Part 1. TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS
Subchapter A. GENERAL POLICIES AND PROCEDURES
The Texas Department of Housing and Community Affairs (the Department) proposes new §1.23, concerning adoption by reference of the 2008 State of Texas Low Income Housing Plan and Annual Report (SLIHP). The purpose of the SLIHP is to serve as a comprehensive reference on statewide housing needs, housing resources, and strategies for funding allocations. The document reviews the Department's programs, current and future policies, resource allocation plan to meet state housing needs, and reports on 2007 performance. The Department is required to submit the SLIHP annually to its Board of Directors in accordance with §2306.072 of the Texas Government Code.
Mr. Michael Gerber, Executive Director, has determined that for the first five-year period the new section is in effect there will be no fiscal implications for state or local governments as a result of enforcing or administering the new section as proposed.
Mr. Gerber has also determined that for each year of the first five years the rule is in effect the public benefit anticipated will be improved communication with the public regarding the Department's programs and activities. There will be no effect on small businesses or persons. There is no anticipated economic cost to persons who are required to comply with the new section as proposed.
The full text of the 2008 SLIHP may be viewed at the Department's website: www.tdhca.state.tx.us. The public may also receive a copy of the 2008 SLIHP by contacting the Department's Housing Resource Center at (512) 475-3976.
The public comment period will be between January 4 and February 6, 2008, and a public hearing will be held on January 8, 2008, at 10:00 a.m. in the Rusk Building, 208 East 10th Street in Austin. Written comments may be submitted to Texas Department of Housing and Community Affairs, Brenda Hull, P.O. Box 13941, Austin, Texas 78711-3941, by e-mail to the following address: brenda.hull@tdhca.state.tx.us, or by fax to (512) 469-9606.
The TDHCA Board of Directors will approve the final 2008 SLIHP at the March 2008 board meeting. The 2008 SLIHP will become effective 20 days after being filed in the Office of the Secretary of State.
The new section is proposed pursuant to the authority of the Texas Government Code, Chapter 2306 which provides the Department with the authority to adopt rules governing the administration of the Department and its programs.
No other statutes, articles, or codes are affected by the proposed new section.
§1.23.State of Texas Low Income Housing Plan and Annual Report (SLIHP).
The Texas Department of Housing and Community Affairs (the Department) adopts by reference the 2008 State of Texas Low Income Housing Plan and Annual Report (SLIHP). The full text of the 2008 SLIHP may be viewed at the Department's website: www.tdhca.state.tx.us. The public may also receive a copy of the 2008 SLIHP by contacting the Department's Housing Resource Center at (512) 475-3976.
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 21, 2007.
TRD-200706576
Michael Gerber
Executive Director
Texas Department of Housing and Community Affairs
Earliest possible date of adoption: February 3, 2008
For further information, please call: (512) 475-3916
The Texas Residential Construction Commission ("commission") proposes new §300.10, concerning definitions used in construing agency rules promulgated to implement the Texas Residential Construction Commission Act ("Act"), Title 16, Property Code. The commission proposes the placement of this section in Chapter 300 of the commission rules rather than in Chapter 301, where the definitions rule currently resides, as a part of the agency's consolidation and review of its rules under Government Code §2001.039.
The commission is proposing these definitions to assist those who use the commission's rules by providing terminology that will enable users to better understand and use the rules adopted.
The newly proposed section includes language that was previously adopted in §301.1 of this title and adds new language to implement new legislation enacted during the 80th Legislative Session, Regular Session, House Bill 1038 (Act effective September 1, 2007, 80th Legislature, Regular Session), which includes changes to Title 16, Property Code.
Susan K. Durso, General Counsel, has determined that for each year of the first five-year period that the new section is in effect there will be no fiscal implications for state or local governments as a result of enforcing or administering the proposed section.
Ms. Durso has also determined that for each year of the first five-year period the proposed section is in effect the public will benefit from having more complete and clearer definitions.
Ms. Durso has also determined that for each year of the first five-year period the proposed section is in effect there will be no significant effect on individuals or large, small, or micro-businesses as a result of the adoption of the new section
Ms. Durso has also determined that for each year of the first five-year period the proposed section is in effect there will be no adverse economic effect on small businesses. Therefore, no regulatory flexibility analysis is necessary.
Interested persons may submit written comments (12 copies) on the proposed section to Susan K. Durso, General Counsel, Texas Residential Construction Commission, P.O. Box 13509, Austin, Texas 78701-3509. The deadline for submission of comments is 30 days from the date of publication of the proposed section in the Texas Register . Comments received after that date will not be considered. Comments should be arranged in the manner consistent with the organization of the new section. Comments may be submitted electronically to comments@trcc.state.tx.us. For comments submitted electronically, please include "Definitions" in the subject line. Comments submitted electronically that are sent to a different address or that do not have "Definitions" in the subject line may not be considered.
The new section is proposed pursuant to Property Code §408.001, which provides general authority for the commission to adopt rules necessary for the implementation of Title 16, Property Code; and Government Code §2001.039, which requires agency's to periodically review their rules for continued necessity.
No other statutes, articles, or codes are affected by the proposed section.
§300.10.Definitions.
The following words and terms, when used in rules promulgated by the commission, shall have the following meanings unless the context of the rule clearly indicates otherwise.
(1) Accrual or accrued--when a homeowner first discovers a condition in the home that indicates there may be a construction defect.
(2) Act--the Texas Residential Construction Commission Act, Title 16, Property Code.
(3) Affiliate--a person who directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with a specified person.
(4) Builder--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:
(A) a new home;
(B) a material improvement to a home, other than an improvement solely to replace or repair a roof of an existing home; or
(C) an improvement to the interior of an existing home when the cost of the work exceeds $10,000.
(D) When the rule context requires, the term includes
(i) an owner, officer, director, shareholder, partner, affiliate, subsidiary, or employee of the builder;
(ii) 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
(iii) a third party warranty company and its administrator.
(E) The term does not include any person who:
(i) 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
(ii) sells a new home and:
(I) does not construct or supervise or manage the construction of the home; and
(II) holds a license issued under Chapter 1101, Occupations Code, or is exempt from that chapter under §1101.005, Occupations Code; or
(iii) 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.
(F) The term does not include a nonprofit business entity that is exempt from taxation under §501(c)(3), Internal Revenue Code, if:
(i) 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;
(ii) the builder contractually agrees to comply with the provisions of this title;
(iii) the builder is contractually liable to the homeowner for the warranties and building and performance standards of this title; and
(iv) the nonprofit business entity does not participate directly in the construction of the home, material improvement, or improvement.
(5) Builder in good standing--a builder or remodeler that has a current active certificate of registration issued by the commission and that has no unpaid fees or administrative penalties due and owing to the commission.
(6) Commencement of construction-when goods, materials, or equipment has been delivered to the job site for use in the construction of a new home, or a material improvement or an interior improvement to an existing home.
(7) Commission--the Texas Residential Construction Commission, including commission staff when performing the functions of their employment in furtherance of the commission's mission and purpose.
(8) Complaint--a written expression of concern about a registered builder or remodeler's registration status, construction practices or business practices. A complaint does not include a request submitted under Property Code §428.001.
(9) Construction Activities--an action taken or a failure to act by the builder/remodeler, or its employees, agents, contractors or subcontractors, during the process of building a home, or a material improvement or an interior improvement to an existing home.
(10) Construction defect--
(A) 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 caused by the action or inaction of the builder, or its employees, agents, contractors or subcontractors; and
(B) 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.
(11) Cosmetic deficiency--any marred, scuffed, scratched or smudged painted surface or countertop; chipped or stained porcelain, tile, grout, or fiberglass; chipped surfaces of appliances or plumbing fixtures; torn or defective window or door screens; marred, smudged, scratched or stained cabinet surfaces or finishes; or, broken, chipped or scratched glass, window or mirror.
(12) Duplex--a single residential structure with two separate dwelling units.
(13) Dwelling unit--a residential structure providing complete independent living facilities for one or more persons, including permanent provisions for living, sleeping, eating, cooking and sanitation.
(14) Executive Director--the individual employed by the commission as the chief executive for the agency or any person to whom the Executive Director has delegated the authority to act on behalf of the Executive Director.
(15) Home--the real property, improvements and appurtenances thereto for a single-family dwelling unit or duplex that is not subject to a condominium regime.
(16) ICC--the International Code Council, Inc., currently located at 5203 Leesburg Pike, Suite 600, Falls Church, Virginia, 22041-3401, or at a subsequent address, and any successor organization that performs substantially the same functions that the ICC performs as of December 1, 2003.
(17) Improvement to the interior of an existing home when the cost of the work exceeds $10,000--any modification to the interior living space of a home, which includes the addition or installation of permanent fixtures inside the home, pursuant to an agreement for work for total consideration in excess of $10,000 to be paid by a homeowner to a single builder or remodeler that involves the coordination of trades or multiple subcontractors or the work involves structural components or the penetration of the home's diaphragm. The definition specifically excludes improvements designed primarily to replace a single component part, such as the replacement of one type of floor covering with another, or to make similar cosmetic changes to interior surfaces, such as replacing laminate countertops with tile.
(18) Living space--the enclosed area in a home that is heated or air-conditioned so that it is suitable for year-round residential use.
(19) Local building official--the agency or department of a municipality, county or other local political subdivision with authority to make inspections and to enforce the laws, ordinances, and regulations applicable to the construction, alteration, or repair of homes in that locality.
(20) Material improvement--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 includes modifications to an existing home that requires the addition of new structural components or the modification of the home's existing structural components, but does not include modifications to an existing home if the modifications are designed primarily to repair or replace the home's component parts.
(21) One or two family residential dwelling--a building that contains one or two dwelling units, including a townhouse, complete with independent living facilities for one or more persons suitable for one household, including permanent provisions for living, sleeping, eating, cooking and sanitation, which is not used as a commercial structure.
(22) Person--an individual, political subdivision, partnership, company, corporation, association, or any other legal entity, however organized.
(23) Remodeler--a person who is a builder under the definition thereof in this section and who enters into an agreement with a homeowner to make material improvements to an existing home or an improvement to the interior of an existing home when the cost of the work exceeds $10,000.
(24) State Inspector--a person employed by the commission whose duties include serving as a member of an appellate panel to:
(A) review the recommendations of third-party inspectors;
(B) provide consultation to third-party inspectors; and
(C) administer the state-sponsored inspection and dispute resolution process through the assignment of third-party inspectors.
(25) Statutory warranty--the legal requirement that the component parts of a home perform to the building and performance standards applicable to the construction for the minimum number of years required pursuant to rules adopted by the commission, to wit:
(A) one year for workmanship and materials;
(B) two years for plumbing, electrical, heating, and air conditioning delivery systems;
(C) ten years for major structural components of the home; and
(D) ten years for the warranty of habitability.
(26) Structural failure--for purposes of Property Code §429.001(b) only, the term means non-compliance with the commission-adopted performance standards for major structural components, if applicable to the construction. For purposes of Property Code §429.001(b), if the commission-adopted performance standards do not apply, the term means non-compliance with any applicable written performance standard agreed to between the parties for structural components of a home, or if there are no written performance standards, the term means non-compliance with the usual and customary standards for construction of a structural component of the home such that the structural integrity of the home is compromised or the integrity and performance of the affected structural system is compromised.
(27) Substantial Completion--the later of:
(A) the stage of construction when a new home, addition, improvement, or alteration to an existing home is sufficiently complete that the home, addition, improvement or alteration can be occupied or used for its intended purpose; or
(B) if required, the issuance of a final certificate of inspection or occupancy by the applicable governmental authority.
(28) Third-party inspector--a person approved by the commission to conduct an objective home inspection and prepare a report of that inspection as part of the state-sponsored inspection and dispute resolution process.
(29) Townhouse--a single-family dwelling unit constructed in a group of three or more attached dwelling units in which each unit extends from foundation to roof and with open space on at least two sides not more than three stories in height with a separate means of ingress and egress, that is not subject to a condominium regime.
(30) Transaction governed by the Act--an agreement between a homeowner and a builder:
(A) for the construction of a new home; or
(B) for construction on an existing home that is:
(i) a material improvement to the home other than an improvement solely to replace or repair the roof; or
(ii) an improvement to the interior of the home when the cost paid for the work exceeds $10,000.
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 17, 2007.
TRD-200706409
Susan K. Durso
General Counsel
Texas Residential Construction Commission
Earliest possible date of adoption: February 3, 2008
For further information, please call: (512) 463-2886
(Editor's note: The text of the following section proposed for repeal will not be published. The section may be examined in the offices of the Texas Residential Construction Commission or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)
The Texas Residential Construction Commission ("commission") republishes its proposal to repeal 10 TAC §301.1, concerning definitions used in construing agency rules promulgated to implement the Texas Residential Construction Commission Act ("Act"), Title 16, Property Code. The repeal is proposed pursuant to an overall scheme to consolidate agency administrative rules into a single chapter under the agency’s rule review plan. The agency is currently reviewing its rules pursuant to the requirements of Government Code §2001.39. The definitions currently contained in 10 TAC §301.1 will be proposed for adoption with any necessary amendments to the text resulting from recent legislation simultaneously in this issue of the Texas Register . The proposed repeal was previously published in the June 29, 2007 issue of the Texas Register (32 TexReg 3927). No comments have been received on the proposal as previously published.
Ms. Susan Durso, General Counsel for the commission, has determined that for each year of the first five-year period that the proposed repeal is in effect there will be no increase in expenditures or revenue for state government and no fiscal impact for local government as a result of enforcing or administering the section.
Ms. Durso has also determined that for the first five years the proposed repeal is in effect the public will benefit from the overall rule reorganization that will place all of the agency administrative rules in the same chapter. There will not be an effect on individuals, or large, small or micro businesses. There is no anticipated economic cost to persons who are required to comply with the proposed repeal.
Ms. Durso has also determined that for each year of the first five-year period the proposed repeal is in effect there should be no effect on a local economy; therefore, no local employment impact statement is required under the Administrative Procedure Act, §2001.022.
Ms. Durso has also determined that the repeal of this section will not have any adverse economic impact on small businesses; therefore, no regulatory flexibility analysis is necessary.
Comments on the proposed repeal may be submitted to Susan K. Durso, General Counsel, Texas Residential Construction Commission, 311 E. 14th Street, Ste. 200, Austin, Texas 78701 or by fax to (512) 475-2453. Comments may also be submitted electronically to comments@trcc.state.tx.us. For comments submitted electronically, please include "301.1 repeal" in the subject line. The deadline for submission of comments is fourteen (14) days from the date of publication of the proposed rules in the Texas Register. Comments should be organized in a manner consistent with the organization of the section under consideration. Comments not timely received or that are submitted electronically but do not have "301.1 repeal" in the subject line may not be considered.
The repeal is proposed pursuant to Property Code §408.001, which provides general authority for the commission to adopt rules necessary for the implementation of Title 16, Property Code and Government Code §2001.30, which requires state agencies to periodically review their rules to determine whether there is a continued need for their existence.
No other statutes, articles, or codes are affected by the proposal.
§301.1.Definitions.
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 18, 2007.
TRD-200706429
Susan K. Durso
General Counsel
Texas Residential Construction Commission
Earliest possible date of adoption: February 3, 2008
For further information, please call: (512) 463-2886
Subchapter C. REGISTRATION OF THIRD-PARTY INSPECTORS
The Texas Residential Construction Commission proposes new 10 Texas Administrative Code §303.212, Third-party Inspector Civil Liability. The new rule is needed to implement a new provision, Property Code §427.003, which was added to the Act by the 80th Texas Legislature in House Bill 1038. The change reduces the impact of liability and the cost of personal liability insurance, which third-party inspectors may purchase to protect themselves regarding work performed in their professional capacity. The new statute states that third-party inspectors and state inspectors will be afforded protection from liability for damages in civil actions for acts or omissions in the scope of duties as an inspector in the state-sponsored inspection process. Third-party inspectors do not enjoy protection from liability from damages if the inspector acts with wanton and willful disregard for the rights, safety, or property of another. Similarly, the third-party inspectors do not enjoy protection from liability from damages resulting from an intentional act of misconduct or gross negligence. Proposed new §303.212 implements this statutory change.
Proposed new §303.212 also requires that a third-party inspector who is sued directly, i.e., who is named individually as a defendant in a civil action, notify the commission in writing within ten days of being served. The proposed new subsection will allow the commission an opportunity to track how often the third-party inspectors are sued in civil lawsuits in the course of performing their duties on behalf of the commission. This information may aid the commission's determination whether a third-party inspector should be assigned responsibility for inspections to be performed pursuant to the State-sponsored Inspection and Dispute Resolution Process (SIRP), or whether the assignment of SIRP inspections to an inspector should be deferred while the lawsuit or proceeding is pending.
Susan K. Durso, General Counsel, has determined that for each year of the first five-year period that the new section is in effect there will be no fiscal implications for state or local governments as a result of enforcing or administering the proposed section.
Ms. Durso has also determined that for each year of the first five-year period the proposed section is in effect the public and the industry will benefit from the commission knowing whether a third-party inspector may be involved in or subject to potential liability arising from a pending lawsuit.
Ms. Durso has also determined that for each year of the first five-year period the proposed section is in effect there will be no negative effect on individuals or large, small, and micro-businesses as a result of the express protection afforded to third-party inspectors under the new rule.
Ms. Durso has also determined that for each year of the first five-year period the proposed section is in effect there should be no effect on a local economy; therefore, no local employment impact statement is required under Administrative Procedure Act §2001.022.
Ms. Durso has also determined that for each year of the first five year period the proposed section is in effect there will be no adverse economic effect on small businesses. Therefore, no regulatory flexibility analysis is necessary.
Interested persons may submit written comments on the proposed new rule to Susan K. Durso, General Counsel, Texas Residential Construction Commission, P.O. Box 13509, Austin, Texas, 78711. Comments may be submitted electronically to comments@trcc.state.tx.us. For comments submitted electronically, please include "inspector civil liability" with the rule number in the subject line. Comments should be organized in a manner consistent with the organization of the proposed new rule. The deadline for submission of comments is thirty (30) days from the date of publication of the proposed sections in the Texas Register . Comments received after that deadline submission date or comments submitted electronically without "inspector civil liability" in the subject line may not be considered.
The commission proposes the new rule under Property Code §408.001, which provides general authority for the commission to adopt rules necessary for the implementation of Title 16 of the Property Code; under Property Code §427.003, as promulgated by House Bill 1038; and under Government Code §§2001.021-2001.039, especially §2001.39, which requires state agencies to periodically review their rules.
No other statutes, articles, or codes are affected by the proposal.
§303.212.Inspector Civil Liability.
(a) A person who serves the commission as a third-party inspector or a state inspector is not liable for civil damages during the performance of his duties, unless acting with wanton and willful disregard for the rights, safety, or property of another. This subsection does not apply to an intentional act of misconduct or gross negligence.
(b) A third-party inspector who has been sued as a named defendant or third-party defendant in a civil lawsuit shall provide the commission written notice within ten days after being served. The notice will provide the name of the third-party inspector, the name of the docketed proceeding, the docket number, the parties to the suit, and the name of the court where the proceedings are to be held. The written notice will be sent to the commission by mail or facsimile. This subsection does not apply to an inspector serving as a third-party witness.
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 18, 2007.
TRD-200706414
Susan K. Durso
General Counsel
Texas Residential Construction Commission
Earliest possible date of adoption: February 3, 2008
For further information, please call: (512) 463-2886
The Texas Residential Construction Commission (commission) proposes new Chapter 307, §§307.1 - 307.7, regarding the inspections of new residential construction in areas not subject to municipal inspections. The proposed new chapter implements new legislation enacted during the 80th Legislative Session, Regular Session, House Bill 1038 (Act effective Sept. 1, 2007, 80th Leg., Regular Session), which includes changes to Title 16, Property Code. The chapter provides criteria for the inspection of homes which heretofore were not subject to the inspection codes of a municipality. The requirements of this chapter will result in homes that are in greater compliance with the accepted residential building standards, safer, and with fewer construction defects.
The commission will develop an online system for reporting inspection results. The commission will develop a numbering system with a 24 character alpha-numeric identifier that allows builders and remodelers to assign project numbers that can be utilized by fee inspectors to report inspection results. At the time of home registration by the builder, the builder/remodeler will report the project number it assigned to the project so that inspection results and project registration can be associated. If a home registration for a project subject to inspection under this chapter is not associated with inspection results already reported, the builder/remodeler will be given an opportunity to correct any reporting errors before a completion certificate is forwarded to the homeowner.
Ms. Susan Durso, General Counsel for the commission, has determined that, for each year of the first five-year period that the proposed new chapter is in effect, there will be no increase in expenditures or revenue for state government and no fiscal impact for state or local government as a result of enforcing or administering the section.
Ms. Durso has also determined that, for the first five years the new chapter is in effect, the public will benefit from having residences built to the current codes and standards of the state. There is no anticipated economic cost to small businesses or persons who are required to comply with the proposed new chapter.
Ms. Durso has also determined that, for each year of the first five-year period the proposed new chapter is in effect, there should be no effect on a local economy; therefore, no local employment impact statement is required under the Administrative Procedure Act, §2001.022.
Ms. Durso has also determined that, for each year of the first five-year period the proposed new chapter is in effect, there may be an adverse economic effect on small businesses that build in areas not subject to municipal inspection. However, the requirement that a builder or remodeler in those areas obtain interim construction inspections is required by statute; therefore, no regulatory alternative is available. Accordingly, no regulatory flexibility analysis is necessary.
Comments on the proposed new chapter may be submitted to Susan K. Durso, General Counsel, Texas Residential Construction Commission, 311 E. 14th Street, Austin, Texas 78701 or by fax to (512) 475-2453. Comments may also be submitted electronically to comments@trcc.state.tx.us. For comments submitted electronically, please include "Chapter 307" in the subject line. The deadline for submission of comments is thirty (30) days from the date of publication of the proposed rule in the Texas Register . Comments should be organized in a manner consistent with the organization of the rule under consideration. Comments submitted after the deadline for submittal, submitted to a different address, or submitted electronically without "Chapter 307" in the subject line, may not be accepted.
The new chapter is proposed pursuant to Property Code, §408.001, which provides general authority for the commission to adopt rules necessary for the implementation of Title 16 of the Property Code, and Property Code, Chapter 446, which requires that certain new residential construction projects be subject to inspection.
No other statutes, articles, or codes are affected by the proposed new chapter.
§307.1.Code Compliance Inspections Required.
(a) A builder or remodeler who enters into an agreement with a homeowner for a transaction governed by the Act and a home located in a geographic area of the state that is not subject to municipal inspection must hire a qualified fee inspector to inspect the construction for applicable code compliance as required by this chapter.
(b) A builder may use the same or a different fee inspector for the inspections required under this chapter.
(c) For new home construction subject to the inspection requirements of this chapter, a fee inspector shall conduct inspections of the construction project for compliance with the applicable codes at the following stages of construction:
(1) the foundation, prior to the placement of concrete;
(2) the framing and mechanical systems prior to the installation of insulation, wall board or other wall covering facing the home's interior; and
(3) the home upon substantial completion and if not occupied, prior to occupancy.
(d) For improvements to an existing home, a fee inspector shall conduct inspections for code compliance, as applicable, at the following stages of construction if included in the scope of the construction project:
(1) the foundation, prior to the placement of concrete;
(2) the framing and mechanical systems prior to the installation of insulation, wall board or other wall covering facing the home's interior; and
(3) the home upon substantial completion and if not occupied, prior to occupancy.
(e) When conducting inspections under this chapter, fee inspectors will utilize forms promulgated by the commission to record their findings and conclude whether the construction is code compliant.
§307.2.Windstorm Insurance Compliance Inspections.
For residential construction in an unincorporated area in which windstorm coverage is available under Chapter 2210, Insurance Code, a builder or remodeler must obtain a certificate of compliance for the structure in the manner provided under §2210.251, Insurance Code, pursuant to the Texas Department of Insurance regulations.
§307.3.Qualified Fee Inspectors.
(a) To serve as a fee inspector under this chapter, an individual must be one of the following:
(1) a professional engineer licensed by the Texas Board of Engineering;
(2) an architect registered with the Texas Board of Architectural Examiners;
(3) a professional inspector licensed by the Texas Real Estate Commission; or
(4) a third-party inspector registered with the commission under Chapter 303, Subchapter C of this title.
(b) The license or registration issued by one of the state governmental bodies listed in subsection (a) of this section must be in an active status of good standing with the issuing body at the time of hire, for the individual to be eligible to serve as a fee inspector under this chapter.
§307.4.Reporting.
(a) The commission will create a unique project numbering system utilizing a builder's registration number for builders and remodelers to assign to each new residential construction project that is subject to the inspection requirements of this chapter. The commission will use the unique project number to track the inspections reported on each project.
(b) A fee inspector who conducts an inspection pursuant to §307.1 of this chapter will:
(1) obtain a unique password from the commission in order to report the satisfactory completion of each inspection performed pursuant to this chapter to the commission; and
(2) report the completion of the inspection using the assigned project number provided by the builder or remodeler via a commission-provided secure Web portal;
(c) Individual fee inspectors who are unable to submit inspection results via the commission's secure Web portal may submit a written request for a waiver. The commission will provide an alternate method for reporting inspection information.
(d) When registering a home subject to the inspection requirements of this chapter, a builder or remodeler will provide the unique project number it assigned to the property and provided to the fee inspector and, if required to obtain a certificate of compliance under §307.2 of this chapter, will report the WI-8 certificate number at the time the home is registered.
§307.5.Certificate of Completion.
(a) Within 30 days following the registration of a home subject to the inspection provisions of this chapter, the commission shall issue a certificate of completion to the homeowner and the builder, if the inspection reports have been timely received.
(b) If the required inspection reports have not been received within 30 days following the registration of a home subject to the inspection provisions of this chapter, the commission will issue a letter notifying the builder and homeowner that the registration was received but that the commission records do not show compliance with the statutory inspection requirements for code compliance.
§307.6.Compliance Audits.
(a) At least annually the commission will conduct random compliance audits of home registration records for residential construction projects subject to this chapter.
(b) A builder or remodeler will maintain inspection records showing proof of compliance with the inspection requirements of this chapter for a period of five years following home registration under Chapter 303, Subchapter B of this title.
§307.7.Failure to Comply with Inspection Requirements.
A builder or remodeler who fails to comply with the inspection requirements of this chapter will be subject to disciplinary action pursuant to the provisions of Chapter 305 of this title.
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 18, 2007.
TRD-200706410
Susan K. Durso
General Counsel
Texas Residential Construction Commission
Earliest possible date of adoption: February 3, 2008
For further information, please call: (512) 463-2886
10 TAC §§313.1 - 313.7, 313.11, 313.13, 313.15 - 313.18, 313.20, 313.21, 313.26
The Texas Residential Construction Commission (commission) proposes amendments to 10 Texas Administrative Code (TAC) §§313.1 - 313.7, 313.11, 313.13, 313.15 - 313.18, 313.20, 313.21, and 313.26 regarding the State-sponsored Inspection and Dispute Resolution Process (SIRP). The proposed amendments implement changes to Property Code §§401.003, 418.001, 426.001, 426.004 - 426.007, 428.001, 428.003, 428.004, and 429.001 that were enacted by the 80th Texas Legislature in House Bill (H.B.) 1038.
Amendments to §313.1. Purpose.
The commission proposes amendments to §313.1, Purpose, in order to more accurately describe the information provided by the commission to members of the public who make inquiries about the SIRP process. The proposed modification is consistent with Texas Property Code, §428.001(f).
Amendments to §313.2. Prerequisite to State-sponsored Inspection and Dispute Resolution Process (SIRP).
The commission proposes amendments to §313.2, Prerequisite to State-sponsored Inspection and Dispute Resolution Process (SIRP), necessary for consistency with amendments to Texas Property Code, §418.001 and §426.005 resulting from H.B. 1038.
Amendments to §313.3. Notice of Defect Alleging Threat to Health or Safety.
The commission proposes amendments to §313.3, Notice of Defect Alleging Threat to Health or Safety, to clarify when a builder fails to cure in a reasonable time a defect that threatens health or safety and the homeowner chooses to repair the defect. However, once defects have been repaired, they are no longer defective; therefore, a third-party inspector can no longer inspect the defect alleged to have previously existed or make a recommendation for repair and the commission does not have authority to order the payment of damages for expenses incurred by a homeowner who makes repairs in this circumstance.
Amendments to §313.4. Timely Filing a Request to Initiate the SIRP.
The commission proposes amendments to §313.4 regarding timely filing a request to initiate the SIRP necessary to implement H.B. 1038 changes to Property Code, §426.001, which delineate the disputes between homeowners and builders to which the Act applies, and to Property Code, §426.006, which establishes new warranty deadlines. The proposed amendments describe the timeframes within which a person must file a timely request for state inspection.
House Bill 1038 modified the two deadlines in Property Code, §426.001 and §426.006 for filing a request with the commission to initiate a SIRP and added a third deadline to Property Code, §426.006, for requesting a SIRP for defects that are not reasonably discoverable within the applicable warranty period.
The first deadline is set forth in Property Code, §426.001(a). Previously, Property Code, §426.001(a) provided that a SIRP request must be submitted to the commission on or before the tenth anniversary of either the date of the initial transfer of title from the builder to the initial owner of the home or improvement or, if there is no closing, the date on which the parties entered into the contract for construction of the improvement. House Bill 1038 amended Property Code, §426.001(a), to provide that a SIRP request must be submitted to the commission not later than the 30th day after the tenth anniversary of either the date of the initial transfer of title from the builder to the initial owner of the home or improvement or, if there is no closing in which title is transferred, the date on which the construction of the improvement was substantially completed.
The amendments proposed to §313.4 implement these changes to Property Code, §426.001(a); add an additional 30 days to the 10-year period within which a SIRP request must be filed; and provide that, for transactions that do not involve a transfer of title, the filing period begins on the date on which the construction of the improvement was substantially completed rather than the date on which the parties entered into the contract for construction of the improvement. Additionally, the proposed amendments to §313.4 clarify that the filing period applies to the initial owner of an improvement and not just to the initial owner of a home. The proposed amendments are necessary for consistency with Property Code, §426.001(a)(2).
The second deadline for filing a request with the commission to initiate a SIRP is set forth in Property Code, §426.006. Previously, Property Code, §426.006, provided that the SIRP must be requested on or before the second anniversary of the date of discovery of the conditions claimed to be evidence of the construction defect but not later than the 30th day after the date the applicable warranty period expires. House Bill 1038 amended Property Code, §426.006, to provide that, for an alleged defect discovered during an applicable warranty period, a SIRP must be requested on or before the second anniversary of the date of discovery of the conditions claimed to be evidence of the construction defect but not later than the 90th day after the date the applicable warranty period expires. Thus, H.B. 1038 added an additional 60 days to the period within which a SIRP request may be filed and limited the applicability of this extended filing period to alleged defects discovered during an applicable warranty period.
The amendments proposed in §313.4(a)(1) implement the changes to Property Code, §426.006. The proposed amendments add an additional 60 days to the deadline to request a SIRP for an alleged defect that is discovered during an applicable warranty period, so that the filing period will end not later than the 90th day after the date the applicable warranty period expires, rather than the 30th day after the warranty period expires.
A third deadline for SIRP requests was added to Property Code, §426.006, by H.B. 1038. Property Code, §426.006(b), establishes a new deadline for a SIRP request related to an alleged defect that would violate the statutory warranty of habitability and was not discoverable by a reasonable, prudent inspection or examination of the home or improvement within the applicable warranty period. For these defects, Property Code, §426.006(b), provides that a SIRP must be requested on or before the second anniversary of the date of discovery of the conditions claimed to be evidence of the construction defect and not later than the 10th anniversary of the date of the initial transfer of title from the builder to the initial owner of the home or improvement that is the subject of the dispute or, if there is no closing, the date that the parties entered into the contract for construction of the improvement. The amendments proposed in §313.4(b) implement these changes to Property Code, §426.006(b).
Amendments to §313.5. Filing a Request to Initiate the SIRP.
The commission proposes amendments to §313.5, Filing a Request to Initiate the SIRP. The proposed amendments are necessary to implement amendments to Property Code, §426.004(c), that were enacted by the 80th Texas Legislature in H.B. 1038. Previously, Property Code, §426.004(c), provided that the person who submits a request to initiate the SIRP must pay to the commission the home registration fee for the home if title to the home was transferred to the initial homeowner on or before January 1, 2004, or if the contract for improvements or additions between the builder and the homeowner was entered into before January 1, 2004. House Bill 1038 amended Property Code, §426.004(c), by requiring the commission to register homes that are the subject of a request to initiate the SIRP for which the title transfer to the initial homeowner or the date of the contract for improvements or additions occurred prior to January 1, 2004. The statute requires the builder to pay the registration fee.
The proposed amendments to §313.5(b) implement these statutory changes by clarifying that, if the affected home is not registered with the commission at the time that a SIRP request is filed, the commission shall register the home and the builder shall pay the registration fee for the home. The proposed amendments assign responsibility to the builder to pay the registration fee for a home that has not previously been registered with the commission and that is the subject of the SIRP. The proposed amendments eliminate questions and the need for the commission to make factual determinations regarding whether a homeowner who has initiated the SIRP must register the home or pay the home registration fee. Therefore, the proposed amendments will allow the commission to more efficiently register homes, initiate the SIRP, clarify the builder's role in the registration process, and protect the public.
Amendments to §313.6. Information Required for the Request.
The commission proposes amendments to §313.6, Information Required for the Request to implement statutory modifications, to change the qualifications that establish a builder under the Act, and require that evidence of the sale of a new home or the date of an agreement for construction, including any change orders, is provided as a part of a request, if the documents exist.
Previously, Property Code, §401.003(a)(3), defined a builder to include a person who constructs or supervises or manages the construction of an improvement to the interior of an existing home when the cost of the work exceeds $20,000. House Bill 1038 expanded this definition by including a person who sells, constructs, or supervises or manages the construction of, or contracts for the construction of or the supervisions or management of the construction of, an improvement to the interior of an existing home when the cost of the work exceeds $10,000. The proposed amendments to §313.6(a) are necessary to implement this change. To initiate the SIRP for an alleged defect, the requestor would have to establish that the contract or the construction relates to an interior improvement with costs in excess of $10,000.
The amendments proposed to §313.6(a) also change the dates to be included with the SIRP. Previously, this subsection required a SIRP requestor to provide the date on which the agreement describing the transaction was signed or work commenced, whichever is earlier. The proposed amendments delete the requirement that the SIRP requestor must provide the date that work commenced and add a requirement that a SIRP requestor must provide the date on which the construction of the improvement was substantially completed. This change is necessary to implement the amendment of Property Code, §426.001(a)(2)(B), in H.B. 1038, which requires a SIRP request to be filed not later than the 30th day after the 10th anniversary of the date on which the construction of an improvement was substantially completed for transactions in which there was no closing in which title is transferred. Although H.B. 1038 deleted the reference in Property Code, §426.001(a)(2)(B), to the date that a contract for improvements was entered into, the proposed amendments to §313.6(a)(1)(B) retain the requirement that a SIRP requestor must provide the date on which the agreement describing the transaction was signed. This is because H.B. 1038 also added a new requirement in Property Code, §426.006(b)(2), that a SIRP request for a transaction in which there was no closing in which title was transferred and for an alleged defect that would violate the statutory warranty of habitability that was not discoverable by a reasonable, prudent inspection or examination of the home or improvement within the applicable warranty period must be submitted not later than the 10th anniversary of the date on which the contract for construction of the improvement was entered into. Thus, by requiring that a SIRP requestor provide both the date that construction of the improvement was substantially completed and the date that the agreement describing the transaction was signed, the commission can determine whether the SIRP request is eligible for its consideration under Property Code, §426.001(a)(2)(B) and §426.006(b)(2).
Proposed amendments to §313.6 add a requirement that the SIRP include a copy of the sales or construction contract and change order, if any. If these documents are in existence and submitted as part of the SIRP, commission staff is able to review documents in a more efficient manner.
Proposed amendments to §313.6(a) replace the reference to "chapter" with reference to "title" to indicate that the cross reference is to a rule section within Title 10 and to conform with Texas Register rule format guidance.
Amendments to §313.7. Notice of the Request.
The commission proposes amendments to §313.7, Notice of the Request, necessary to implement changes made by the 80th Texas Legislature in H.B. 1038 to Property Code, §426.005 (a) and (f) and §428.001(d).
The proposed amendments to §313.7(a) clarify that, at the time a SIRP is initiated, the requestor must send to each of the other parties to the SIRP a copy of the request, information, and evidence. Previously, the rule did not specify that the SIRP requestor is the entity responsible for providing the information to the other party and did not specify that it is at the time that the SIRP is filed that the SIRP information must be provided to the other party. The requirement that a copy of the documents be sent to the opposing party will provide information to the other party regarding the specific items alleged to be defective, thereby encouraging better communication between parties regarding the alleged defects.
Amendments are proposed to add §313.7(d), which provides that, when the party which did not initiate the SIRP receives the list of alleged defective items, that non-initiating party has ten days from the date of receipt of the notice to review the list of defective items and may request in writing the commission add items alleged to be defective for inclusion in the third-party inspection. The provisions are needed because the commission favors efficient use of the SIRP process. By affording both parties an opportunity to contribute to the list of alleged defective items to be addressed in the SIRP, a more complete review can be efficiently made of all the alleged defects.
Amendments are proposed to add §313.7(e), to address the potential issues that arise when a builder initiates a SIRP and the homeowner declines to participate. In such instance, the commission will close the SIRP file and inform the parties, in writing, that the homeowner has elected not to participate in the process.
Amendments to existing §313.7(d) are found in proposed §313.7(f). Previously, homeowners were required to request a SIRP before initiating an action for damages. The proposed rule amendment clarifies that both homeowners and builders may access the benefits and are subject to the requirements of the SIRP process. Both homeowners and builders are required to fulfill SIRP requirements before proceeding to an action for damages.
Amendments are proposed to add §313.7(g). A homeowner is not required to go through the SIRP process before initiating an action for damages if, at the time a contract between the homeowner and builder was signed, the builder was supposed to be registered and was not or if the commission revoked the builder's registration. Builders were required to be registered on and after March 1, 2004. The provisions of Property Code, 426.005(f), apply to SIRP requests initiated after September 1, 2007, the date the statutory amendment became effective. When all these requirements are satisfied, the homeowner may proceed directly to an action for damages without first exhausting the SIRP administrative remedies at the commission.
Amendments to §313.11. Appointment of Third-Party Inspector.
The commission proposes amendments to §313.11, Appointment of Third-Party Inspector, necessary to implement a change in Property Code, §428.003(a), that was enacted by the 80th Texas Legislature in H.B. 1038. The proposed amendment provides that the commission must appoint an inspector within 30 days after the commission has determined that a request to initiate a SIRP is complete and that the dispute is eligible for the SIRP. Previously, the rule provided that the commission must make its appointment within 15 days after its determination that a SIRP request is complete and eligible for the SIRP.
The commission also proposes amendments to §313.11 to clarify the timeframe in which a party to the SIRP must object to the third-party inspector assigned by the commission. Each party has one opportunity to object to a third-party inspector that has been appointed by the Commission; however, such objection must be made within two business days from the date of notice of the identity of the third-party inspector. Commission staff determined that parties were not picking up registered letters from the U.S. Postal Service; therefore, finalization of the third-party inspector was often delayed. The proposed rule amendments eliminate the need for the commission to send correspondence regarding the identity of the third-party inspector by certified letter because the recipient of the letter will be presumed to have received the transmittal three days after the date of the letter when sent by regular first-class mail and presumed to have received the letter on the same day if sent by facsimile or by e-mail, unless the party is able to show otherwise.
The proposed amendments address deadlines in the SIRP process, move the SIRP through the process in a timely manner, and provide more time to the commission to properly review each request for a SIRP inspection. This will aid the commission staff in its review and assessment of SIRP requests that the commission continues to receive in high volume each month.
Additional proposed amendments to §313.11 to cross reference to §313.13, clarifying when parties may contact the third-party inspector and emphasizing that, when a party provides information to the third-party inspector, the party must also provide the information to the commission and to the other party to the dispute.
The commission proposes amendments to §313.11 to clarify that the commission is not required to assign an inspector whose name appears next on the list of available inspectors because, at times, it is necessary to select a third-party inspector with specialized knowledge about a particular alleged defective item. To allow for effective inspections to be performed, the rule acknowledges the commission's discretion to assign an inspector out of order of the prescribed list.
Amendments to §313.13. Home Inspection and the Third-Party Inspector's Report.
The commission proposes amendments to §313.13, Home Inspection and the Third-Party Inspector's Report. Proposed amendments to §313.13(a) expand the deadline during which the third-party inspectors must contact the parties to a SIRP. Previously, the third-party inspector had two business days to contact the parties. The proposed amendments provide greater flexibility by allowing the third-party inspector up to five calendar days after the inspector receives the SIRP request documents from the commission to contact the parties. The modification reflects the usual practice of most third-party inspectors.
Proposed amendments to §313.13(c) clarify that third-party inspectors should include sufficient information and documentation with their report to support their findings. Commission staff notes that some third-party inspectors provide insufficient information, documentation, or description to support the inspection report. Appropriate documentation includes photographs, measurements, interviews of the home owner, interviews of the builder, and interviews of any consultants. The proposed amendments indicate the commission's preference for inclusion of photographs to document the third-party inspector's findings, because inclusion of photographs will significantly reduce the number of reports that must be returned to the inspector for revision or remand.
Proposed amendment to §313.13(g) will make applicable to both the builder and homeowner the requirement to provide documentation to the third-party inspector.
The proposed amendment to §313.13(i) is necessary to implement an amendment of Property Code, §428.004(a), that was enacted by the 80th Texas Legislature in H.B. 1038. Previously, Property Code, §428.004(a), required a third-party inspector to issue a recommendation within 15 days after the inspector received an appointment by the commission to perform an inspection of workmanship, materials, and non-structural matters ("workmanship inspection") in a SIRP. House Bill 1038 increased from 15 to 30 the number of days in which the third-party inspector of a nonstructural matter must issue the recommendation. When the disputed defect involves a structural matter, the third-party inspector must issue a recommendation within 60 days from the date the assignment is made. The effect of the statutory amendment is to grant third-party inspectors an additional 15 days to issue their recommendations for workmanship inspections. The proposed rule amendment increases the deadline from 12 days to 25 days from the date that the inspector receives from the commission the SIRP request and the materials submitted by the requestor to provide the commission with the workmanship and materials inspection report.
Amendments to §313.15. Extension of Time.
The commission proposes amendments to §313.15, Extension of Time, regarding extension of time necessary to increase the number of days from five to ten that the commission may extend a third-party inspector's deadline for conducting the inspection and issuing the inspection report. The amendment is needed for flexibility and to reflect the usual and practical extensions of time that are granted. Additional amendments are proposed for easier reading of existing text and to clarify that all parties do not have to be in agreement before the commission may allow an extension of time. Rather, the proposed change reflects that an extension of time is discretionary.
Amendments to §313.16. Third-Party Inspector's Report.
The commission proposes amendments to subsection (c) of §313.16, Third-Party Inspector's Report, regarding third-party inspector's report necessary to clarify that a time period of ten business days is a reasonable time for a third-party inspector to revise a report and return it to the commission. The revision is necessary to remove vague language and to encourage third-party inspectors to promptly address the revisions requested. The proposed amendment is consistent with other changes made in the statute to provide additional amounts of time for third-party inspectors to issue inspection reports.
Amendment to §313.17. Issues Remanded to the Third-Party Inspector.
The commission proposes amendments to §313.17, Issues Remanded to the Third-Party Inspector, for consistency with commission practice. Proposed amendments to §313.17(b) are necessary to clarify that the commission may assign a new, subsequent third-party inspector when the initial third-party inspector assigned to the SIRP fails to provide to the commission a report on remanded issues. Proposed amendments to §313.17(b) retain existing rule allowances; however, the proposed amendments simplify the rule language for easier reading and clarify the options available to the commission when addressing a third-party inspector's failure to provide a complete report on remanded items.
The proposed amendments to §313.17(c) provide the commission with five business days, rather than three, for the third-party inspector's report to be reviewed and forwarded to the builder and homeowner. The added days are necessary to allow commission staff sufficient opportunity to review and process the report, and the proposed amendment is consistent with the expansion of deadlines allowed in other portions of the Property Code.
Amendments to §313.18. Order for Reimbursement of Fees and Costs.
The commission proposes amendments to §313.18, Order for Reimbursement of Fees and Costs, regarding order for reimbursement of fees and costs necessary to implement changes in Property Code, §426.004 and §428.004, that were enacted by the 80th Texas Legislature in H.B. 1038 and to clarify a cross-reference.
House Bill 1038 added subsection (d) to Property Code, §426.004, which provides that the commission may reimburse an inspector for travel expenses incurred to complete a SIRP inspection regardless of whether the expenses exceed the amount collected under Property Code, §426.004. The proposed amendments in §313.18(c) implement this change and provide the circumstances under which travel expenses will be reimbursed. The expenses covered by this provision include actual mileage, meals for overnight stays, and lodging for overnight stays. The proposed amendments will aid the commission in obtaining and retaining the services of third-party inspectors who are willing to perform SIRP inspections for the commission in areas of the state in which there is little or no coverage by other third-party inspectors. It is anticipated that this will improve the commission's ability to expedite the SIRP process to homeowners and builders who are located in these areas.
House Bill 1038 also added subsection (e) to Property Code, §428.004, which provides that the commission may not require a builder to reimburse fees or inspection expenses under Property Code, §428.004, if, before the inspection, the builder offered to make repairs or have repairs made substantially equivalent to those required by the findings of the final report confirming the defect requiring repair. The proposed amendments implement this change and require the builder to demonstrate that the offer was made in writing, that the homeowner had notice of the offer to repair, and that the offer was not accepted by the homeowner.
The proposed amendments also correct a citation reference regarding fees paid by the homeowner. The proposed amendment changes the cross-reference from §313.5 to correctly reference §313.8.
Amendments to §313.20. Appeal Process.
The commission proposes amendments to §313.20, Appeal Process, necessary to implement a change in Property Code, §429.001(c), that was enacted by the 80th Texas Legislature in H.B. 1038, and to clarify the appellate process from the point at which the appeal panel remands an item back to the third-party inspector. The proposed amendments provide that, upon receipt of an appeal from either party in a SIRP proceeding, the Appeals Panel will review the recommendation of the third-party inspector for compliance with Title 16 of the Property Code.
The proposed amendments clarify the standard under which the Appellate Panel must review the recommendations of third-party inspectors in SIRP proceedings. Previously, compliance with the Act was not specifically mentioned in Property Code, §429.001(c), as the standard of review for third-party inspectors' recommendations.
In addition, the proposed amendments cross reference to §313.17 and clarify that, when the commission's appeal panel remands one or more items to the third-party inspector, the inspector will respond to the items remanded and provide a report to the commission for consideration by the appeal panel. When a third-party inspector fails to file such report on remand within ten business days of the receipt of the appellate report, then the commission assigns a new third-party inspector to inspect the remanded items and to file a report with the commission regarding those items.
Amendments to §313.20(f) are proposed to reconcile a timing issue created when the builder and homeowner file appeals of the third-party inspection report weeks apart. Previously, the initial triggering mechanism was from the date of appeal. However, the other party might not file an appeal for several days thereafter. The proposed amendment triggers the date from the expiration of the period of time given to the parties to file an appeal. The amendment is necessary to assure that the appellate panel has adequate time to review and consider the appeal and third-party inspection report.
In addition, amendments are proposed to §313.20(h) to delete the term "Executive Director" and substitute the term "commission" for consistency with the definition of commission under §301.1(7) of this title and with commission practice.
Amendments to §313.21. Offer to Repair After Issuance of a Final Unappealable Report.
The commission proposes amendments to §313.21, Offer to Repair After Issuance of a Final Unappealable Report, necessary to implement a change to Property Code, §418.001(21), which was modified by the 80th Texas Legislature in H.B. 1038. The statutory provision makes clear that the commission may initiate a disciplinary action when a builder repeatedly fails to make an offer to repair based on the recommendation of the third-party inspector's report or the final and unappealable appeal panel decision affirming the existence of a defect.
Amendments to §313.26. Third-Party Inspectors as Witnesses. The commission proposes amendments to §313.26, Third-Party Inspectors as Witnesses, to clarify that the commission has complied with statutory requirements, established a fee schedule, and made that schedule of fees available to the public on the commission's Web site.
Concurrent with this rulemaking proposal, the commission proposes the intention to review necessity of the rules in 10 TAC Chapter 313, including §§313.1 - 313.27, in accordance with Government Code, §2001.39, which requires each state agency to periodically review its rules. Persons with comments relating to the continued existence of these rules may submit remarks separately or concurrently with comments regarding the proposed amendments.
Susan Durso, General Counsel, has determined that, for each year of the first five-year period that the proposed amendments are in effect, there will be no fiscal implications for local governments as a result of enforcing or administering the proposed amendments. There will be a fiscal impact on state government to the extent that agency expenditures on inspector travel increase. However, this fiscal impact was considered by the legislature when it added the authorization to the agency's enabling Act for reimbursement of third-party inspectors for their travel expenses.
Ms. Durso has also determined that, for each year of the first five-year period the proposed amendments are in effect, the public will benefit from: (1) clarification regarding the deadlines by which persons may submit a request to the commission to initiate the SIRP; (2) having additional time within which to initiate the SIRP; (3) clarification of the differences between defects that were discovered and defects that were not discoverable during the applicable warranty period; (4) not having to register or pay the home registration fee for a home in order to initiate the SIRP, so long as the homeowner is not the builder of the home; (5) having greater accessibility to the SIRP when interior improvements cost between $10,000 and $20,000, because such projects are now eligible for the SIRP process; (6) having a better understanding of the notification to other parties that is required when a SIRP request is filed with the commission; (7) the commission staff having more time to properly review and assess each SIRP request that it receives to ensure that each SIRP request is complete and within the jurisdiction of the commission to consider; (8) third-party inspectors having additional time within which to issue their recommendations for workmanship inspections; (9) a greater number of third-party inspectors who are available to conduct SIRP inspections in areas that currently have few or no third-party inspectors available to conduct the inspections, which, in turn, will expedite the inspections and the SIRP as a whole for affected homeowners and builders in these areas; (10) the Appeals Panel having a clearer standard to apply in its reviews of third-party inspectors' recommendations in SIRP proceedings; and (11) the increased incentive to builders to resolve complaints before homeowners initiate the SIRP or litigation against them.
Ms. Durso has also determined that, for each year of the first five-year period the proposed amendments are in effect, there will be no significant effect on individuals or large, small, and micro-businesses as a result of the adoption of the proposed amendments.
Ms. Durso has also determined that, for each year of the first five-year period the proposed amendments are in effect, there should be no effect on a local economy; therefore, no local employment impact statement is required under the Administrative Procedure Act, §2001.022.
Ms. Durso has also determined that, for each year of the first five-year period the proposed amendments are in effect, there will be an adverse economic effect on small businesses that provide remodeling services in the range of cost between $10,000 and $20,000 and an insignificant adverse economic effect on small businesses that are required to pay the home registration fee as a result of a customer having filed a request for a state inspection. However, because the proposed amendments track the legislative mandate that these businesses are subject to the SIRP and must pay the home registration fee for homes that they have not registered with the commission that are involved in the SIRP, there is no regulatory alternative available. Therefore, no regulatory flexibility analysis is necessary.
Interested persons may submit written comments on the proposed rule amendments to Susan K. Durso, General Counsel, Texas Residential Construction Commission, P.O. Box 13509, Austin, Texas 78711. Comments may be submitted electronically to comments@trcc.state.tx.us. For comments submitted electronically, please include "SIRP" with the rule number(s) in the subject line. Comments should be organized in a manner consistent with the organization of the proposed rule amendments. The deadline for submission of comments is thirty (30) days from the date of publication of the proposed sections in the Texas Register. Comments received after that deadline submission date or comments submitted electronically without "SIRP" with the rule number(s) in the subject line may not be considered.
The amendments are proposed pursuant to Property Code, §§408.001, 401.003, 418.001, 426.001, 426.004 - 426.007, 428.001, 428.003, 428.004, and 429.001, as amended by H.B. 1038 of the 80th Texas Legislature, and Government Code, §§2001.021 - 2001.039, especially §2001.39.
No other statutes, articles, or codes are affected by the proposal.
§313.1.Purpose.
(a) The state-sponsored inspection and dispute resolution process (SIRP) described in this chapter applies to a dispute that:
(1) is between a homeowner and a builder;
(2) arises from a transaction governed by the Act;
(3) is a result of alleged construction defect(s) that were discovered on or after September 1, 2003; and
(4) is the basis for a claim other than a claim solely for personal injury, survival, wrongful death or damage to goods.
(b) The commission shall provide any person who files
a request with a copy of the commission's policies and procedures
relating to
the SIRP process
[
investigation and resolution of a request.
]
§313.2.Prerequisite to State-sponsored Inspection and Dispute Resolution Process (SIRP).
(a) Before a homeowner
files
[
may file
]
a request to initiate the SIRP,
the
[
a
] homeowner
must give the builder a 30-day written notice of any claimed construction
defect(s).
(b)
When the homeowner initiates the SIRP request in accordance with
[
After notice has been provided to the
builder as required in
] §313.2(a), the homeowner must [
also
] provide the builder, or its designated consultants, a reasonable
opportunity to inspect the affected home if the builder requests such
an opportunity.
(c) If a homeowner contacts the commission to initiate the SIRP before the homeowner has provided the builder with the required written notice and the applicable inspection opportunity, the homeowner will be provided with the requirements and the procedures for filing a request to initiate the SIRP, and instructions on the procedure to initiate the SIRP if the dispute remains unresolved.
(d) If the homeowner has failed to provide thirty days notice for every item listed in a SIRP request, the commission will:
(1) exclude the item from the list of alleged defects
to be inspected; [
or
]
(2)
[
at the homeowner's request,
] hold the
SIRP
during
[
until the builder has had
] the
requisite thirty days notice
period
[
for all alleged
items to be inspected
]; or
(3) allow the builder to waive the requisite notice under this section if the builder agrees in writing that the third-party inspector can inspect and report on alleged defects for which the builder did not receive thirty days notice before moving forward with the SIRP requested inspection of those items.
§313.3.Notice of Defect Alleging Threat to Health or Safety.
(a) A builder who receives written notice of an alleged construction defect that creates an imminent threat to the health or safety of the inhabitants of the residence shall take reasonable steps to cure the defect as soon as practicable. If a builder fails to cure the defect in a reasonable time, the homeowner may have the defect cure and recover from the builder of the homeowner's reasonable costs to cure the defect, reasonable attorney's fees, expenses associated with curing the defect, and other damages not inconsistent with the Act.
(b) The commission does not have authority to order the reimbursement of expenses incurred by a homeowner under subsection (a) of this section.
(c) Defects that have been repaired before a SIRP is requested are not eligible for inspection or repair recommendation under the SIRP process.
§313.4.Timely Filing a Request to Initiate the SIRP.
(a)
For alleged construction defects
discovered during the applicable warranty period
[
To participate
in SIRP
], a person must file a request to initiate the SIRP:
(1) on or before the second anniversary of the date
of the discovery of the alleged construction defect(s), but not later
than the
ninetieth
[
thirtieth
] day after the
expiration date of any warranty period applicable to the alleged construction
defects(s); and
(2)
not later than the thirtieth day after
[
on or before
] the tenth anniversary of
:
(A) the date of the initial transfer of title from
the builder to the initial owner of the affected home
or improvement;
[
,
] or
(B) if the transaction that is the subject of the dispute
did not involve a title transfer, the date
that
the construction
was substantially complete
[
commenced or the date on which
the agreement describing the transaction was signed, whichever was
earlier
].
(b) For alleged construction defects that violate the statutory warranty of habitability and were not discoverable by a reasonable, prudent inspection or examination of the home within the applicable warranty period, a person must file a request to initiate the SIRP:
(1) on or before the second anniversary of the date of discovery of the conditions claimed to be evidence of the construction defect; and
(2) not later than the 10th anniversary of the date of the initial transfer of title from the builder to the initial owner of the affected home or improvement, or, if there was no transfer of title, the date on which the agreement describing the transaction was signed.
§313.5.Filing a Request to Initiate the SIRP.
(a)
A
[
Either the
] homeowner
or [
the
] builder may initiate the SIRP by filing a request
with the commission.
(b) If the affected home is not registered with the
commission at the time the request is filed,
the commission shall
register the home and the builder shall pay the registration fee for
the home.
[
the requesting party must also register the
home with the commission by submitting a Home Registration Form and
the appropriate fee. A builder who failed to register the affected
home in accordance with Chapter 303 of this title, Registration of
Homes, shall reimburse the cost of the home registration fee if paid
by the homeowner under this section
].
(c) When a person contacts the commission to initiate the SIRP, the commission will provide the person with information necessary to file a request, information on the applicable fees to request a third-party inspection, the registration status of the affected home and instructions to register an unregistered home, if applicable.
§313.6.Information Required for the Request.
(a) The request shall be submitted on a commission-prescribed form and must include:
(1) a description of the transaction giving rise to the dispute, including:
(A) the date on which the title transferred from the builder to the initial homeowner, if the transaction giving rise to the dispute was for new home construction on the builder's property; or
(B) the date on which the
construction of the
improvement was substantially completed and the date on which the
agreement describing the transaction was signed [
or work commenced, whichever
is earlier
], if the transaction giving rise to the dispute did
not involve a title transfer, including new home construction on the
homeowner's property, a material improvement to an existing home or
an improvement to the interior of an existing home when the cost of
the work exceeds
$10,000
[
$20,000
].
(2) a copy of a signed sales or construction contract and any applicable change orders;
(3)
[
(2)
] credible documentation
that establishes that the homeowner provided the builder with or that
the builder received written notice of the alleged construction defect(s)
at least thirty days prior to filing the request if the request was
initiated by the homeowner;
(4)
[
(3)
] a general description
of the builder's response to the homeowner's notice of alleged construction
defect(s) provided pursuant to §313.2(a) of this chapter, and
a copy of the written response, if any;
(5)
[
(4)
] a reasonably detailed
description of the alleged construction defect(s) included in the request;
(6)
[
(5)
] a copy of any applicable
written warranty;
(7)
[
(6)
] an itemized list of
all out-of-pocket expenses and engineering or consulting fees incurred
by the requestor in connection with the alleged construction defect(s);
(8)
[
(7)
] a list of the names
and addresses of all professionals or other persons, known to the
requestor at the time of the filing of the request, who have inspected
the alleged construction defect(s) on behalf of the requestor; and
(9)
[
(8)
] any documents or other
tangible things that depict the nature and cause of the alleged construction
defect(s) and that depict the nature and extent of repairs necessary
to remedy the construction defect(s), including, expert reports, photographs,
and videotapes, if these documents and tangible things are either
within the requestor's physical possession or if the requestor has
the right to obtain the document or tangible thing from a third party,
such as an agent or a representative of the requestor.
(10)
[
(9)
] A requestor is not
required to provide as a part of a SIRP request any of the following:
(A) any documents or tangible things that were prepared or developed in anticipation of litigation, for trial or for an arbitration proceeding by the requestor's attorneys or by the attorneys' representatives or agents for the requestor;
(B) any documents or tangible things that reflect communications between a requestor and the requestor's attorneys or the attorneys' representatives or agents on behalf of the requestor and that were made in anticipation of litigation, for trial or for an arbitration proceeding; or
(C) the name of any person who inspected the home on behalf of the requestor in connection with the construction defect(s) alleged in the request before the SIRP request was submitted to the commission, so long as the requestor will not call upon this person as an expert witness or use any of the materials prepared by this person during either the SIRP or any action between the builder and the homeowner that arises out of an alleged construction defect that is the subject of the request.
(b) With regard to information provided under subsection
(a)(8)
[
(a)(7)
] and
(a)(9)
[
(a)(8)
],
a requestor who fails to submit the name of any person who inspected
the home on behalf of the requestor prior to the filing of a SIRP
request in connection with the alleged construction defect(s) may
be prohibited from designating that person as an expert witness and
from using any materials prepared by such person in the SIRP or any
action arising out of any alleged construction defect(s) that is the
subject of the request.
§313.7.Notice of the Request.
(a)
At the time that a request is filed with the commission, the
[
The
] requestor shall send a copy
of the request and copies of all information submitted to the commission
along with the request, by certified mail, return receipt requested,
to all other interested parties to the dispute.
(b) A copy of the request and the submitted information mailed to other interested parties under subsection (a) of this section must also be mailed to counsel for any interested party represented by counsel, if the identity of counsel is known to the requestor.
(c) An interested party who receives notice that a request has been submitted to the commission and who has information pertaining to the determination of eligibility under §313.9 of this chapter shall submit that information to the commission and provide a copy of the information to the requestor within ten days of receiving a copy of the notice of the request.
(d) A respondent who receives a copy of a request may request that additional items be added to the list of alleged defects for inspection. The respondent must provide the request for additional items in writing to both the commission and to the requestor within ten days of receiving a copy of the notice of the request.
(e) When the homeowner receives notice of a SIRP request and declines to participate in the process, the commission will close the file and notify the parties that the homeowner has elected not to participate in the state-inspection process.
(f)
[
(d)
] A homeowner
or
builder
is required to request a SIRP prior to initiating an
action for damages or other relief arising from an alleged construction
defect.
(g) On or after September 1, 2007, a homeowner may, but is not required to, request a SIRP in compliance with subsection (f) of this section if:
(1) at the time a homeowner and builder entered into a contract, the builder was required by Property Code §416.001 to be registered with the commission but was not registered; or
(2) the builder's certificate of registration has been revoked by the commission.
§313.11.Appointment of Third-Party Inspector.
(a) No later than
thirty
[
fifteen
] days after the commission has determined that the request to initiate
a SIRP is complete and that the dispute is eligible for the SIRP,
the commission shall identify a third-party inspector for assignment
to conduct an inspection and shall notify the requestor and respondent
of the identity of the third-party inspector in writing.
(1) Written notification under this subsection will be provided by the most expedient and effective means that is available to both parties, including facsimile or electronic transmission.
(2) The commission, in its sole discretion, shall determine the most expedient and effective means available to both parties for transmission of the written notice of the appointment based upon the contact information provided by the parties.
(b) The commission shall identify a qualified third-party inspector from the list of registered third-party inspectors maintained by the commission. The inspector identified shall be the next available inspector on the list of qualified inspectors in the affected home's geographic region. The commission has discretion to diverge from assignment of the next available inspector when necessary to identify an inspector who demonstrates proficiency in an area appropriate for the items listed in the SIRP.
(c) Each party shall have
only
one opportunity
to object to the third-party inspector identified, with or without
cause. The objection must be submitted to the commission in writing,
by mail, facsimile or electronic transmission within two business days
from
[
of
] receipt of notice
identifying
[
of the identity of
] the third-party inspector.
Unless otherwise
shown, receipt of notice of the identity of the third-party inspector
under this section shall be presumed to have been received:
(1) on the day sent, if sent by facsimile or electronic transmission; or
(2) three days after the date on which the instrument was mailed, if sent by first-class mail.
(d) Failure to timely notify the commission of a party's objection to the notice of third-party inspector's identity waives the party's right to object.
(e) If the commission does not receive a timely written objection to the third-party inspector notice, the commission shall notify the third-party inspector of the SIRP assignment and provide the inspector with the names of the interested parties and their counsel, if any, and a copy of the SIRP request and other information provided by the parties, if it relates to the inspection request.
(f) After receipt of the assignment notice under subsection (e) of this section, the third-party inspector shall advise the commission of a conflict of interest that prevents him from performing the inspection without bias for or against either party to the dispute or any other reason that the third-party inspector is unable to accept the assignment. If the third-party inspector advises the commission of a conflict of interest that prevents him from accepting the assignment, the inspector will return the material provided to the commission.
(g) If the third-party inspector assigned is unable
to accept the assignment or a party objects timely to the third-party
inspector identified, the commission shall identify another qualified
third-party inspector and the process for assignment of a third-party
inspector shall begin, again, as provided in this
section
[
subsection
].
(h) If a third-party inspector declines an assignment without an explanation that is satisfactory to the Executive Director on more than three occasions, the commission may consider that information when determining whether to continue offering assignments to the inspector and whether to renew the third-party inspector's registration under Chapter 303 of this title.
(i) Until the commission has finally assigned a third-party inspector and the inspector has contacted the parties to determine the date of the inspection, the parties shall not initiate contact with the third-party inspector.
(j) After the third-party inspector has made initial contact with the parties to arrange an inspection, a party may contact the third-party inspector for purposes related to scheduling the third-party inspection, responding to a third-party inspector's inquiry, or to provide written information in accordance with §313.13(h) of this chapter.
§313.13.Home Inspection and the Third-Party Inspector's Report.
(a) As soon as practicable but no later than
five
[
two (2) business
] days after receipt of the SIRP request
documents
, the appointed third-party inspector shall contact the homeowner
to ascertain several dates and times that are mutually convenient
to conduct an inspection of the affected home. The third-party inspector
shall then make reasonable attempts to contact the builder on regular
business days during regular business hours to determine whether the
builder or a representative is available to attend the inspection
on one of the identified dates. If the builder affirms to the inspector
that the builder would like to be present or to send a representative,
the third-party inspector shall make reasonable efforts to work cooperatively
with the builder and the homeowner to identify a mutually convenient
date and time to conduct the inspection. If either party to the dispute
fails to work cooperatively with the third-party inspector to arrange
a time and date for the inspection, the third-party inspector shall
notify the commission. Using the information provided by the third-party
inspector regarding potential dates and times for the inspection,
if any, the commission will resolve the matter for the parties by
setting the date and time for the inspection.
(b) The homeowner and builder, including any of their consultants or representatives, may be present at the inspection.
(c) The third-party inspector shall gather all information
and other data that the third-party inspector, in the inspector's
sole professional judgment, deems relevant to conduct the inspection
and write the inspection report
. Complete reports include, but
are not limited to photographs, measurements, and interviews of
[
and shall gather the information by any reasonable means including
taking photographs and measurements and interviewing
] the homeowner, the builder, and any consultants present,
as necessary
[
in
order
] to document the inspection of the alleged defects.
(d) A third-party inspector may conduct interviews at a later date or outside the presence of others not aligned with the party subject to the interview, if the third-party inspector in the inspector's sole discretion deems it preferable for the orderly conduct of the inspection.
(e) The third-party inspector may suspend the inspection if a party interferes with the inspection in such a manner as to prohibit the third-party inspector from performing the assigned duties in an impartial and professional manner. If the third-party inspector is required to suspend an inspection under this subsection, upon notice and hearing before SOAH, the commission may order the party who caused the suspension to reimburse the commission the costs paid by the commission of any second inspection fee required as provided in §313.18 of this chapter.
(f) The third-party inspector shall not engage independently or employ the services of any testing company or any consultant.
(g) Except as otherwise provided under
§313.6(a)(10)
[
§313.6(a)(9)
] of this chapter, the
respondent
[
builder
] shall submit to the third-party inspector
any documentation or tangible things created or generated as a result
of having received a notice of alleged construction defect(s) under
§313.2 of this chapter for consideration in the third-party inspector's
report to the commission.
(h) Either party may submit any information that the party wants considered by the third-party inspector in preparation of the inspection report to the inspector prior to the inspection or within a reasonable time after the inspection such that the inspector has an opportunity to review the information and timely submit the inspection report to the commission. A party that provides information to a third-party inspector shall also provide a copy of the information to the other party to the dispute and to the commission.
(i) If the alleged construction defect(s) described
in the request do not include a structural matter, the third-party
inspector shall submit a report with recommendations to the commission
as soon as practicable after the inspection, but not later than the
25th
[
12th
] day after the date the third-party inspector
receives the SIRP request and materials submitted by the requestor
from the commission, except as otherwise provided by this chapter.
(j) If the alleged construction defect(s) described in the request include a structural matter:
(1) the third-party inspector shall inspect the home
as soon as practicable after receipt of the request from the commission,
but not later than
25th
[
12th
] day after the
date the third-party inspector receives the request and the requestor's
submitted materials from the commission; and
(2) the third-party inspector shall submit a report
after the inspection with recommendations to the commission as soon
as practicable, but not later than the
55th
[
45th
] day after the date the third-party inspector receives the request
and materials submitted by the requestor from the commission, except
as otherwise provided by this chapter.
(k) The third-party inspector's report shall:
(1) set forth the inspector's findings as to whether each alleged defect is in or out of compliance with the applicable warranty and building and performance standards;
(2) identify the warranty and building and performance standards upon which each finding is based; and,
(3) include one or more reasonable repair or remediation options to address any alleged construction defects found.
(l) A third-party inspector's report shall not include:
(1) a determination of liability or recommendation for payment of monetary damages;
(2) a price for any recommended repairs;
(3) comments regarding matters outside the scope of the SIRP or the third-party inspector's duties;
(4) a determination of the value of any loss allegedly suffered by the homeowner; or
(5) findings or recommendations for repair for alleged construction defects that are not listed in the SIRP or items that have been excluded by the commission as ineligible for inspection unless both the homeowner and builder agree in writing that the third-party inspector can include an inspection of those items in the report or unless the third-party inspector observes a construction defect that if left uncorrected immediately threatens the health and safety of the occupants.
§313.15.Extension of Time.
(a)
The
commission
[
Executive Director
] may grant an extension of time for a period of no longer than
ten
[
five
] days for any deadline imposed on the third-party inspector
under §313.13 of this chapter upon the written request of a third-party
inspector.
(b)
The
commission
[
Executive Director
] may grant an extension of time for any deadline imposed on the third-party
inspector under §313.13 of this chapter upon receipt of a written
request from either party to the SIRP.
(c)
The
commission may
[
Executive Director
shall
] grant an extension of time requested under subsection
(a) of this section upon a showing that the cause for the delay was
not reasonably foreseeable by the third-party inspector when the appointment
was accepted.
(d)
The
commission may
[
Executive Director shall
] grant an extension under subsection (b) of this section
[
as follows
]:
(1) for any reasonable period requested without regard
to cause if the parties to the dispute agree to the extension in writing;
[
or
]
(2) for any reasonable period requested under the circumstances upon a showing of good cause by the requesting party; or
(3)
when the parties
[
if the other party
] to the dispute
do
[
does
] not agree to an extension.
(e) The
commission's
[
Executive Director's
] decision on whether to grant or deny an extension of time
requested under this section is a final agency decision not subject
to further administrative appeal.
§313.16.Third-Party Inspector's Report.
(a) The third-party inspector's report shall be submitted to the commission on the commission's Third-Party Inspection Form or in a format substantially similar to the commission's form, so long as the report includes all of the information required by the commission's form.
(b) The commission shall return any third-party inspector's report that fails to provide the required information or that includes findings, conclusions, comments or other information outside the scope of the third-party inspector's duties to the assigned third-party inspector for revision.
(c) If a third-party inspector fails to revise a report
returned for revision within
ten business days
[
a
reasonable time
] after notification of the need for revision,
the commission may consider that failure in making a determination
whether the third-party inspector has fulfilled his duties and is
thus eligible for payment and in making a determination as to whether
to assign the third-party inspector to future SIRP requests or to
renew the third-party inspector's registration under Chapter 303 of
this title.
(d) The third-party inspector shall submit his completed report to the commission and the commission shall promptly transmit the completed report, or revised report if required, to the homeowner and the builder.
§313.17.Issues Remanded to the Third-Party Inspector.
(a) If the appellate panel remands an issue to the third-party inspector under §313.20 of this chapter, the third-party inspector shall respond to the matter remanded as directed by the appellate panel and file the third-party inspector's report on the remanded matter(s) with the commission within ten business days of receipt of the appellate report.
(b) If a third-party inspector fails to timely file
the report on remanded matters, the commission may
:
[
consider
that failure in making a determination whether the third-party inspector
has fulfilled his duties and is thus eligible for payment and in making
a determination as to whether to assign the third-party inspector
to future SIRP requests or to renew the third-party inspector's registration
under Chapter 303 of this title.
]
(1) assign a subsequent third-party inspector to inspect the remanded items;
(2) decline to pay the initial third-party inspector for failing to complete the report required on remand;
(3) choose not assign the initial third-party inspector to future SIRP requests; and
(4) deny the initial third-party inspector's application for registration renewal under Chapter 303 of this title.
(c) Within
five
[
three
] business
days of receipt of the third-party inspector's report filed pursuant
to subsection (a) of this section, the
commission
[
Executive
Director
] shall issue the report to the parties.
(d) A report issued on remanded matters is subject to appeal pursuant to the provisions of §313.19 and §313.20 of this chapter.
§313.18.Order for Reimbursement of Fees and Costs.
(a) Upon issuance of a final unappealable report in which the findings support all or a portion of the allegations of the requesting party and the requesting party is the homeowner, the Executive Director shall issue an order on behalf of the commission to reimburse the fees paid by the requestor and the costs of the inspection paid by the commission, except as otherwise provided in §313.13(e) of this chapter.
(1) A builder may appeal [
a notice of
] the order to reimburse fees and costs under this subsection.
(2) To appeal the [
notice of
] order to reimburse
fees under this subsection, the builder must file written notice of
its appeal with the commission. The commission will then set the appeal
for a hearing with the SOAH. The hearing will be conducted pursuant
to commission rules. In order to overcome the presumption that the
builder must reimburse the commission for the cost of the inspection
and fees paid by the requestor, the builder must demonstrate [
by
credible documentation
] that, prior to the submission of the
SIRP request to the commission, the builder made a written offer to
the homeowner to repair, by the builder or a third-party, all of the
finally affirmed construction defects in substantially the same manner
as recommended in the commission's final unappealable report, and
that the homeowner had notice of the offer, and that offer was not
accepted by the homeowner.
(3) The notice of appeal must be received by the commission within ten calendar days of the date that the commission notices the builder of the obligation to reimburse the fees and costs under subsection (a) of this section.
(4) Notwithstanding a builder's successful appeal of
an order to reimburse the commission for inspection fees issued under
this subsection, the commission will reimburse the SIRP request fee
to any homeowner who initiates a request and pays the appropriate
fees under
§313.8
[
§313.5
] of this
chapter, if the final unappealable report issued by the commission
affirms at least one alleged construction defect.
(b) If a third-party inspector finds it necessary to suspend an inspection under §313.13(e) of this chapter because a party interferes with the inspection in such a manner as to prohibit the third-party inspector from performing the assigned duties in an impartial and professional manner, then upon notice and hearing before SOAH, the commission may order the party who caused the suspension to reimburse the commission the costs of any second inspection fee required.
(c) If a third-party inspector conducts a SIRP inspection in a county other than the third-party inspector's county or counties of availability as reflected in the inspector's registration on file with the commission at the time of assignment, then the commission may reimburse the inspector at or below the state employee reimbursement rate as determined by the Texas Comptroller, for actual travel expenses pre-approved by the commission, incurred, and documented by the inspector on the approved travel voucher form, submitted with accompanying receipts or proper documentation for:
(1) actual mileage;
(2) meals, for overnight stays only; and
(3) lodging, for overnight stays only.
§313.20.Appeal Process.
(a) A homeowner or builder may appeal the standards applied to support findings or the reasonableness of the repair recommendations in a third-party inspector's report.
(b) Upon receipt of an appeal from either party, the
commission
[
Executive Director
] shall refer the appeal
to a three-person panel of state inspectors. If the request includes
a structural matter, one of the panel members shall be a licensed
professional engineer.
(c) The appellate panel shall conduct a review of the third-party inspector's report for compliance with the Act and the written documents and tangible things considered by the third-party inspector in making the findings and recommendations, including but not limited to materials submitted with the request, any information or data gathered by the third-party inspector and documentation or tangible things provided to the third-party inspector by one of the parties during the SIRP and prior to the issuance of the report.
(d) Information submitted with the appeal by either party that was not provided to the third-party inspector for his consideration when preparing his report will not be provided to or considered by the appellate panel.
(e) The appellate panel shall make written findings of fact and shall recommend approval, rejection or modifications to the findings and recommendations of the third-party inspector or shall recommend that the matter be remanded to the third-party inspector for further action as directed by the appellate panel.
(f) The appellate panel shall file a written report
of its findings and recommendations with the
commission
[
Executive Director
] not later than the 25th day after the
expiration
of the time to appeal the third-party inspection report under §313.19
[
notice of appeal is filed with the commission
].
(g) The commission shall transmit the appellate panel's rulings to the parties to the appeal not later than the fifth day after receipt of the appellate panel's rulings.
(h) The
commission
[
Executive Director
] shall return to the appointed third-party inspector for a response
to
any issue remanded by the appellate panel.
The third-party
inspector will issue a report on any remanded items and return the
report to the appellate panel in accordance with §313.17 of this
title.
(i) A ruling by an appellate panel under this section is a final agency decision not subject to further administrative appeal.
§313.21.Offer to Repair After Issuance of a Final Unappealable Report.
(a) Not later than the 15th day after a SIRP report
issued by the commission has become final and unappealable, a builder
may make a written offer of settlement to the homeowner to repair
the [
alleged
] construction defect(s).
(b) The offer must be sent by certified mail, return receipt requested, to the homeowner at the homeowner's last known address or the homeowner's attorney, if the homeowner is represented by counsel.
(c) The offer may include either an agreement by the builder to repair or to have repaired by an independent contractor, partially or totally at the builder's expense, or at a reduced rate to the homeowner, any construction defect(s) included in the SIRP request.
(d) The offer shall include in reasonable detail the repairs to be made and shall provide that the repairs will be made within forty-five days after the date the builder receives written notice of the homeowner's acceptance of the offer, except as delayed by the homeowner or by the occurrence of events beyond the builder's control.
(e) A builder's repeated failure to make an offer to repair based on the recommendation of a third-party inspector or the final and unappealable holding of an appeal panel decision may result in disciplinary action by the commission.
§313.26.Third-Party Inspectors as Witnesses.
(a) If a commission-appointed third-party inspector who has conducted an inspection pursuant to this chapter is subpoenaed by a party to the dispute that was the subject of the inspection to provide testimony by deposition, in court or in any alternative form of dispute resolution proceeding, or to provide other expert witness services, the party who caused the subpoena to be issued must pay to the third-party inspector a reasonable fee and related expenses for the services requested.
(b) The commission
has established
[
shall establish
] reasonable fees for witness services performed by
a registered third-party inspector who is subpoenaed to provide services
as described in subsection (a) of this section.
The fee schedule
is available through the commission Web site and by request.
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 18, 2007.
TRD-200706420
Susan K. Durso
General Counsel
Texas Residential Construction Commission
Earliest possible date of adoption: February 3, 2008
For further information, please call: (512) 463-2886