The State of Unregulated Homebuilding
Smoke and Mirrors of the Homebuilding Industry and its Texas Residential Construction Commission (TRCC)

Texas is the birth place of tort reform, the “builders right-to-repair”, which came about in the 90 's  It was the brain child of David Weekley (Texans for Law Suit Reform),  Bob Perry, and the National Association of Home Builders (NAHB). Their aim was to broadly limit liability for defectively built homes by limiting builder warranty responsibility and limit their liability under the Deceptive Trade Practice (DTPA).

Between 1994 and 1996, the building industry formed a joint venture with the American Arbitration Association (AAA) to privatize the nation’s judicial system. In 1994 AAA formed a task force comprised of 55 members of the construction industry and its advocates “in order to better serve the needs of the construction industry.” One of its tasks was to write the AAA Binding Arbitration Construction Defects Rules, which were adopted in May 1996. At the same time, NAHB developed and promulgated a builder contract to all of its members nationwide with a clause that read, “if a dispute arises out of this contract it shall be arbitrated by the AAA, under the rules adopted by AAA.”

Since 1996, homeowners have been prohibited from filing lawsuits and going to court to hold builders accountable.  Attorneys stopped taking cases because it was not financially feasible and for the most part homeowners lost in the one-sided, repeat binding arbitration business with AAA and other private arbitration companies that sprang up. 

Very few homeowners have been able to file lawsuits either legitimate or frivolous.  From the consumers side the legal profession, lawyers have been conspicuously absent.  They have abandoned the fight to restore consumer rights, and left it in the hands of consumer advocates.

In 1998, a consumer revolt began with the creation of HomeOwners for Better Building that joined with many already well-established consumer advocacy groups.

In 2000, US Congressmen Charles Gonzales and Ciro Rodriguez filed a federal arbitration bill called the American Homebuyer Protection Act which is designed to prohibit predatory binding mandatory arbitration (BMA) by the building industry.

In 2001, HomeOwners for Better Building approached Texas Senator Leticia Van de Putte with a Home Lemon Law bill which was the first ever filed in the nation. That year builder Bob Perry spent just under $4 million in campaign contributions and successfully blocked hearings on the Home Lemon Law.

During the next Texas Legislative secession (2003), the home builders sponsored the Texas Residential Construction Liability Act (TRCLA) that created what is known today as the Homebuilder Protection Agency (HPA), “built by the builders, for the builders.” That same year, Bob Perry’s contributions were again just under $4M and the Texas Association of Builders (TAB) contributed another million, causing consumer participation to effectively shut down. See Below: Texas Observer, "The Agency that Bob Perry Built” 

The unregulated and powerful  Texas homebuilding industry has successfully stopped lawsuits with abusive binding arbitration clauses and has taken Tort Reform to a whole new level with its very own TRCC state agency, which actually regulates homeowners and forces them into legal disputes they can 't afford.

In 2006, the State Comptrollers office called for the abolishment of TRCC when it found that 86% of homeowners who confirmed defects in their homes through TRCC did not get their homes repaired. Recently, the Sunset Commission Staff Review found that 88% of homeowners were left with legal disputes and called for the abolishment of TRCC.

See: TRCC is the Punishment Phase of Homeownership in Texas

See: As Goes Texas So Goes the Nation

See: Perry's Gifts Keep on Talking 

See: Homebuilder’s Right-to-Repair Illusion
An examination of Nevada’s 3-year-old builder’s Right-to-Repair law confirmed that the law fails to stop lawsuits. As reported: “In 2000 — three years before the law was passed — 52 residential and commercial construction-defect cases were filed. In 2001 the number of new cases surged to 69, and by 2003 the number hit 70, according to District Court records. After receding slightly in 2004 to 64 defect cases filed, the number again jumped in 2005, with 79 cases filed.”

It all started in Texas.  NAHB lobbied our state legislature to pass the Right-to-Repair Act and has been successful in 32 states so far.