2009 Texas Code
PROPERTY CODE
TITLE 16. TEXAS RESIDENTIAL CONSTRUCTION COMMISSION ACT
CHAPTER 418. PROHIBITED PRACTICES; DISCIPLINARY PROCEEDINGS  

PROPERTY CODE

TITLE 16. TEXAS RESIDENTIAL CONSTRUCTION COMMISSION ACT

SUBTITLE C. BUILDER REGISTRATION

CHAPTER 418. PROHIBITED PRACTICES; DISCIPLINARY PROCEEDINGS

Sec. 418.001. GROUNDS FOR DISCIPLINARY ACTION. A person,

including a builder or a person who is designated as a builder's

agent under Section 416.006, or a person who owns or controls a

majority ownership interest in the builder is subject to

disciplinary action under this chapter for:

(1) fraud or deceit in obtaining a registration or certification

under this subtitle;

(2) misappropriation or misapplication of trust funds in the

practice of residential construction, including a violation of

Chapter 32, Penal Code, or Chapter 162, if found by a final

nonappealable court judgment;

(3) naming false consideration in a contract to sell a new home

or in a construction contract;

(4) discriminating on the basis of race, color, religion, sex,

national origin, or ancestry;

(5) publishing a false or misleading advertisement;

(6) failure to honor, within a reasonable time, a check issued

to the commission, or any other instrument of payment, including

a credit or debit card or electronic funds transfer, after the

commission has sent by certified mail a request for payment to

the person's last known business address, according to commission

records;

(7) failure to pay an administrative penalty assessed by the

commission under Chapter 419 or a fee due under Chapter 426;

(8) failure to pay a final nonappealable court judgment arising

from a construction defect or other transaction between the

person and a homeowner;

(9) failure to register a home as required by Section 426.003;

(10) failure to remit the fee for registration of a home under

Section 426.003;

(11) failure to reimburse a homeowner the amount ordered by the

commission as provided by Section 428.004(d);

(12) engaging in statutory or common-law fraud or

misappropriation of funds, as determined by the commission after

a hearing under Section 418.003;

(13) a repeated failure to participate in the state-sponsored

inspection and dispute resolution process if required by this

title;

(14) failure to register as a builder as required under Chapter

416;

(15) using or attempting to use a certificate of registration

that has expired or that has been revoked;

(16) falsely representing that the person holds a certificate of

registration issued under Chapter 416;

(17) acting as a builder using a name other than the name or

names disclosed to the commission;

(18) aiding, abetting, or conspiring with a person who does not

hold a certificate of registration to evade the provisions of

this title or rules adopted under this title, if found by a final

nonappealable court judgment;

(19) allowing the person's certificate of registration to be

used by another person;

(20) acting as an agent, partner, or associate of a person who

does not hold a certificate of registration with the intent to

evade the provisions of this title or rules adopted under this

title;

(21) a failure to reasonably perform on an accepted offer to

repair or a repeated failure to make an offer to repair based on:

(A) the recommendation of a third-party inspector under Section

428.004; or

(B) the final holding of an appeal under Chapter 429;

(22) a repeated failure to respond to a commission request for

information;

(23) a failure to obtain a building permit required by a

political subdivision before constructing a new home or an

improvement to an existing home;

(24) abandoning, without justification, any home improvement

contract or new home construction project engaged in or

undertaken by the person, if found to have done so by a final,

nonappealable court judgment;

(25) a repeated failure to comply with the requirements of

Subtitle F; or

(26) otherwise violating this title or a commission rule adopted

under this title.

Added by Acts 2003, 78th Leg., ch. 458, Sec. 1.01, eff. Sept. 1,

2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

843, Sec. 25, eff. September 1, 2007.

Sec. 418.002. DISCIPLINARY POWERS OF COMMISSION. (a) On a

determination that a ground for disciplinary action under Section

418.001 exists, the commission may:

(1) revoke or suspend a registration or certification in the

event of repeated prior violations that have resulted in

disciplinary action;

(2) probate the suspension of a registration or certification;

(3) formally or informally reprimand a registered or certified

person; or

(4) impose an administrative penalty under Chapter 419.

(b) The commission must consider the factors described by

Section 419.002(b) before taking disciplinary action under this

chapter.

(c) For purposes of Section 418.001(12), the commission may not

conduct a hearing or revoke or suspend a registration or

certification unless the determination of statutory or common-law

fraud or misappropriation of funds has been made in a final

nonappealable judgment by a court.

(d) Prior to imposing disciplinary action under Subsection

(a)(1) based upon grounds that involve a transaction between a

builder and a homeowner, there must be repeated prior violations

that have resulted in disciplinary action that involve the

greater of:

(1) at least three homes registered by the builder under Section

426.003; or

(2) at least one percent of the homes registered by the builder

under Section 426.003 during the preceding 12 months.

(e) When the commission has information that a matter may be

criminal in nature, the commission may refer the matter to a

local district attorney or county attorney for investigation.

Added by Acts 2003, 78th Leg., ch. 458, Sec. 1.01, eff. Sept. 1,

2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

843, Sec. 25, eff. September 1, 2007.

Sec. 418.003. HEARING. (a) If the commission proposes to take

a disciplinary action against a person under Section 418.002, the

person is entitled to a hearing before the commission.

(b) The commission shall adopt procedural rules by which all

decisions to take disciplinary action under this chapter are

subject to appeal to the commission.

(c) The commission shall prescribe the time and place of the

hearing.

(d) A hearing under this section is governed by Chapter 2001,

Government Code.

Added by Acts 2003, 78th Leg., ch. 458, Sec. 1.01, eff. Sept. 1,

2003.

Sec. 418.004. APPEAL. (a) A person aggrieved by a ruling,

order, or decision of the commission is entitled to appeal to a

district court in the county in which the administrative hearing

was held.

(b) An appeal under this section is governed by Chapter 2001,

Government Code.

(c) An appeal to a district court of a final decision of the

commission under this section regarding a revocation or

suspension of a registration or certification is determined by

substantial evidence.

Added by Acts 2003, 78th Leg., ch. 458, Sec. 1.01, eff. Sept. 1,

2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

843, Sec. 26, eff. September 1, 2007.

Sec. 418.005. RESPONSIBILITY FOR ADMINISTRATIVE ACTIONS. (a)

The commission may simultaneously take administrative action

under this chapter against:

(1) a builder; and

(2) a person who owns or controls a majority ownership interest

in the builder.

(b) A builder and a person who owns or controls a majority

ownership interest in the builder are jointly and severally

liable for any amounts due to the commission under this title.

Added by Acts 2007, 80th Leg., R.S., Ch.

843, Sec. 27, eff. September 1, 2007.