CHAPTER 401. GENERAL PROVISIONS
PROPERTY CODE
TITLE 16. TEXAS RESIDENTIAL CONSTRUCTION COMMISSION ACT
SUBTITLE A. GENERAL PROVISIONS
CHAPTER 401. GENERAL PROVISIONS
Sec. 401.001. SHORT TITLE. This title may be cited as the Texas
Residential Construction Commission Act.
Added by Acts 2003, 78th Leg., ch. 458, Sec. 1.01, eff. Sept. 1,
2003.
Sec. 401.002. GENERAL DEFINITIONS. In this title:
(1) "Applicable building and performance standards" means:
(A) building and performance standards adopted under Section
430.001; or
(B) for homes constructed before the adoption of building and
performance standards under Section 430.001, the building and
performance standards under any express warranty provided in
writing by the builder or, if there is no express warranty, the
usual and customary residential construction practices in effect
at the time of the construction.
(2) "Applicable warranty period" means:
(A) a warranty period established under Section 430.001; or
(B) for construction to which the warranty periods adopted under
Section 430.001 do not apply, any other construction warranty
period that applies to the construction.
(3) "Approved architect" means an architect licensed by this
state and approved by the commission to provide services to the
commission in connection with the state-sponsored inspection and
dispute resolution process.
(4) "Approved structural engineer" means a licensed professional
engineer approved by the commission to provide services to the
commission in connection with the state-sponsored inspection and
dispute resolution process.
(5) "Commission" means the Texas Residential Construction
Commission.
(6) "Home" means the real property and improvements and
appurtenances for a single-family house or duplex.
(7) "Homeowner" means a person who owns a home or a subrogee or
assignee of a person who owns a home.
(7-a) "Improvement to the interior of an existing home" means
any modification to the interior living space of a home, which
includes the addition or installation of permanent fixtures
inside the home. An improvement to the interior of an existing
home does not include improvements to an existing home if the
improvements are designed primarily to repair or replace the
home's component parts.
(8) "Limited statutory warranty and building and performance
standards" means the limited statutory warranty and building and
performance standards adopted by the commission under Section
430.001.
(8-a) "Material improvement" means a modification to an existing
home that either increases or decreases the home's total square
footage of living space that also modifies the home's foundation,
perimeter walls, or roof. A material improvement does not
include modifications to an existing home if the modifications
are designed primarily to repair or replace the home's component
parts.
(9) "Nonstructural matter" has the meaning assigned by the
limited statutory warranty and building and performance standards
adopted by the commission under Section 430.001.
(10) "Request" means a request submitted under Section 428.001.
(11) "State inspector" means a person employed by the commission
under Section 427.002.
(12) "State-sponsored inspection and dispute resolution process"
means the process by which the commission resolves a request.
(13) "Structural" means the load-bearing portion of a home.
(14) "Structural failure" has the meaning assigned by the
limited statutory warranty and building and performance standards
adopted by the commission under Section 430.001.
(15) "Third-party inspector" means a person appointed by the
commission under Section 428.003.
(16) "Warranty of habitability" means a builder's obligation to
construct a home or home improvement that is in compliance with
the limited statutory warranties and building and performance
standards adopted by the commission under Section 430.001 and
that is safe, sanitary, and fit for humans to inhabit.
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. 6, eff. September 1, 2007.
Sec. 401.003. DEFINITION OF BUILDER. (a) In this title,
"builder" means any person who, for a fixed price, commission,
fee, wage, or other compensation, sells, constructs, or
supervises or manages the construction of, or contracts for the
construction of or the supervision or management of the
construction of:
(1) a new home;
(2) a material improvement to a home, other than an improvement
solely to replace or repair a roof of an existing home; or
(3) an improvement to the interior of an existing home when the
cost of the work exceeds $10,000.
(b) The term includes:
(1) an owner, officer, director, shareholder, partner,
affiliate, subsidiary, or employee of the builder;
(2) a risk retention group governed by Article 21.54, Insurance
Code, that insures all or any part of a builder's liability for
the cost to repair a residential construction defect; and
(3) a third-party warranty company and its administrator.
(c) The term does not include any person who:
(1) has been issued a license by this state or an agency of this
state to practice a trade or profession related to or affiliated
with residential construction if the work being done by the
entity or individual to the home is solely for the purpose for
which the license was issued; or
(2) sells a new home and:
(A) does not construct or supervise or manage the construction
of the home; and
(B) holds a license issued under Chapter 1101, Occupations Code,
or is exempt from that chapter under Section 1101.005,
Occupations Code.
(d) The term does not include a nonprofit business entity that
is exempt from taxation under Section 501(c)(3), Internal Revenue
Code, if:
(1) the construction or supervision or management of the
construction of the home, material improvement, or improvement
sold by the nonprofit business entity is performed by a builder
registered under this title;
(2) the builder contractually agrees to comply with the
provisions of this title;
(3) the builder is contractually liable to the homeowner for the
warranties and building and performance standards of this title;
and
(4) the nonprofit business entity does not participate directly
in the construction of the home, material improvement, or
improvement.
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. 7, eff. September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch.
1082, Sec. 1, eff. September 1, 2007.
Sec. 401.004. DEFINITION OF CONSTRUCTION DEFECT. (a) In this
title, "construction defect" means:
(1) the failure of the design, construction, or repair of a
home, an alteration of or a repair, addition, or improvement to
an existing home, or an appurtenance to a home to meet the
applicable warranty and building and performance standards during
the applicable warranty period; and
(2) any physical damage to the home, an appurtenance to the
home, or real property on which the home or appurtenance is
affixed that is proximately caused by that failure.
(b) The term does not include a defect that arises or any
damages that arise wholly or partly from:
(1) the negligence of a person other than the builder or an
agent, employee, subcontractor, or supplier of the builder;
(2) failure of a person other than the builder or an agent,
employee, subcontractor, or supplier of the builder to:
(A) take reasonable action to mitigate any damages that arise
from a defect; or
(B) take reasonable action to maintain the home;
(3) normal wear, tear, or deterioration; or
(4) normal shrinkage due to drying or settlement of construction
components within the tolerance of building and performance
standards.
Added by Acts 2003, 78th Leg., ch. 458, Sec. 1.01, eff. Sept. 1,
2003.
Sec. 401.005. EXEMPTIONS. (a) This title does not apply to a
home that is:
(1) built by the individual who owns the home, alone or with the
assistance of the individual's employees or independent
contractors; and
(2) used by the individual as the individual's primary residence
for at least one year after the completion or substantial
completion of construction of the home.
(b) This title does not apply to a homeowner or to a homeowner's
real estate broker, agent, interior designer registered under
Chapter 1053, Occupations Code, interior decorator, or property
manager who supervises or arranges for the construction of an
improvement to a home owned by the homeowner.
(c) An individual who builds a home or a material improvement to
a home and sells the home immediately following completion of the
building or remodeling and does not live in the home for at least
one year following completion of the building or remodeling is
responsible as a builder under the warranty obligation created by
this title for work completed by the individual. Responsibility
under this subsection does not automatically require an
individual to register under Section 416.001.
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. 8, eff. September 1, 2007.
Sec. 401.006. SUNSET PROVISION. The Texas Residential
Construction Commission is subject to Chapter 325, Government
Code (Texas Sunset Act). Unless continued in existence as
provided by that chapter, the commission is abolished and this
title expires September 1, 2009.
Added by Acts 2003, 78th Leg., ch. 458, Sec. 1.01, eff. Sept. 1,
2003.
Sec. 401.007. INJUNCTION; APPEAL. (a) If the commission has
reasonable cause to believe that a person is violating a statute
to which this chapter applies, the commission, in addition to any
other authorized action, may issue an order to cease and desist
from the violation or an order to take affirmative action, or
both, to enforce compliance. A person may appeal the order
directly to district court in accordance with Chapter 2001,
Government Code.
(b) Before issuing an order under this section, the commission
shall set and give notice of a hearing before a hearings officer.
The hearing is governed by Chapter 2001, Government Code. Based
on the findings of fact, conclusions of law, and recommendations
of the hearings officer, the commission by order may find whether
a violation has occurred.
(c) The commission, after providing notice and an opportunity to
appear for a hearing, may impose against a person who violates a
cease and desist order an administrative penalty in an amount not
to exceed $1,000 for each day of violation. In addition to any
other remedy provided by law, the attorney general or the
commission may institute in district court a suit for injunctive
relief and to collect an administrative penalty. A bond is not
required of the commission with respect to injunctive relief
granted under this section. In the action, the court may enter
as proper an order awarding a preliminary or final injunction.
(d) A suit by the attorney general under this section must be
brought in Travis County.
(e) The attorney general and the commission may recover
reasonable expenses incurred in obtaining injunctive relief under
this section, including court costs, reasonable attorney's fees,
investigative costs, witness fees, and deposition costs.
(f) If a party seeks review of the order by the commission, the
party shall file a petition initiating judicial review not later
than the 30th day after the date of the issuance of the decision.
Added by Acts 2007, 80th Leg., R.S., Ch.
843, Sec. 9, eff. September 1, 2007.