c. a .•,•~ ~•••,•••,--
windstorm and hail insurance cover a is available under Ch ter 2210 Insurance Co e.
. ._-' --._....,... ~,, c~;~., aaF not- the build
Insurance Code.
VIl LLlll VuaV.m .r.. -
the provisions of Subtitle F (Ch ~+er 4461 which is effective 9/1/08.