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IS YOUR STATE NEXT?
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TEXAS REGULATES HOMEBUYERS!
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How Texas Home Building Industry shaped the Texas Residential Construction
Commission (TRCC) and regulates new homebuyers

Quorum Report: Consumers Say Abolish TRCC
Wednesday, 24 September 2008

SUNSET COMMISSION QUESTIONS WHETHER ABOLISHING TRCC IS THE RIGHT SOLUTIONS
“ Texas history will record TRCC to be the hallmark of a bad state policy, driven by the building industry’s agenda to unnecessarily punish homebuyers for the mistakes of their builder,” said Janet Ahmad, president of Homeowners for Better Building.  “Homeowners helplessly stand by frustrated as their homes and values are falling all because of industry greed and higher profits without accountability.”

Quorum Report
SUNSET COMMISSION QUESTIONS WHETHER ABOLISHING TRCC IS THE RIGHT SOLUTIONS 
 â€œTexas history will record TRCC to be the hallmark of a bad state policy, driven by the building industry’s agenda to unnecessarily punish homebuyers for the mistakes of their builder,” said Janet Ahmad 

Sunset staff Director Joey Longley told Sunset commissioners today that he made the decision to recommend the abolition of the Texas Residential Construction Commission, explaining that he believed a detailed list of proposed fixes would not have been enough to fix the problems at the embattled state agency.

Under direct questioning from state Sen. Bob Deuell (R-Greenville) and state Rep. Ruth Jones McClendon (D-San Antonio), Longley said that Sunset staff went through a long line of problems with the agency in an attempt to look for solutions. In the end, Longley said that he decided that Sunset staff couldn’t make all the recommendations that are needed to fix the agency. In lieu of a partial fix, Sunset staff opted for the agency’s termination.

“It’s unfixable,” Longley said of the agency.

The recommendation to do away with the TRCC last month was nothing short of a bombshell. The TRCC was created five years ago to provide more oversight of homebuilders and to facilitate more timely resolution of disputes between homeowners and builders.

By most accounts, though, the agency has not lived up to expectations. For example, Sunset staff noted in their report that a remedy created specifically to help homeowners receive remedy for problems, the State Inspection Process, has not performed well. The report noted that the average time to process a request through that program was 147 days “although outstanding cases have been open for as long as 20 months.”

Several commission members questioned, though, whether the abolition of the TRCC would be a better option. McClendon told Longley that she had expectations that Sunset staff provide some direction on how to make the agency look after homeowners’ interests better. McClendon was a co-author of legislation last session aimed at improving the TRCC’s performance.

She then pressed Longley to come up with a list of recommendations for the Sunset Commission to consider. “The public believed this agency was put forth to help them deal with unscrupulous builders,” McClendon said. “We need to have something in this state to help them. I would ask you to help us put something together to take to the Legislature in January.”

She added that she had a list of her own proposals that she wanted the Commission to review. That set of recommendations would include, for instance, the creation of a recovery fund so that homeowners could still collect on judgments against a builder even if he goes out of business.

TRCC Chairman Paulo Flores made an impassioned plea that Sunset spare the agency. He argued that his agency should be given enough time to fully implement the reform package passed by lawmakers last session. He said that the agency has had less than a year to begin addressing deficiencies in performance. He added that the uncertainty hanging over the agency has made it more difficult to hire new staff.

He added his belief that the TRCC remains a good alternative to litigation for most homeowners. “Litigation is a poor method for resolving builder disputes,” he said. “That’s what the TRCC was set up to do.” If the state does away with the TRCC, Flores warned that home inspections in unincorporated areas would end and homeowners would no longer have standard warranties included at purchase.

Fellow commissioner Mickey Redwine also argued against the agency’s abolition but he admitted that the agency has a hard task in restoring the public’s trust. He suggested that the state license all homebuilders. In addition, he said lawmakers should renew the agency for only two years so that commissioners would have to demonstrate by the next review cycle that they’ve achieved certain change benchmarks.

He said the staff recommendation was a welcome development because it got the agency’s attention. The primary reason for doing away with TRCC is the lack of trust in the agency. He noted that commissioners have voted down in the past consumer protections such as requiring builders to display their TRCC registration number on trucks and signs.

“It is this mentality that must change,” he said. “The recommendation shows we haven’t earned the public trust and never will if we continue on the same path.”

Public testimony continued throughout the remainder of the afternoon. The Texas Association of Builders argued against the TRCC’s destruction. TAB first vice president Ron Connally said, “The agency provides undeniable benefits and protections for consumers. Without the agency and its safeguards, the home building industry again would operate completely without regulation.”

Consumer group representatives advocating the TRCC’s abolition were present at today’s hearing as well as a dozen or so members of the public who were wearing anti-TRCC stickers. At times, they loudly applauded statements critical of the agency.

“ Texas history will record TRCC to be the hallmark of a bad state policy, driven by the building industry’s agenda to unnecessarily punish homebuyers for the mistakes of their builder,” said Janet Ahmad, president of Homeowners for Better Building.  “Homeowners helplessly stand by frustrated as their homes and values are falling all because of industry greed and higher profits without accountability.”

 
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