Will the Texas Residential Construction Commission be Abolished?
By: STEPHEN POLOZOLA
During the past few weeks, there have been numerous stories in the newspapers and on television discussing the potential abolishment of the Texas Residential Construction Commission. There have been numerous editorial opinions for and against the TRCC. In my opinion, it would be a travesty to the consumers and homebuilders of Texas for the TRCC to be abolished.
The laws enacting the TRCC provide that unless it was continued through legislation, it would be abolished as of September 1, 2009. This year, the staff of the Texas Sunset Commission reviewed the TRCC and through its written report, recommended the abolishment of the TRCC.
The Sunset Commission is a state agency that is charged with identifying and eliminating waste, duplication and inefficiency in government agencies. The 12-member Commission is a legislative body that reviews the policies and programs of more than 150 government agencies every 12 years. The Commission questions the need for each agency, looks for potential duplication of other public services or programs, and considers new and innovative changes to improve each agency's operations and activities. The Commission seeks public input through hearings on every agency under Sunset review and recommends actions on each agency to the full Legislature. In most cases, agencies under Sunset review are automatically abolished unless legislation is enacted to continue them.
In recommending that the TRCC be abolished and the Texas Residential Construction Commission Act be repealed, the staff of the Sunset Commission stated, in part, “[d]espite recent improvements in the State Inspection Process regarding satisfactory offers of repair, the process is still ineffective and likewise needs to be abolished.”
After its report, the Sunset Commissioners (state legislators) held a public hearing on this very matter. Based on the questions and comments from the Commissioners during the eleven hours of testimony, it did not appear to me that the Commissioners had the same feeling about the TRCC’s abolishment as did the Sunset Staff. One particular concern the Commissioners repeated throughout the testimony was that the abolishment of the TRCC would create a situation where the housing industry was completely unregulated. This possibility did not appear to sit well with the Commissioners.
Currently, the TRCC has authority to regulate homebuilders in a manner that did not exist prior to the creation of the TRCC. For example, builders are now obligated to provide numerous contractual disclosures advising the homebuyer of the TRCC, advising the homeowner how to file a complaint against the builder, and advising the homeowner of binding arbitration. Additionally, the TRCC has the authority to fine and/or discipline builders who violate any one of a laundry list of different actions or inactions. Most importantly, the laws enacting the TRCC now require that all builders provide a statutory warranty to the consumer. In years prior, the warranty provided by the builder was limited to what was provided for in the contract and required by common law. Clearly, these requirements, among numerous others, provide a layer of protection that had not existed prior to the TRCC.
In light of various discussions throughout the housing industry, it appears that the Sunset Commissioners may not recommend the abolishment of the TRCC. However, it is likely that numerous revisions to the TRCC are upcoming. Until the Sunset Commissioners issue their recommendation and the Texas Legislature votes on this issue, we will not know for sure. In any event, it would be surprising if the Texas Legislature voted to abolish the TRCC, abolish the statutory warranty, abolish the right of the TRCC to discipline builders and create a situation where the homebuilders of this State would be operating in an unregulated arena.
Stephen L. Polozola is an attorney with Decker, Jones, McMackin, McClane, Hall & Bates P.C. in Fort Worth and focuses on residential construction. The commentary implies no specific legal advice. Contact Polozola at 817-336-2400 or spolozola@deckerjones.com