THE NEW TEXAS RESIDENTIAL CONSTRUCTION COMMISSION ACT
and
THE AMENDED RESIDENTIAL CONSTRUCTION LIABILITY ACT
WHAT YOU NEED TO KNOW

Abstract

This paper is the latest update of a series of seminar papers by my partner, Cheryl C. Turner and me on helping Texas homeowners and attorneys deal with the Texas Residential Construction Liability Act (“RCLA”) and now the Texas residential Construction Commission Act (“TRCCA”). I want to acknowledge and thank Cheryl who, last summer, wrote the vast majority of the sections of this paper dealing with the new TRCCA. In 2003, as part of HB730, the Texas Legislature created the Texas Residential Construction Commission (“TRCC” or “Commission”) effective September 1, 2003. The same bill also made significant changes to the RCLA. Those amendments will only be effective on cases that accrue after September 1, 2003. This paper will cover those two statutes and explore the question – Is it really the end of the world as we know it for homeowners with construction defect claims and their counsel?

1. SCOPE
2. INTRODUCTION
3. THE TEXAS RESIDENTIAL CONSTRUCTION COMMISSION ACT
1. Scope of the TRCCA
2. Subtitle D: State-Sponsored Inspection and Dispute Resolution Process
1. THE RELATIONSHIP OF THE TRCCA TO THE RCLA
2. THE “DISPUTE RESOLUTION” PROCESS
1. What kind of disputes are governed by the TRCC?
2. What residential construction disputes are exempt fromthe TRCCA?
3. Filing a claim with the TRCC
4. Construction defects affecting health and safety
5. The state sponsored inspection process
6. Timing and content of the inspector’s recommendation
7. Appealing the inspector’s recommendation
8. Effect of the inspector’s recommendation on subsequent actions
9. What happens after the recommendation is issued?
10. Timing and Limitations
3. WARRANTY AND BUILDING PERFORMANCE STANDARDS
1. The warranty of habitability
2. Statutory warranties
3. Effect of TRCCA warranties on subsequent legal actions
3. The TRCC and Arbitration
4. When Do the New Laws Take Effect?
4. THE RESIDENTIAL CONSTRUCTION LIABILITY ACT
1. Application of the RCLA
1. SCOPE
2. RELATIONSHIP OF THE RCLA TO THE DTPA
3. PARTIES
2. Notice of Defects
1. CONTENT OF NOTICE LETTER
2. ACTUAL DELIVERY SHOULD NOT BE REQUIRED
3. NOTICE, ABATEMENT AND THE RUNNING OF LIMITATIONS
4. COPY OF LETTER SHOULD BE SENT TO WARRANTY/INSURANCE COMPANY
3. Contractor’s Offer of Settlement
1. CONTRACTOR’S OPPORTUNITY TO INSPECT DEFECTS
2. WRITTEN OFFER OF SETTLEMENT
3. CONDITIONAL SALE TO BUILDER
4. CONSEQUENCES OF FAILING TO MAKE A REASONABLE OFFER
5. IMPOSSIBILITY OF PERFORMANCE
4. Response to Settlement Offer
1. ACCEPTANCE OF REPAIR OFFER
2. REJECTION OF THE SETTLEMENT OFFER
5. Limitations on Liability and Damages
1. AFFIRMATIVE DEFENSES
1. No liability for negligence of others
2. Mitigation of damages defense
3. Two exceptions for damages within industry tolerances
4. Reliance on government records
2. COMMON LAW DEFENSES STILL APPLY
3. DAMAGES RECOVERABLE UNDER THE RCLA
6. Procedural Matters
1. STATUE OF LIMITATIONS CONCERNS
2. COUNTERCLAIMS
3. CAUSATION
4. EFFECTIVE DATE OF NEW RCLA PROVISIONS
5. RCLA CASE LAW
1. O’Donnell v. Roger Bullivant of Texas, Inc.
2. Bruce v. Jim Walters Homes, Inc.
3. In re Kimball Hill Homes Texas, Inc.
4. Perry Homes v. Alwattari
5. Sanders v. Construction Equity, Inc.
6. LEGISLATIVE HISTORY OF THE RCLA
1. 1989 Passage of the RCLA
2. 1993 Amendments
3. 1995 Amendments
4. 1997 Failed Amendments
5. 1999 Amendments
6. 2001 Failed Amendments
7. 2003 Amendments
7. CONCLUSION

APPENDIX I: TRCC Commission Duties 40

APPENDIX II: TRCC Commission Process 41

APPENDIX III: Chronological House Cases – New and Used 42

Full Text

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