The state regulatory agency that has overseen the residential construction business since 2003 is being sunsetted beginning September 1st, 2009.

The Texas Residential Construction Commission (TRCC) was set up to regulate new home builders and to have them register with the state.  These registered builders would then have to register their construction jobs that qualified with the state as well and offer a state mandated warranty to the owner.

The state agency was designed to protect home owners from defective building or remodeling jobs by giving consumers an avenue to complain to the state agency, have the job inspected, and force the builder to repair the defect all within a certain timeline.

The Texas Sunset Advisory Board did a review of the agency.  The board ruled that the TRCC was not needed in its current state.  One advisory board staff member said in a report, “The TRCC was never meant to be a true regulatory agency with a clear mission of protecting the public.” The report also said it’s “fundamentally flawed and does more harm than good.”

The board recommended that the TRCC begin the sunset process beginning September 1st, 2009 unless legislation was passed to stop it.

The Texas House of Representatives passed legislation to extend the life of the TRCC with some modifications, but were unable to get the State Senate to vote on it before this year’s session ended.

So what happens now that the TRCC begins it shutdown process tomorrow?  Here are a few noteworthy items from the TRCC:

-The commission will continue to accept home registrations for new homes and residential construction project until September 15, 2009, to allow those builders that transferred title to a new home or substantially completed a construction project in August to complete the home registration for that property.

-The commission will no longer accept new complaints or requests for inspection. However, staff will continue to work on those complaints and requests that were received on or before August 31, 2009.

-The question about the continuation of statutory warranties and the commission-adopted performance standards is debatable. Although the commission believes that Title 16 expires on September 1, 2009, except to the degree that the commission maintains its powers (including its enforcement powers) to complete all preexisting business; it could be argued that the statutory warranties and the commission-adopted performance standards continue until August 31, 2010.

-The safest course of action is for a builder or remodeler to issue warranties and performance standards that are more restrictive than those in Title 16. You can download a word version of the document here and then increase a coverage period or tighten a performance standard to place into your agreements for the next year.

-If it is finally held that the law that created the statutory warranties and supported the commission’s adoption of performance standards will no longer be in effect, the law will revert to what it was before the enactment of Title 16.  Prior to the enactment of Title 16, the courts recognized the implied warranty of good workmanship in construction and the implied warranty of habitability. The courts also recognized that the parties to a written contract could create an express warranty in lieu of the common-law implied warranties if the implied warranties are properly disclaimed and replaced with a suitable express warranty terms.

-If a owner of a new home discovers a defect contact the builder.  If the builder does not respond satisfactorily, you may want to contact an attorney to discuss your legal options.  You can also complain to the Attorney General’s Consumer Complaint Division, Federal Trade Commission, your local County or District Attorney or to your local Better Business Bureau.

For more detailed information, please visit the TRCC FAQ website page for more details.