CHAPTER 401. GENERAL PROVISIONS

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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.

(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.

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.

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.

State Codes and Statutes

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