State agency making changes
But consumer groups remain skeptical, saying the agency was created in 2003 at the behest of builders to reduce litigation by forcing consumers into a state-run dispute resolution process...Alex Winslow, director of consumer group Texas Watch, said homeowners shouldn't have to pay for the dispute process at all. He's also critical of the agency's governor-appointed board, which has many industry representatives on it — including John Krugh, who works as general counsel for Houston builder Bob Perry's company and helped craft the legislation that created the construction commission. "I think the makeup of the board speaks for itself," Winslow said. "It's dominated by industry insiders, with Bob Perry's lawyer as one of the original appointees. I think that speaks to the agency's leanings."... "The whole premise of this is to wear down the homebuyer," said Ahmad, who has been pushing for a home lemon law, similar to the one for cars.
Houston Chronicle
State agency making changes
But consumer groups contend panel protects home builders
By PURVA PATEL
Copyright 2006 Houston Chronicle
Jan. 7, 2006,
THE COMPTROLLER'S REVIEW
State Rep. Todd Smith, R-Euless, asked the Texas comptroller's office to determine whether:
•Texas homeowners are happy with the Texas Residential Construction Commission claims process
•The TRCC has enough staff and funding
•The TRCC provides disincentives for good building
•The commission's claims process and homeowners' rights compare unfavorably to those of other states
•The commission's board is dominated by industry insiders
Source: Smith letter to the Texas Comptroller of Public Accounts
Duane Waddill was head of the Texas Residential Construction Commission just four days when he learned the state agency often criticized by consumer groups was about to be audited. But Waddill said he was already implementing changes that addressed some of the state comptroller's questions — changes he believed would quell consumer concerns that the agency doesn't do enough to protect homeowners. Audit not expected"It was unexpected to me," Waddill said, referring to the review that was prompted by a request from state Rep. Todd Smith, R-Euless. "I did visit with Rep. Smith after we were well into the process and I told the reviewers the day they walked in the door, 'I'm glad you're here. I believe in auditors and any results you have I will look at and use to make things better.' " But consumer groups remain skeptical, saying the agency was created in 2003 at the behest of builders to reduce litigation by forcing consumers into a state-run dispute resolution process. Ultimately, the commission, which is mainly funded by fees it collects from builders, has created another hurdle for consumers who want their day in court, consumer advocates say. Focus on enforcementWaddill previously worked for the Office of Consumer Credit Commissioner as director of administration and then as chief financial officer at the construction commission. He said he's hired new staff, put more focus on enforcement, and helped reduce fees consumers must pay to start a dispute resolution process with the agency. In 2005, lawmakers gave the commission six new employees. The agency has since hired an attorney to work full-time on enforcement cases, two investigators, a paralegal, and two administrative assistants, bringing the total number of employees to 32. The agency has filed six cases with the State Office of Administrative Hearings against builders, ranging from failing to register with the commission to fraudulently applying for registration, according to the commission. Builders and remodelers that work on pro- jects valued at $20,000 or more must register with the commission. Some 20 more cases could be brought next month, including those to enforce payment of civil judgments homeowners have gotten in court on their own, according to the agency. The agency has the power to assess fees capped at $5,000 per violation of commission rules, revoke registrations and can ask the state attorney general to file injunctions against those who violate the rules. Can't force repairsBut consumer groups have criticized the agency's inability to force a company to make the repairs it recommends. Waddill said the agency plans to implement a new process recently approved by the board to follow up on each dispute that goes through the state's process. "We're going to go to the builder aggressively to get information about how they resolve cases. My expectation is that is going to resolve a lot of these issues because they're not going to want to tell us, 'We're not doing anything,' " he said. "I think I'll be able to argue they are not dealing honestly with trustworthiness and integrity, so we can take action against their license and keep them from operating in Texas." Homeowners can also use any findings against the builder as evidence in court. The agency has received 1,406 complaints since its inception in the fall of 2003. As of late November, 297 have gone through the agency's dispute resolution process. The agency found construction defects in 195 of those cases, no defect in 16, and continues to work on the remaining cases. Fee amounts reducedLast year, fees for consumers to request the resolution process were also dropped to a flat $250, replacing the previous system that charged the homeowner up to $650. And the builder registration fee was also increased to $500 from $125. Although Waddill has made some changes, consumer groups say they don't go far enough. Alex Winslow, director of consumer group Texas Watch, said homeowners shouldn't have to pay for the dispute process at all. He's also critical of the agency's governor-appointed board, which has many industry representatives on it — including John Krugh, who works as general counsel for Houston builder Bob Perry's company and helped craft the legislation that created the construction commission. "I think the makeup of the board speaks for itself," Winslow said. "It's dominated by industry insiders, with Bob Perry's lawyer as one of the original appointees. I think that speaks to the agency's leanings." Up to 150 daysJanet Ahmad, president of Homeowners for Better Building, said no matter what changes the commission makes, the dispute resolution process still takes up to 150 days and remains a hurdle for consumers to pass before they can finally go to court. "The whole premise of this is to wear down the homebuyer," said Ahmad, who has been pushing for a home lemon law, similar to the one for cars. The dispute resolution process has so far taken an average of 100 days to complete, according to the commission. The process and the makeup of the board are dictated by law, Waddill said. "I think that's a public policy decision the Legislature needs to make," he said. "They developed the board makeup. I have found the members are very interested in making sure that consumers are protected and the industry is well regulated regardless of what their background and profession is." In the meantime, consumer groups hope the comptroller's review will confirm their assertions that the commission protects builders more than homeowners. They also hope it isn't held up by a request Rep. David Swinford, R-Dumas, made for an opinion by the state attorney general on whether the comptroller's office has overstepped its authority in conducting the review.
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