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Angry homeowners contend that state agency, complaint process are tilted toward builders"
There are so many problems with the legislation that passed in 2003 it would take us hours to enumerate them," said Alex Winslow, executive director of Texas Watch, an Austin-based consumer-advocacy group. "We need real protections for homeowners so that when they buy a home they know that what they are getting is built to high-quality standards and if it's not, the builder will be held responsible for it." ...State Rep. Todd Smith, R-Euless, asked the state comptroller's office to look into the agency's effectiveness last year. He said a lot of homeowners have wasted their time and money going through the agency. With the TRCC, consumers face a bureaucratic maze to find their way through before they have an opportunity to hold their builder accountable," Winslow of Texas Watch said. Janet Ahmad of San Antonio, president of Homeowners for Better Building, said the TAB devised the TRCC to create "an ironclad, surefire method of seeing to it that the homeowner was regulated. There was never an incentive for a builder to build the house right the first time."
Star-Telegram
Cracked system
Angry homeowners contend that state agency, complaint process are tilted toward builders
By ANDREA JARES
STAR-TELEGRAM STAFF WRITER
SPECIAL TO THE STAR-TELEGRAM/BRIAN LAWDERMILK
Brent Ipock has had many problems with his South Arlington house, such as a leaking roof, soil erosion, foundation trouble and a broken window that he said was the result of shoddy workmanship.
After the Schwomeyers and their neighbors the Davidsons started noticing cracks slicing through the brickwork, floor and drywall of their new homes in North Richland Hills, they asked for help from a state agency designed to handle conflicts between homeowners and home builders.
The Davidsons, whose kitchen has flooded three times, were pleased with the thoroughness of the inspection from the Texas Residential Construction Commission, which cited wall strength and foundation issues as the source of the cracks. But Jason Schwomeyer was not happy when his inspector said his house's cracks -- one in the bedroom is several feet long -- are cosmetic.
"It was a complete joke," said Schwomeyer, who noticed the cracks in the bedroom and broken tile in the hall of his $279,000 home months after moving in. "He said having cracks is part of living in Texas."
But in the end, neither family was happy with the TRCC.
Neither the Schwomeyers nor the Davidsons had any choice but to take their complaints to the TRCC, whose creation was touted as a way to reduce lawsuits and clamp down on construction defects. The law creating the commission requires home buyers to use the agency's complaint process before they can sue their builders; the home buyers also have to pay at least $350 for the inspections, although they can get their money back if the inspector confirms their complaints.
Consumer groups say the agency limits home builders' liability while creating the impression that they are regulated. They especially don't like the fact that the TRCC cannot require builders to make changes, even when its inspectors find significant problems. Interviews with 25 Tarrant County homeowners who have dealt with the TRCC found only three who were satisfied with the experience.
Agency officials and builders groups such as the Texas Association of Builders say the agency has made important concessions to consumers, such as warranties, which weren't explicit before. They say that it's still too early to judge an agency that is less than three years old.
"Prior to 2003 and this bill taking effect, I could have built you a house, and I was not required by law to give you any written warranty," said Scott Norman, the Texas Association of Builders' vice president of government affairs and general counsel. Now, he said, every builder must guarantee workmanship for a year, major systems for two years and the structure and foundation for 10 years.
"That is a huge pro-consumer change," Norman said.
But consumer groups say that the playing field is heavily tilted in favor of builders. They're pressing for changes when the Legislature convenes next year.
"There are so many problems with the legislation that passed in 2003 it would take us hours to enumerate them," said Alex Winslow, executive director of Texas Watch, an Austin-based consumer-advocacy group. "We need real protections for homeowners so that when they buy a home they know that what they are getting is built to high-quality standards and if it's not, the builder will be held responsible for it."
140,000 homes a year
The industry churns out more than 140,000 residences a year across the state, according to the Texas Association of Builders. The group says that about 700 of them -- less than half of 1 percent -- result in a dispute between the builder and homeowner.
Even with such a low complaint rate, the TAB strongly supported the legislation that created the TRCC, which was touted as a way to prevent lawsuits. But the agency didn't keep the Schwomeyers or the Davidsons out of court. The Davidsons, whose TRCC inspection confirmed their problems, sued their builder. So did the Schwomeyers, whose report said there was nothing unusual about the cracks in their home's walls.
"He got a great write-up, and I got an awful one," said Jason Schwomeyer, who moved into his house two years ago. "But it doesn't make a difference."
"Neither one of them carry a bit of weight," said Rob Davidson, who has recently started noticing cracks running through the stained concrete floors of his $327,000 home.
No teeth
The Davidsons and Schwomeyers aren't alone in their frustration. The TRCC asked for comments from homeowners who went through the agency to get their construction problems resolved, and most of the comments reflect frustration with a process that left them back where they started. The most common complaint, reflected on almost a third of the comments, is that the agency can't force the builder to fix the problem even when the agency's inspector confirms there is one.
More than 100 Tarrant County residents have filed TRCC complaints since the agency's inception, and most of the 25 who were interviewed by the Star-Telegram said they were angry that the TRCC couldn't help them. Only three said they found the TRCC helpful. Even though the agency was designed and touted as a way to handle disputes without filing lawsuits, eight of the 25 homeowners, including the Schwomeyers and the Davidsons, have hired lawyers.
State Rep. Todd Smith, R-Euless, asked the state comptroller's office to look into the agency's effectiveness last year. He said a lot of homeowners have wasted their time and money going through the agency.
"The justification for the agency was that we were going to help builders and consumers resolve conflict short of litigation," Smith said. "I do believe we can structure an agency that will accomplish that objective, but the agency in its present function doesn't appear to be doing that."
In a letter accompanying the report her agency completed at Smith's request, Comptroller Carole Keeton Strayhorn said that "it is clear that the agency functions as a builder-protection agency."
Turning builders in
The state building association's Norman said he objects to complaints that the TRCC protects builders.
"I would very much have an issue with the statement that [the TRCC] doesn't hold [builders] accountable," he said. "In fact, what we're seeing is innumerable times [that] builders are going through efforts to make sure that these things never get to the agency."
Duane Waddill, the TRCC's executive director, said the agency has been turning in builders who fail to register or follow through on fixing construction defects and aggressively "enforcing the statute to the degree I can."
In recent months, he said, the agency has also been stepping up those efforts, turning in people to the attorney general's office or the State Office of Administrative Hearings. Waddill said he has referred four builders to the attorney general in the past month for action about failure to register with the TRCC. In fiscal year 2005, the agency referred seven such cases to the attorney general, according to a written response by TRCC staff to an inquiry from the comptroller's office.
State Rep. Allan Ritter, D-Nederland, who sponsored the bill that created the TRCC in 2003, said the idea was to have statewide building standards and oversight. He said he is considering legislation to give the TRCC "enough teeth to get some bad builders out" but also believes that the agency needs a few more years to mature.
Limits to coverage
The TRCC is limited by law to dealing with construction defects after a house is built. Those limits exclude a large number of homeowners who have problems with their contractors. The TRCC doesn't deal with problems that arise before a house is finished.
So it couldn't help Valarie Jolly, who said the remodeler of her Mabank home left without completing the work. She took out a home-equity loan to hire another contractor and get the work finished so she could move back in.
She is perplexed as to why, as the owner of a travel agency, she must be licensed and bonded, but her builder does not have to be.
Quincy Hall of Arlington couldn't get any help from the TRCC, either. He said his builder took $1,400 in deposit money but didn't build the shingled patio he was hired to do. The TRCC said it couldn't get involved because the project was worth less than $20,000 and affected only the outside of the house.
Hall said the police told him his case is a civil matter because the builder actually did something, even if it was only pulling a building permit. So his only option would be to hire a lawyer to find and sue his contractor, and he doesn't think it's worth it.
TRCC files show pages of letters from homeowners asking the agency for help with a multitude of problems. The agency offers to send a letter to the builder to gather more information and sometimes invites the homeowner to fill out paperwork to have a third-party inspector look at the alleged defects. But in many instances, the homeowner is told that the problem is not in the agency's jurisdiction. Occasionally, the homeowner is encouraged to call a lawyer or is given the phone number for the State Bar Association.
Who's being helped?
Consumer groups say the law actually prevents the TRCC from helping consumers.
"With the TRCC, consumers face a bureaucratic maze to find their way through before they have an opportunity to hold their builder accountable," Winslow of Texas Watch said.
Janet Ahmad of San Antonio, president of Homeowners for Better Building, said the TAB devised the TRCC to create "an ironclad, surefire method of seeing to it that the homeowner was regulated. There was never an incentive for a builder to build the house right the first time."
Waddill vehemently denies that the TRCC does the TAB's bidding. He points out that in more than 90 percent of dispute-resolution cases, the third-party inspector agrees with the homeowners that there are problems.
But, as consumer groups point out, a TRCC finding of problems does not mean the homeowner will be satisfied or that the builder will have to make changes. An agency database of 193 cases through Oct. 25 shows anecdotal evidence that about 18 cases were resolved to the satisfaction of the builder and the homeowner. Notes on many other cases indicated that the cases were still tied up in legal disputes, the builder couldn't be found or no defects were found.
Norman said the public criticism comes from a "small and vocal group." He said that the law improved protection for consumers and that the registration of complaints lets homeowners research their builders.
"There is a higher level of professionalism and responsiveness that seems to have taken hold in the industry since this act took effect," Norman said.
Keeping records
The TRCC's Web site includes a public-records search feature that discloses whether the builder's state registration is up to date. But the site doesn't list some other information that might interest a prospective buyer, such as job abandonments, complaints and resolutions, criminal histories and financial problems.
The builder for Brent and Juliana Ipock's south Arlington home near Allan Saxe Park, for example, has 10 complaints on file with the Better Business Bureau in the past three years. But the TRCC Web site states only that this builder "failed to timely renew" its TRCC registration.
Brent Ipock said he and his wife have spent $17,000 trying to fix the problems with their house, including a leaking roof and eroding soil. The house also has cracks in the foundation and a broken window that he said resulted from shoddy building practices.
"I'm scared of what it's going to be like in five to 10 years," Brent Ipock said. "They can sell it to someone else if it's such a great home."
The issue of criminal disclosure came up in the Legislature in March 2005, when a bill was introduced that would have clarified that the agency should disclose on its Web site felony charges, and misdemeanors and judgments related to construction defects. The bill did not pass.
Waddill said the commission is improving its complaint database.
Ritter said he wants consumers to have the best information possible.
"If we can help the consumer with getting the bad guys out, that's what we're interested in doing," Ritter said. "How far we can go legally, that's a different question."
Homeowners can also file an open-records request with the TRCC.
Still waiting
The Schwomeyers and the Davidsons still haven't gotten any satisfaction.
Last week, a judge dismissed Schwomeyer's case against his builder, Custom Design Homes of North Richland Hills. The judge said Schwomeyer did not respond to the builder's proposal to remedy the situation.
Schwomeyer said the builder offered to patch the cracks but not to repair the foundation.
"We've made an offer for them to buy the house back, and we can go our separate ways," Schwomeyer said.
The builder for the Davidsons' home, Meikel Boydston of Castle Rock Custom Homes, said he has spent $10,000 on a foundation treatment and repaired cosmetic defects. But now the Davidsons have sued.
Rob Davidson said he'd be happy to get his money back.
"It's not like we're asking for the farm, we just want it bought back," Davidson said. "At this point, I'm pretty ticked. I've got the biggest investment of my life, and I'm afraid it's not going to be worth anything."
FRUSTRATING PROCESS
Homeowners have to go through the TRCC before they can sue the builders of their houses over defects, and most who've gone through it say the system doesn't work right.
Cracks in the walls
Jason Schwomeyer's house in North Richland Hills has cracks in the walls that he noticed just a few months after moving in two years ago. He says an inspector told him that's just part of homeowning in Texas.
Shifting foundation
Shifting in the foundation of Rob Davidson's home in North Richland Hills has resulted in separation in the backyard patio. He says he has also started seeing cracks in his concrete floors.
Damaged brickwork
Cracks have appeared in Brent Ipock's foundation in South Arlington. His builder has received many complaints, but Ipock didn't know about them because the state doesn't require that such matters be disclosed.
Texas Residential Construction commissioners
The agency has nine commissioners: four who represent home builders, three who represent the public, one residential construction engineer and one architect or building inspector who works with residential construction. They are appointed by the governor.
Patrick Cordero of Midland: A public member, owner of Strategic Abstract & Title Corp. and founder and president of the Midland Community Development Corp.
Glenda Mariott of College Station: A builder member and former banker. Vice president of Mariott Homes.
Lewis Brown of The Woodlands: An inspector member and Vietnam veteran. Founder of Brown's Inspection Service.
Art Cuevas of Lubbock: A builder member, founder of Art Cuevas Construction. Has served on the state board of plumbing examiners and the National Association of Home Builders.
Kenneth Davis of Fort Worth: An engineer member, vice president in the Fort Worth office of Pate Engineers and former vice president for Hillwood Development Corp.
Paulo Flores of Dallas: A public member, lawyer, arbitrator of construction issues and former associate municipal judge in Dallas.
John Krugh of Houston: A builder member, corporate counsel for Perry Homes. Had a leadership role with the Houston home-builders association.
Scott Porter of Kerrville: A builder member, founder of custom home builder Porter Contracting Co. He had a leadership role in a local home-builders association.
Mickey Redwine of Ben Wheeler: A public member, president of Dynamic Cable Construction Co., which installs underground telecommunications cable
SOURCE: Texas Residential Construction Commission Act; TRCC Web site
http://www.dfw.com/mld/dfw/business/local/14852652.htm
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