HOLDING THE HOME BUILDERS ACCOUNTABLE—While most home builders do exemplary work, some use questionable methods to quickly build homes. TexPIRG is working to ensure that if contractors are guilty of shoddy work, they are responsible for the needed repairs.

Homeowners’ Rights: How Builders Abuse The System

When homeowners across Texas get shoddy work from developers the law stands in the way, instead of protecting a homeowners’ rights. As a result, many families have been forced to pay for home repairs that the builders are responsible for.

A major priority for TexPIRG during the spring was the fight for homeowners’ rights. In this effort, TexPIRG has been joined by a coalition including Homeowners for Better Building, Texas Watch, Texas AARP, Homeowners Against Deficient Dwelling and Public Citizen.

Reforming The System
Starting reform with the Texas Residential Construction Commission (TRCC), has been identified by TexPIRG as the first step toward meaningful improvement. This state agency, created in 2003, is ostensibly intended to facilitate dispute resolution between homeowners and builders. In practice, however, the TRCC has served as a barrier to homeowners who have tried to seek restitution from unscrupulous or incompetent builders.

Under current law, if a homeowner discovers flaws in their home that are the responsibility of the builder, they are unable to pursue any legal remedies until they go through the TRCC’s dispute resolution process.

To begin the process, the homeowner must pay a fee of $250. The process itself is a bureaucratic nightmare which can last over a year.

“The mandatory requirement that homeowners pay high fees, and must undergo this extended process deters homeowners from taking corrupt builders to court,” said TexPIRG Federal Consumer Program Director Ed Mierzwinski.

Adding insult to injury, the TRCC lacks any power to enforce its rulings. If a homeowner is fortunate enough to get through the dispute resolution process and obtain a favorable ruling, they often find that no repairs will be made to their home since the builder can simply ignore the TRCC and suffer no penalty for doing so.

TexPIRG is also concerned with the lack of sufficient protections against conflict-of-interest within the TRCC. The members of the TRCC board of directors have close ties with the building industry, while no member of the board has any history of consumer protection.

“Builders can get away with too much in Texas,” said Mierzwinski. “It’s about time we gave families some power to take irresponsible builders to task for shoddy work.”

Fight For Change
On March 19, in a dramatic session that began in the afternoon and dragged into the wee hours of the morning, TexPIRG and other consumer groups laid out the case for TRCC reform to the House State Affairs Committee. In addition, dozens of ordinary citizens showed up to tell their own personal stories of how they have suffered at the hands of the TRCC.

A number of bills to reform the TRCC were considered at the hearing. TexPIRG declared its support for any bill that would: make the dispute resolution process voluntary rather than mandatory, abolish the fees homeowners must pay to the TRCC, increase the TRCC’s enforcement power and put meaningful conflict-of-interest provisions in place for the agency.

Some legislation reforming the TRCC did pass before the end of the session, most notably giving the TRCC some real power to discipline homebuilders who do not offer to repair new home defects. The greatest victory, however, was successfully fending off an attempt to have the TRCC’s review by the Sunset Commission pushed back several more years. Its review will proceed as planned in 2009, giving TexPIRG and its partners another great opportunity to help bring meaningful reform to this state agency.