The Residential Construction Liability Act and the New Residential Construction Commission
By Cheryl C. Turner
 
The Residential Construction Liability Act1 ("RCLA") was enacted by the Texas Legislature in1989 for the stated purpose of restoring "a fair and appropriate balance to the resolution of residentialconstruction disputes between contractors and owners." Homebuilders and home warranty companies argued that contractors should have an opportunity to cure construction defects before being subjected to the monetary settlement provisions ofthe Texas Deceptive Trade Practices – Consumer Protection Act2 ("DTPA"). By limiting ahomeowner’s damages in certain, specific circumstances, the RCLA was intended to encourage the resolution of construction disputes and to protect and reward responsive contractors who timely fixed their mistakes.

Conceptually, the RCLA made sense. Homesare a large and emotional purchase for most consumers, so encouraging homeowners and contractors to fix the home rather than engage in protracted litigation is a laudable goal. When the RCLA was enacted in 1989, consumer advocates embraced the concept of an "opportunity to cure," so long as homeowners still had the protections of the DTPA when builders did not make reasonable attempts to fix the home and settle the claim.

Nevertheless, despite the avowed purpose of builder lobbyists to foster "balance" in the resolution of construction disputes, such builder lobbyists and advocates have, at nearly every legislative session since the RCLA was passed, attempted to redesign it to further restrict homeowner rights. The laudatory words of the RCLA’s proponents belie their intent to create blatant special interest legislation that would protect good and bad builders alike.

In the 2003 Legislature, the builders finally realized the fruits of their well-funded lobbying efforts. Despite the fact that homeowners with serious construction defect claims against their builders already faced nearly impossible odds of ever being made whole, a new and labyrinthine set of procedures was enacted to all but bar the courthouse door to aggrieved homeowners. Although the RCLA is still the statute that governs the remedies available in residential construction defect disputes, homeowners with complaints against a "contractor" will now be required to submit their claim to the newly formed Texas Residential Construction Commission ("TRCC" or "Commission") before triggering the builder’s right to cure. The homeowner’s obligation to make his claim before the Commission is a prerequisite to filing a lawsuit or even a claim in arbitration. Section II of this article will discuss the new Texas Residential Construction Commission...
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