2009 Texas Code
PROPERTY CODE
TITLE 16. TEXAS RESIDENTIAL CONSTRUCTION COMMISSION ACT
CHAPTER 426. GENERAL PROVISIONS  

PROPERTY CODE

TITLE 16. TEXAS RESIDENTIAL CONSTRUCTION COMMISSION ACT

SUBTITLE D. STATE-SPONSORED INSPECTION AND DISPUTE RESOLUTION

PROCESS; STATUTORY WARRANTY AND BUILDING AND PERFORMANCE

STANDARDS

CHAPTER 426. GENERAL PROVISIONS

Sec. 426.001. APPLICABILITY OF SUBTITLE. (a) This subtitle

applies to a dispute between a builder and a homeowner if:

(1) the dispute arises out of an alleged construction defect,

other than a claim solely for:

(A) personal injury, survival, or wrongful death; or

(B) damage to goods; and

(2) a request is submitted to the commission not later than the

30th day after the 10th anniversary of:

(A) the date of the initial transfer of title from the builder

to the initial owner of the home or the improvement that is the

subject of the dispute; or

(B) if there is not a closing in which title is transferred, the

date on which the construction of the improvement was

substantially completed.

(b) This subtitle does not apply to a dispute arising out of:

(1) an alleged violation of Section 27.01, Business &

Commerce Code;

(2) a builder's wrongful abandonment of an improvement project

before completion; or

(3) a violation of Chapter 162.

(c) For the purposes of this section, "damage to goods" does not

include damage to a home.

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. 32, eff. September 1, 2007.

Sec. 426.002. CONFLICT WITH CERTAIN OTHER LAW. To the extent of

any conflict between this subtitle and any other law, including

Chapter 27 and the Deceptive Trade Practices-Consumer Protection

Act (Subchapter E, Chapter 17, Business & Commerce Code),

this subtitle prevails.

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

2003.

Sec. 426.003. REGISTRATION OF HOME. (a) A builder shall

register a new home with the commission on or before the 15th day

of the month following the month in which the transfer of title

from the builder to the homeowner occurs. The registration must

include the information required by the commission by rule and be

accompanied by the fee required by Subsection (c).

(b) A builder who enters a transaction governed by this title,

other than the transfer of title of a new home from the builder

to the seller, shall register the home involved in the

transaction with the commission. The registration must:

(1) include the information required by the commission by rule;

(2) be accompanied by the fee required by Subsection (c); and

(3) be delivered to the commission not later than the 15th day

after the earlier of:

(A) the date of the substantial completion of the home or other

residential construction project;

(B) the date the new home is occupied; or

(C) the date of issuance of a certificate of occupancy or a

certificate of completion.

(c) A builder must remit to the commission a registration fee

for each home registered with the commission in an amount

determined by the commission. The fee set by the commission under

this subsection may not exceed $125.

(d) The commission may assess a late payment penalty that does

not exceed $500 against a builder who fails to pay a required

registration fee in the time prescribed by this section.

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. 31, eff. September 1, 2007.

Sec. 426.004. FEES. (a) A party who submits a request under

this subtitle shall pay any amount required by the commission to

cover the expense of the third-party inspector.

(b) The commission shall adopt rules permitting a waiver or

reduction of the inspection expenses for homeowners demonstrating

a financial inability to pay the expenses.

(c) If the transfer of the title of the home from the builder to

the initial homeowner occurred before January 1, 2004, or if the

contract for improvements or additions between the builder and

homeowner was entered into before January 1, 2004, the commission

shall register the home and the builder shall pay the

registration fee required by Section 426.003.

(d) The commission may reimburse an inspector for travel

expenses incurred to complete an inspection regardless of whether

the expenses exceed the amount collected under this section.

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. 33, eff. September 1, 2007.

Sec. 426.005. PREREQUISITE TO ACTION. (a) A homeowner or

builder must comply with this subtitle before initiating an

action for damages or other relief arising from an alleged

construction defect.

(b) An action described by Subsection (a) must be filed:

(1) on or before the expiration of any applicable statute of

limitations or by the 45th day after the date the third-party

inspector issues the inspector's recommendation, whichever is

later; or

(2) if the recommendation is appealed, on or before the

expiration of any applicable statute of limitations or by the

45th day after the date the commission issues its ruling on the

appeal, whichever is later.

(c) Any claim for personal injuries, damages to personal goods,

or consequential damages or other relief arising out of an

alleged construction defect must be included in any action

concerning the construction defect.

(d) This section does not apply to an action that is initiated

by a person subrogated to the rights of a claimant if payment was

made pursuant to a claim made under an insurance policy.

(f) A homeowner is not required to comply with this subtitle if:

(1) at the time a homeowner and a builder enter into a contract

covered by this title the builder was not registered; or

(2) the certificate of registration of the builder has been

revoked.

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. 34, eff. September 1, 2007.

Sec. 426.006. TIME FOR REQUESTING INSPECTION AND DISPUTE

RESOLUTION. (a) For an alleged defect discovered during an

applicable warranty period, the state-sponsored inspection and

dispute resolution process must be requested on or before the

second anniversary of the date of discovery of the conditions

claimed to be evidence of the construction defect but not later

than the 90th day after the date the applicable warranty period

expires.

(b) If the alleged defect would violate the statutory warranty

of habitability and was not discoverable by a reasonable, prudent

inspection or examination of the home or improvement within the

applicable warranty period, the state-sponsored inspection and

dispute resolution process must be requested:

(1) on or before the second anniversary of the date of discovery

of the conditions claimed to be evidence of the construction

defect; and

(2) not later than the 10th anniversary of the date of the

initial transfer of title from the builder to the initial owner

of the home or improvement that is the subject of the dispute or,

if there is not a closing, the date on which the contract for

construction of the improvement is entered into.

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. 35, eff. September 1, 2007.

Sec. 426.007. ADMISSIBILITY OF CERTAIN EVIDENCE. A person who

submits a request for state-sponsored inspection and dispute

resolution or responds to a request under Chapter 428 must

disclose in the request or response the name of any expert who,

before the request is submitted, inspected the home on behalf of

the requestor or respondent in connection with the construction

defect alleged in the request or response. If an expert's name

is known to the requestor or respondent at the time of the

request or response and is not disclosed as required by this

section, the requestor or respondent may not designate the person

as an expert or use materials prepared by that person in:

(1) the state-sponsored inspection and dispute resolution

process arising out of the request; or

(2) any action arising out of the construction defect that is

the subject of the request or response.

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. 36, eff. September 1, 2007.

Sec. 426.008. REBUTTABLE PRESUMPTION OF THIRD-PARTY INSPECTOR'S

RECOMMENDATION OR RULING BY PANEL OF STATE INSPECTORS. (a) In

any action involving a construction defect brought after a

recommendation by a third-party inspector or ruling by a panel of

state inspectors on the existence of the construction defect or

its appropriate repair, the recommendation or ruling shall

constitute a rebuttable presumption of the existence or

nonexistence of a construction defect or the reasonable manner of

repair of the construction defect. A party seeking to dispute,

vacate, or overcome that presumption must establish by a

preponderance of the evidence that the recommendation or ruling

is inconsistent with the applicable warranty and building and

performance standards.

(b) The presumption established by this section applies only to

an action between the homeowner and the builder. A recommendation

or ruling under this subtitle is not admissible in an action

between any other parties.

(c) For the purposes of admissibility of a third-party

inspector's recommendation or a ruling by a panel of state

inspectors, the recommendation or ruling shall be considered a

business record under Rule 902, Texas Rules of 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. 37, eff. September 1, 2007.