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ABC Special Report
Investigation: New Home Heartbreak
Trump - NAHB Homebuilders Shoddy Construction and Forced Arbitration
Houston HOBB Spokesperson Cohn says TRCC has little power
Saturday, 24 February 2007

ABC 13 Houston Reports - One bill would remove binding arbitration clauses from new home contracts
When Cohn learned about the problems she says she called her builder, but the builder would not fix the house. Cohn then learned she could take her case before the Texas Residential Construction Commission, but discovered the TRCC had little power to force the builder to make repairs. "TRCC from what I experienced and have heard so far is their hands are really tied," Cohn lamented. But that may change soon. The state legislature is considering several bills that would strengthen the TRCC. One bill would remove binding arbitration clauses from new home contracts and create a fund to pay homeowners for claims when builders can't. The TRCC would recoup the money from a builder's insurer.

Texas homeowners could get more help with builder problems

ABC 13 Houston Reports
Consumer could get more help with building homes

KTRK By Jeff Ehling

- New homebuyers may be getting more protection from the state legislature.

Lawmakers are proposing changes to the agency that oversees home builders in Texas.

In the past, the Texas Residential Construction Commission has been criticized for siding with builders and not helping home buyers - but that may change.

Mary Cohn says her family spent $700,000 on their new Bellaire home and then they needed another $500,000 to fix it.

"There was water inside the walls and I could not figure out what was going on," said Cohn.

Cohn says an inspector discovered serious problems with the homes roof and the leaking water started rotting the walls behind her homes stucco facade.

"All the water was coming in and going into the walls," she said.

When Cohn learned about the problems she says she called her builder, but the builder would not fix the house. Cohn then learned she could take her case before the Texas Residential Construction Commission, but discovered the TRCC had little power to force the builder to make repairs.

"TRCC from what I experienced and have heard so far is their hands are really tied," Cohn lamented.

But that may change soon. The state legislature is considering several bills that would strengthen the TRCC. One bill would remove binding arbitration clauses from new home contracts and create a fund to pay homeowners for claims when builders can't. The TRCC would recoup the money from a builder's insurer. A different bill would not go quite as far, but would give the TRCC power to take action against builders who have TRCC code violations. Builders are closely watching the proposed laws and fully expect the TRCC to have expanded powers soon.

"We do expect there to be changes this year, the agency has been in place since 2003 and it has had time to work out it's kinks," said Adam Aschmann of the Greater Houston Builders Association.

Aschmann says builder groups oppose laws that would eliminate mandatory arbitration in contracts but recognizes the TRCC will likely be more consumer friendly after this legislative session.

"We do expect some consumer protections to be put in place and the agency to have more teeth," he said.

It's too early to tell which proposals will become law but homebuyers and home builders are waiting to see just how far the legislature is willing to go to strengthen the TRCC and both groups are lobbying for their own causes.

So if you are thinking about building a new home, should you wait to see what happens with the legislature? It depends on how soon the home is being built. Remember it could be several months before any of this becomes law, if ever. But if you are building a home a year from now, keep a close eye on the legislation it could have a big impact on your rights.

>>Click here to send Jeff a consumer news tip
>>Read Jeff's Consumer Blog
>>Talk on the Consumer Message Board

(Copyright © 2007, KTRK-TV)

Jeff Ehling

ABC13 News Team

Jeff Ehling, Action 13

 
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