The hopelessly flawed Texas Residential Construction Commission (TRCC) has been recommended for abolition by the Texas Sunset Commission staff. The Sunset staff report on the TRCC concludes, “Current regulation of the residential construction industry is fundamentally ﬂawed and does more harm than good.”
I reluctantly concur.
The TRCC was pushed into being in 2003 by some in the Texas home building industry who wanted to block efforts by homeowners from taking builders to court over shoddy building practices. Essentially all the TRCC does is require consumers to submit to a long and drawn out review, inspection and mediation process designed to discourage them from taking a home builder to court to enforce their contract.
Currently, the average time to process State Inspection requests, including the appeal process is 147 day although, outstanding cases have been open for as long as 20 months.
The Sunset Commission staff noted that a mere 12 percent of the cases the state reviewed of alleged defects produced a “satisfactory offer or repair or compensation over the life of the program.” The other 88 percent of the cases ended up in court anyway, after the considerable delay of on average one half year imposed by the TRCC’s ineffective process.
It is outrageous to put homeowners living with serious problems through these extra steps an slow them down before they can even begin the lengthy legal process to get the problems addressed.
The Texas Sunset Commission staff reported…
The Texas Residential Construction Commission was never meant to be a true regulatory agency with a clear mission of protecting the public. It has elements of a regulatory agency in its registration of home builders, but this program is not designed to ensure that only qualified persons can enter the ﬁeld – the way true regulatory agencies work – and so does not work to prevent problems from occurring.
The problem with the TRCC is not so much in implementation but in the design of the regulatory process by the Texas Legislature. As an advocate for low-income home owners I would like to be able to support a program in which the state helps people resolve problems with their builder without having to incur the cost of going to court. But the TRCC has not produced results.
The program is little more than a mandatory arbitration program that prevents consumers from pursuing their legal rights in court, coupled with a largely meaningless registration program for home builders. The Sunset staff report notes…
As a registration program, the regulation of builders does not require them to satisfy basic capability – as is typical for other trades in the residential construction industry, such as electricians and plumbers – or criteria for ﬁnancial soundness. By not ensuring the competence and ﬁnancial responsibility of builders in Texas, the regulations do not prevent unqualified persons from entering the ﬁeld and thus are not designed to prevent problems from occurring.
In testimony presented to a Senate Committee earlier this year we were critical of the newly minted authority the TRCC has to enforce building codes in rural counties where building codes do not now exist. It is not a question of whether such codes should exist, but how they can be effectively enforced. For a number of years we have supported the thus far unsuccessful efforts by Senator Eddie Lucio to grant counties voluntary ordnance making authority and the power to adopt and enforce building standards.
The Legislature unwisely gave the TRCC the authority to establish a County Inspections Program that will be effective next month. The Sunset Commission staff raises the same objections to this program that we have voiced.
For example, the agency does not have the resources to actively audit construction projects in unincorporated areas to ensure these projects are inspected. Also, the program will require builders to hire inspectors directly, without agency oversight of this process or assurance that builders and inspectors do not have a relationship that poses a threat to the quality of inspections performed. This program, although also well-intentioned, has the potential to provide false security to those purchasing homes or completing remodeling projects in rural areas lacking building code oversight.
The right way to provide security to home buyers in these parts of Texas is to allow for local regulation and government inspection of home builder compliance with building standards. The same process that has served urban resident’s well for many years.
The Texas Residential Construction Commission must be reauthorized by the Legislature next year as part of the state’s sunset review process. Otherwise the TRCC will be abolished. That is what should happen.