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Homeowners Deserve Better Protection

Last August, I received a legislative request to research, analyze and report on the impact of the Texas Residential Construction Commission (TRCC) on Texas homeowners and the economy. My research found no evidence that TRCC has had a favorable impact on the homeowner.

In a homeowner survey conducted by my office, I found that 86 percent of homeowners who responded said their builder failed to fix construction defects in their homes--and that was after going through the mandated State Sponsored Inspection and Dispute Resolution process that verified the defects.

While the mission of the agency is to "resolve differences through a neutral dispute resolution process," there is no dispute resolution. The agency merely issues a report that either confirms or denies home construction defects. After the report is issued, the agency has absolutely no enforcement power to make the builders fix defects.

Homeowners are disappointed and angry that the Texas Residential Construction Commission's costly and bureaucratic process does not get their construction defects fixed. Their only recourse is to go to binding arbitration, as required by most builder contracts, or go to court--precisely the outcome the agency was created to prevent.

Homebuilders play a critical and prominent role in our economy. Most are ethical business people who want to give people the home of their dreams.

But it isn't the role of government to throw up bureaucratic barriers to protect unethical or inept builders from their customers. Caveat emptor--let the buyer beware--is the motto of the unscrupulous. It should not be the hallmark of state policy.

To balance the needs of both the homeowner and the homebuilder, the Texas Residential Construction Commission should at least have statutory authority to make builders fix defects confirmed through its process. At the very least, the agency should not shift builder fees to the homeowner, should not allow public members of the commission to have ties to the construction industry and should enforce builder registration laws.

In fiscal 2005, the agency spent $3.7 million on its operations. That same year, the agency collected $6.6 million from builders and homeowners. As a result, the agency transferred $2.9 million to the general fund, effectively helping balance the general state budget on the backs of homeowners.

In the next two years, the agency is estimated to raise about $9.7 million a year from its fees and spend only $4.2 million a year, meaning that the agency will be putting more money in the general budget than it does into doing its job.

For these reasons, if it were up to me personally, I would blast this TRCC builder-protection agency off the bureaucratic books.

To see the full report, go to www.window.state.tx.us/trcc/.


[signed]
Carole Keeton Strayhorn
Texas Comptroller