HOBB ISSUES RESPONSE TO COMPTROLLER'S TRCC REPORT
Friday, 24 March 2006
TRCC is the punishment phase of homeownership in Texas
If TRCC is supposed to be good for homebuyers, it should be optional rather than mandatory. Homeowners would welcome a state service if it was free, voluntary, and effectively enforced...The bottom line is that homeowners innocently began legal action when their only intent was to complain to a state agency about a defective home and the builder who failed to respond. The effect, homeowners learn that complaining to the state about a bad home costs a great deal of money, time, heartaches, and a lawsuit if they complain. In fact, TRCC becomes the punishment phase of homeownership in Texas.
TRCC is the punishment phase of homeownership in Texas Â Is it coming your way next?
HomeOwners for Better Building issued a response to Texas Comptroller's TRCC Report at Capitol Meeting
See copy of my letter to Rep. Smith and a summary page that were presented at a meeting Tuesday at the Texas Capitol with Rep. Todd Smith, staff members from the ComptrollerÂs Office, TRCC, the Texas Association of Builders, and a staff member from Gov. PerryÂs office. See complete letter
March 21, 2006
The Honorable Todd Smith
Texas House of Representatives
Subject: Summary of recommendations
If TRCC is supposed to be good for homebuyers, it should be optional rather than mandatory. Homeowners would welcome a state service if it was free, voluntary, and effectively enforced.
With a substantial amount of changes and years of redesign, TRCC could perhaps become a state agency that would give an incentive for builders to build homes correctly from the beginning. Representative Jessica FarrarÂs HB3404 filed in 2005 could be used as a starting point for making effective change.
However, implementing a common sense approach to prevent defects up front rather than continue to pursue a state bureaucratic dispute resolution process would make more sense.
The following is a short summary of recommendations:
- TRCC should not be mandatory for homeowners.
- The TRCC process must not direct or cause a homeowner to initiate a legal action with specific timelines and statutes of limitations without legal representation.
- Elimination of fees for homeowners to go through SIRP.
- TRCC must have enforcement authority.
- TRCC must have statewide regulatory and enforcement authority over all new home and condo construction, incomplete or complete.
- TRCC must have enforcement authority over statewide International Residential Code (IRC) code enforcement.
- The state-adopted IRC must not be amended to a lesser standard.
- Warranty and performance standards must be revised to assure homebuyer protection.
- Elimination of binding mandatory arbitration.
- Third party warranty companies must be regulated and required to report the number of claims paid, the number of claims denied, and the disposition of all claims to the Texas Department of Insurance (TDI) and be subjected to review and enforcement.
- Prohibit builder warranties from imposing Mandatory Binding Arbitration and other conditions on the homeowner which are not contained in the state approved limited warranty.
- The warranty provider must comply with the findings of TRCCÂs SIRP decisions within 30 days of the issuance of the decision.
- TRCC must be given authority to pursue criminal prosecution of builders who engage in fraudulent activity involving misappropriation of funds, theft of funds and earnest money and crimes of moral turpitude.
- Create a recovery fund or general liability requirement similar to those of other Texas state agencies and other states.
- Require builders to provide proof of financial solvency as a requirement for registration.
- The Star Builder Program should be mandatory for all builders.
In the alternative: Logic dictates that it would be more expedient to use the information collected by the State Comptroller regarding how other states regulate homebuilding and adopt one of those already proven methods of regulation and law enforcement.