The Agency that Bob Perry Built
It seemed a boon to homebuyers when the Legislature created a new state agency in 2003 to regulate the home construction industry. For nearly a decade, homebuilders had steadily eroded consumer rights in Texas:
Buyers who moved into brand-new houses and found cracked foundations and leaky roofs had little recourse. Some couldn’t file a lawsuit even if they wanted. They had signed housing contracts that forced them to resolve complaints through binding arbitration hearings notorious for favoring builders.
The Texas Residential Construction Commission was supposed to help change all that.
Legislators talked up the new agency as a forum to resolve impasses between homeowners and homebuilders—a kind of marriage counselor for the housing sector. The agency was supposed to act as a mediator that, when necessary, would require homebuilders to make needed repairs. The commission would keep homeowners out of court and arbitration and save both sides a lot of legal fees. That was the pitch.
The main problem with the TRCC is an almost total lack of power to enforce its own rulings. When the commission does rule in favor of consumers, it can’t force homebuilders to fix the faulty houses.
The result is that homeowners complete the lengthy complaint process and end up right back where they started—facing a court battle or arbitration. Rather than help homeowners, the TRCC makes matters worse.
“It places another hurdle that costs the consumer time and money before they go to court,” says Reggie James of Consumers Union.
James and other consumer advocates who follow housing issues contend that they had almost no say in the drafting of last session’s little-noticed House Bill 730 that created the TRCC.
The final legislation—passed with significant input from the governor’s office—was riddled with industry giveaways that slanted the commission in the homebuilders’ favor. In fact, much of the bill’s language came from John Krugh, general counsel for Houston-based Perry Homes, one of the state’s largest residential construction outfits.
“There was a different spirit down [at the Lege] this time," says Mark McQuality, a Dallas attorney who specializes in representing consumers in housing disputes. McQuality says he was always included in negotiations on housing bills in sessions past, but not in 2003. “They knew they had this one in the bag.”
HB 730 mandates that the building industry hold four permanent seats on the nine-member commission [“Consumers Get Housed,” TO, September 26, 2003]. Gov. Perry appointed Krugh of Perry Homes to fill one of those four spots. Of the other five so-called neutral appointees to the commission, at least four have direct ties to the homebuilding industry.
HB-730 Relating to residential construction, including certain warranties, building and performance standards, and dispute resolution; providing an administrative penalty.
Tomorrow:
I'm sure you have heard the Tx lemon law for vehicles. But what about on homes? Your saving to buy a brand new home. You have your money ready to pay the closing cost. And then a crack develops on the floor of the house. The crack grows and grows. You have already signed all the necessary paperwork. Who has to pay for it? The builder?
