Texas Adopts Major Building Industry Reform Package
A new construction standards law in Texas that takes effect next fall will give builders in the state a fast and objective way to resolve construction disputes.

Promoted by the Texas Association of Builders, the new law is one of the broadest industry reform packages in the country.

Bob Garrett, a developer from Tyler, TX, and the association's president, said the bill is good for both consumers and builders. By giving builders the opportunity to fix problems first before home buyers can haul them into court, the law's dispute process “drives the customer and builder together instead of forcing them apart.”

The comprehensive law also establishes the Texas Residential Construction Commission, a nine-member panel appointed by the governor. Setting builder performance standards and registering builders are among its primary responsibilities.

Parties with disputes with home builders will now file claims with the commission instead of in court. If a state-approved inspector determines that the home's construction meets the new standards, then the builder can use that finding to make a settlement offer. Buyers who then opt to sue will have the burden of demonstrating that the inspector's determination was wrong.

Builders are hoping that the new construction dispute resolution process will lower general liability insurance premiums.

According to Douglas Gilliland, a builder from North Richland Hills, TX, and immediate past president of the Texas association, lower claim costs will help make homes more affordable. “This is tort reform that is sorely needed,” he said.

The Texas association proposed the bill after examining virtually all of the successful laws, guidelines and standards in place across the country. Building science experts and industry specialists also helped craft the bill's language.

The grassroots efforts of Texas association members, Garrett said, were key to getting the bill passed, and he believes that because of the initiative his association is “stronger now than it has ever been.”

At the height of the association's advocacy efforts, more than 1,100 builders rallied at the state capitol in Austin.

In addition to straightening out the process for resolving disputes for construction defects, the new law, which takes effect on Sept. 1, 2003,  also:

• Creates the “Texas Star Builder” program, a marketing and certification tool for builders committed to high standards.
• Imposes a nominal house registration fee, which is paid after the closing of each new home, to help fund the program.
• Appoints three task forces for rain harvesting and water recycling, arbitration and mold.
• Permits arbitrators who work on construction defect cases to become certified by the commission.
• Requires arbitration awards filed with the court to also be filed with the Texas Residential Construction Commission.

For more information, e-mail Bob Garrett or Douglas Gilliland or Jay Dyer or Scott Norman at the Texas Association of Builders.

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