To resolve construction defect disputes with a residential home builder or remodeler, Texas homeowners must currently follow the procedures set forth under the Texas Residential Construction Liability Act (RCLA). The RCLA was enacted in 1989 to help resolve construction disputes between homeowners and contractors and limit the liability of residential builders. Since 1989, various amendments have transformed the RCLA into what it is today.
History of the Texas Residential Construction Commission (TRCC)
In 2003, the Texas Residential Construction Commission Act (TRCCA) was enacted to create the Texas Residential Construction Commission to oversee the resolution of construction defect disputes between homeowners and builders. Homeowners were required to submit their written complaints with the Commission and utilize the new state-sponsored inspection and dispute resolution process (SIRP) before going to court. Texas Residential Construction Commission Act, 78th Leg., R.S. ch. 458, 2003 Tex. Gen. Laws 1703 (expired Sept. 1, 2009). SIRP was designed to facilitate construction defect disputes by demanding inspections and a reasonable review of claims; however, only 12 percent of state inspections performed were resolved as a result of SIRP. Sunset Advisory Commission on Texas Residential Construction Commission, Final Report 2009 (July 2009). Although the TRCCA attempted to foster trustworthiness and integrity by requiring builders to be at least 18 years of age, be legally able to work in the U.S., register with the commission, and disclose whether they have been convicted of or plead guilty to a crime involving moral turpitude, the TRCC failed to ensure the competence and financial responsibility of builders in Texas. Id. at 6.
Homeowners and builders were subjected to the TRCCA for six years before the Sunset Advisory Commission found the process to be lengthy and sometimes difficult for homeowners to follow. According to the July 2009 Sunset Advisory Commission Final Report, the TRCC was fundamentally flawed and did more harm than good. The Sunset Advisory Commission recommended that the TRCC be abolished and repealed by September 1, 2009 while allowing the Commission to wind down its activities until September 1, 2010. Additionally, the RCLA already offered a less difficult and less expensive method for regulating construction dispute resolutions.
Residential Construction Liability Act (RCLA)
Today, the RCLA serves to provide a framework by which residential construction disputes are resolved, and is found in Chapter 27 of the Texas Property Code. The RCLA applies to any action that seeks to recover damages from construction defects, but does not apply to actions regarding wrongful death, survival, damage to non-residential goods, or personal injury. Tex. Prop. Code § 27.002 (West 2017). The RCLA provides contractors with an opportunity to cure construction defects before filing a claim with the court. Under the RCLA, a homeowner has 60 days to provide the contractor with written notice of the construction defect. Tex. Prop. Code § 27.004 (West 2017). Upon receiving the notice, the contractor is entitled to request evidence of the defect and is allowed 35 days to inspect the issues and an additional 10 days to submit an offer of settlement to the homeowner. Id. If a homeowner does not accept an offer from the contractor within 25 days or states in detail why the offer is unreasonable, the offer is considered rejected and the reasonableness of the final offer of settlement may be determined by a court. Id.
The current version of the RCLA offers ample room for negotiation and settlement of disputes between homeowners and home builders before litigation. It is important to understand that the RCLA is not an independent cause of action. Rather, the act serves as a procedural framework to help resolve disputes. Procedures under the act can be complex, and an experienced real estate attorney should be consulted as soon as construction defect issues arise.
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