Abolishment of the TRCC

[cgallagher]

The Texas Residential Construction Commission is now gone. It's being praised as a victory for homeowners.

http://www.texaswatch.org/tw/index.cfm?eve...ssreleaserecent

The creation of the TRCC wasn't perfect, and many people were not happy with the arbitration process. But now a homeowners only recourse is through lengthly and expensive litigation. The real winners are the lawyers, who were largely behind the push to end the TRCC.

The TRCC preformed background checks on anyone who wanted to become a builder. They also kept records of complaints online that people could access when researching builders or remodelers. Last year they established rules that mandated 3rd party inspections in unincorporated areas. So now there is no regulation and any Joe Blow can go around building homes.

The Commision expires next year.

[RedScare]

Any Joe Blow was already building homes. Sorry, but TRCC was a lapdog for the builders. There is no redeeming value to it. At least the lawyer will be working for the homeowner. Reinstating a homeowner's constitutional right to a jury trial is hardly a bad thing for homeowners.

[TheNiche]

Any Joe Blow was already building homes. Sorry, but TRCC was a lapdog for the builders. There is no redeeming value to it. At least the lawyer will be working for the homeowner. Reinstating a homeowner's constitutional right to a jury trial is hardly a bad thing for homeowners.

The cow goes..."moo". The pig goes..."oink". The lawyer goes..."I bill hourly."

^Sorry, couldn't help it. Not sure whether I mean it or not. Both perspectives on the matter pass the sniff test.

[crunchtastic]

So now there is no regulation and any Joe Blow can go around building homes.

The Commision expires next year.

The market and the mortgage meltdown is taking care of Joe Blow crappy builder.

The TRCC should never have existed to begin with. If the builders didn't give the trial lawyers all that sweet stuff to litigate, they wouldn't have a problem. Regulation? Since when is forced arbitration considered regulation?

[cgallagher]

The market and the mortgage meltdown is taking care of Joe Blow crappy builder.

The TRCC should never have existed to begin with. If the builders didn't give the trial lawyers all that sweet stuff to litigate, they wouldn't have a problem. Regulation? Since when is forced arbitration considered regulation?

Joe Blow is gone for now. But he'll return when the market does. And now there is no agency that will screen for those that have done bad in the past.

The TRCC performed 2 tasks. One was to arbitrate disputes, the other to impose quality standards. The arbitration of disputes was underperforming. And that is why most called for it's abolishment. However, every year it was creating new tougher standards that builders had to follow and was moving towards licensing. But now those standards will be gone.

In the municipal districts where cities inspect building projects, the TRCC won't be missed. But in the county suburbs where construction is completely unregulated, homebuyers have almost no protection. There will be no mandated inspections and no background checks. The TRCC required all builders to register their homes and kept all complaints public record, so that a homebuyer could research their builder before they buy. Good builders liked it because it kept out competition that had no interest in quality.

Litigation would be ideal if the cost to litigate wasn't higher than 95% of home repairs. Homeowners are going to have to make a choice whether or not they want to pay $500 to fix a roof leak, or $2000 to take a builder to court. And when that occaisional large class action lawsuit comes around, all the builder has to do is declare bankruptcy. Most builders have no asssets.

The system wasn't perfect, but it probably could have been fixed. It was established at the peak of the building boom and had a tough time keeping up with the demands of the market. The lawyers were really the ones who set up congressional lobbies and anti TRCC websites. But the truth is this is all about money for them. I think the homeowner loses.

[Gooch]

Does this mean the inspection requirements in unicorporated areas is no mas?

[TheNiche]

Does this mean the inspection requirements in unicorporated areas is no mas?

From the press release:

The Texas Residential Construction Commission (TRCC) will cease to exist on February 1, 2010.

So inspection requirements are still in effect, just not for long.

[gwilson]

TRCC never stopped any Joe Blow builders anyway. A guy I used to work with, and with him I've been accused of being on collusion with, has ripped off numerous customers and when one company went belly-up, he just started another and moved on with it. All you need is someone willing to put their name as the agent too if you manage to get yourself black-listed.

It seemed, honestly, to be more of a revenue generation scheme than anything else. Guess I can save myself a few hundred bucks this year re-upping.

[cgallagher]

TRCC never stopped any Joe Blow builders anyway. A guy I used to work with, and with him I've been accused of being on collusion with, has ripped off numerous customers and when one company went belly-up, he just started another and moved on with it. All you need is someone willing to put their name as the agent too if you manage to get yourself black-listed.

It seemed, honestly, to be more of a revenue generation scheme than anything else. Guess I can save myself a few hundred bucks this year re-upping.

I think one of the problems that the agency faced was that many people did not know how to use the system. In your example, they could have gone to the TRCC website, typed in the last name of the person you speak of and seen complaints from homeowners under the builders previous name. They could have also seen that this guys current company had no registered homes and that would have sent up a red flag.

[TheNiche]

I think one of the problems that the agency faced was that many people did not know how to use the system. In your example, they could have gone to the TRCC website, typed in the last name of the person you speak of and seen complaints from homeowners under the builders previous name. They could have also seen that this guys current company had no registered homes and that would have sent up a red flag.

Would they also have been able to see the guy's previous companies and all the complaints? I'll grant you that a new company is a red flag from the consumer's standpoint, but is it really good public policy to discourage start-up companies and entrepreneurship?

[cgallagher]

Would they also have been able to see the guy's previous companies and all the complaints?

Anything under his name would have shown up.

I'll grant you that a new company is a red flag from the consumer's standpoint, but is it really good public policy to discourage start-up companies and entrepreneurship?

Of course not. It doesn't necessarily discourage start ups. People break from there employers all the time and start up great companies. But at least the information is out there for homeowners to see. People shouldn't make up lies about how long they've been in business.

[cottonmather0]

Why did they have to scrap the whole thing? I think there were a lot of good parts here: warranties, communication with homeowners, inspection standards. Yes, the complaint process was a big scam on the part of the builders' associations (Red's "lapdog" comment is spot on), but that doesn't mean you abolish the whole thing and throw the baby out with the bathwater. Why not just reform the mandatory arbitration requirement and keep everything else? Is there something that I'm missing?

[Marksmu]

Why did they have to scrap the whole thing? I think there were a lot of good parts here: warranties, communication with homeowners, inspection standards. Yes, the complaint process was a big scam on the part of the builders' associations (Red's "lapdog" comment is spot on), but that doesn't mean you abolish the whole thing and throw the baby out with the bathwater. Why not just reform the mandatory arbitration requirement and keep everything else? Is there something that I'm missing?

I have dealt with and completed 100% of the TRCC inspection process with our new home....I consider myself pretty much an expert on the subject after 2+ years of dealing with it....I will say that there were times I hated it, but in the end if you have a builder who actually wants to stay in business and continue to use their name the TRCC helped because they could tarnish the builders name. However tarnish was all they could do. As it was the TRCC could not require a builder to do anything; and that was a BIG problem. For us it didnt hurt that we are a two attorney family and we signed every letter as attorneys - it let the builder know if the TRCC SIRP process didnt work that we would handle it ourselves

There were many problems with the system though. For one, if your repair was cosmetic, and was not going to be expensive, you were MUCH better off fixing it yourself, and bad mouthing your builder to everyone else. The TRCC was not capable of fixing any minor or cosmetic problems. The process is too long, too slow, and too drawn out to be of any use at all in this type of situation. The amount of paper work, and patience required was incredible. On the other hand, if you were willing to go through it all - they would get it fixed, if as I said your builder wanted to stay in business.

If your damage was substantial - the TRCC just got in the way. It was a huge road block preventing the homeowner from getting to court. The process was legislated to take 3 years MINIMUM to get to court if you got the right to sue letter becuase you did everything required. Furthermore, most of the "warranties' provided under the contract end up with you unknowingly signing a confidential binding arbitration agreement which usually mandate the AAA as the arbitration group. The AAA - is setup to really set the homeowner back. The upfront costs were rediculous, usually 20% of the amount in dispute PLUS hourly fees for the arbitrating attorney....if your home was say $500,000 and the repair was estimated at $100,000, the homeowner and the builder would each end up fronting $10,000 plus fees just to be heard. Then, and only then would the buidler be "required" to do anything, and usually all they did if they lost was file bankruptcy and start a new company.

As for the warranty process I had my complaints. 1) its VERY SLOW - the process from reporting the problem, not getting it fixed, documenting the problem, filing the complaint, getting the inspection, and then finally getting the report took us 11.5 months. The repairs took 5 weeks. However, its not all bad - the inspector was truely independent, and mine was quite good.

In the end my builder actually wanted to stay in business - they moved us out, the fixed our house to the specifications of a PE's report that I chose and they paid for, and they paid for all our expenses. I would say my builder did a great job eventually fixing the problems - the complaint here again is that it took us 2+ years to get it all resolved.

Im not sad to see the TRCC go, but they could and probably should have saved parts of it.

[RCH99]

Furthermore, most of the "warranties' provided under the contract end up with you unknowingly signing a confidential binding arbitration agreement which usually mandate the AAA as the arbitration group.

Any chance that you could clarify what you meant by this? It has become relatively difficult to purchase anything of significance today without having an binding arbitration agreement as part of the contract. In that you stated you are a two attorney family, I'm curious about the "unknowingly signing a confidential binding arbitration" part...

Maybe I'm simply misunderstanding what you meant, but, if you, an attorney, felt that you signed something that wasn't what it seemed to be, where does that leave the rest of us that choke on legalese?

I'm not trying to be antagonistic, I really want to understand how this happened.

[Marksmu]

Any chance that you could clarify what you meant by this? It has become relatively difficult to purchase anything of significance today without having an binding arbitration agreement as part of the contract. In that you stated you are a two attorney family, I'm curious about the "unknowingly signing a confidential binding arbitration" part...

Maybe I'm simply misunderstanding what you meant, but, if you, an attorney, felt that you signed something that wasn't what it seemed to be, where does that leave the rest of us that choke on legalese?

I'm not trying to be antagonistic, I really want to understand how this happened.

For one, We should have caught it and read it more thoroughly - certainly our fault - but nonetheless it was well hidden. The Binding arbitration agreement came into play not in the Earnest Money Contract (bc we crossed it out) not in the closing papers (bc we crossed it out) but it actually came from a single piece of paper that acknowledged that we were told about the ACES home warranty that accompanied the home. The paper was simply a form that stated this home comes with a 10 year limited warranty - by signing below you acknowledge receipt of the warranty packet, etc....

It was not until you actually read the warranty packet that you realize the third party warranty, ACES in our case, is where the binding arbitration comes from. The third party warranty companies are all joke - they do not provide a warranty at all - they merely provided a person to call to complain "an intermediary". If you read it, all the third party warranty does is make you do more work to get something fixed and then they require binding arbitration if the builder doesnt do it. The third party company cannot make the builder do anything at all, and they are not actually warranting anything - its a very well covered up scheme to get the homebuyer to sign the binding arbitration clause, by pretending that they are offering some kind of a service to you. If I were purchasing a new home again, I would opt out of the warranty all together and just roll the dice with state mandated minimum warranty. I wonder if the minimum warranties are being tossed out with the TRCC? It would be nice to get the DTPA back into a home purchase!

I was a first time homebuyer - and even though its not an excuse for not reading 100% of everything - the arbitration clause was placed in the back of the packet under the how to get things repaired area...I did feel it was dishonest....lesson learned for sure.

I will say in my defense- in getting our builder to agree to make the repairs I slipped in paragraph in our repair contract that removed the binding arbitration clause if we had a disagreement, and then tossed in an entire agreement clause that negated the whole ACES warranty that we had earlier signed....I felt good when I did it - luckily my builder repaired everything, and we didnt have to use it...but I still felt good about getting it out of there.

[johncoby]

That was the talking points of the builders and their lobbyist. And they were wrong. Pulled a fast one on everyone. And alot of people got hurt because of it.

The TRCC never prevented the need for legal counsel. In fact it REQUIRED it! So how did that possibly help the homeowners?

The Texas Residential Construction Commission is now gone. It's being praised as a victory for homeowners.

http://www.texaswatch.org/tw/index.cfm?eve...ssreleaserecent

The creation of the TRCC wasn't perfect, and many people were not happy with the arbitration process. But now a homeowners only recourse is through lengthly and expensive litigation. The real winners are the lawyers, who were largely behind the push to end the TRCC.

The TRCC preformed background checks on anyone who wanted to become a builder. They also kept records of complaints online that people could access when researching builders or remodelers. Last year they established rules that mandated 3rd party inspections in unincorporated areas. So now there is no regulation and any Joe Blow can go around building homes.

The Commision expires next year.

[johncoby]

The cow goes..."moo". The pig goes..."oink". The lawyer goes..."I bill hourly."

^Sorry, couldn't help it. Not sure whether I mean it or not. Both perspectives on the matter pass the sniff test.

Sorry, but the attorneys in the state had nothing to do with the TRCCs abolishment. Sorry to bust your bubble.

[johncoby]

Joe Blow is gone for now. But he'll return when the market does. And now there is no agency that will screen for those that have done bad in the past.

The TRCC performed 2 tasks. One was to arbitrate disputes, the other to impose quality standards. The arbitration of disputes was underperforming. And that is why most called for it's abolishment. However, every year it was creating new tougher standards that builders had to follow and was moving towards licensing. But now those standards will be gone.

In the municipal districts where cities inspect building projects, the TRCC won't be missed. But in the county suburbs where construction is completely unregulated, homebuyers have almost no protection. There will be no mandated inspections and no background checks. The TRCC required all builders to register their homes and kept all complaints public record, so that a homebuyer could research their builder before they buy. Good builders liked it because it kept out competition that had no interest in quality.

Litigation would be ideal if the cost to litigate wasn't higher than 95% of home repairs. Homeowners are going to have to make a choice whether or not they want to pay $500 to fix a roof leak, or $2000 to take a builder to court. And when that occaisional large class action lawsuit comes around, all the builder has to do is declare bankruptcy. Most builders have no asssets.

The system wasn't perfect, but it probably could have been fixed. It was established at the peak of the building boom and had a tough time keeping up with the demands of the market. The lawyers were really the ones who set up congressional lobbies and anti TRCC websites. But the truth is this is all about money for them. I think the homeowner loses.

wow! Almost everything you said was incorrect. In fact, everything you said IS not correct. Where did you get this information? Really. Ive read the bill that created this commission the day it was filed. Ive read it many many times and it DOES NOT do what you say above.

Are you speculating or reading the builders press releases? Seriously. This is all wrong.

[johncoby]

Any chance that you could clarify what you meant by this? It has become relatively difficult to purchase anything of significance today without having an binding arbitration agreement as part of the contract. In that you stated you are a two attorney family, I'm curious about the "unknowingly signing a confidential binding arbitration" part...

Maybe I'm simply misunderstanding what you meant, but, if you, an attorney, felt that you signed something that wasn't what it seemed to be, where does that leave the rest of us that choke on legalese?

I'm not trying to be antagonistic, I really want to understand how this happened.

Im not an attorney, but I can answer it. The arbitration clause is usually buried in the warranty. When there is a defect the builder throws up his hands and gives it to the warranty company and then you are stuck with the arbitration clause.

You never sign the warranty. It is just provided to you at closing. Who ever thought a warranty would contain an arbitration clause?

[RCH99]

Im not an attorney, but I can answer it.

The gentleman that posted the comment stated he is an attorney. That's why I asked the question. We know that you are not an attorney.

[johncoby]

The gentleman that posted the comment stated he is an attorney. That's why I asked the question. We know that you are not an attorney.

whatever

[cgallagher]

wow! Almost everything you said was incorrect. In fact, everything you said IS not correct. Where did you get this information? Really. Ive read the bill that created this commission the day it was filed. Ive read it many many times and it DOES NOT do what you say above.

Are you speculating or reading the builders press releases? Seriously. This is all wrong.

You can't just say that I'm incorrect. You have to say why I'm incorrect, then provide evidence to support your claim. That is the nature of debate.

[Yankee_in_TX]

I agree it was more harmful than helpful. Mostly because John Q. Public had no idea what TRCC was, let alone to use it.

The binding arbitration was a surprising nightmare for most consumers.

The licensing and complaint system didn't help consumers who didn't know to look up the builder. and it probably gave a false sense of security to those who didn't do proper digging - does your builder have multiple companies? Does he have entities registered that aren't in his name but have related sub entities or common registered agenst with the last name? Etc...

It managed to pretend to regulate builders while greatly limiting consumer rights, IMHO. They need something that truly regulates builders. It needed accountability and teeth.

[Marksmu]

I agree it was more harmful than helpful. Mostly because John Q. Public had no idea what TRCC was, let alone to use it.

The binding arbitration was a surprising nightmare for most consumers.

The licensing and complaint system didn't help consumers who didn't know to look up the builder. and it probably gave a false sense of security to those who didn't do proper digging - does your builder have multiple companies? Does he have entities registered that aren't in his name but have related sub entities or common registered agenst with the last name? Etc...

It managed to pretend to regulate builders while greatly limiting consumer rights, IMHO. They need something that truly regulates builders. It needed accountability and teeth.

Yankee - could not be more spot on....it gave a false sense of security, when in reality it protected the builder from the homeowner, much more than it protected the homeowner from the builder.

It was not all bad, but Im not upset to see it go. The complaints process should be kept, and so should the registration...but much of it was a joke. I honestly believe I could have had my home fixed in a matter of months if I had just sued, as opposed to a matter of years going through the TRCC process.

[plumber2]

Why is it that plumbers, electricians, and HVAC contractors have to have state licenses, but any Joe Blow can become a home builder and not be required to have anything from the state, other than a tax resale certificate? A plumbing contractor must show his state license number and the Texas State Board of Plumbing Examiners contact information on all proposals, estimates and invoices. That way consumers have a direct link to the state to file a complaint, and, all complaints are investigated.

[Yankee_in_TX]

Why is it that plumbers, electricians, and HVAC contractors have to have state licenses, but any Joe Blow can become a home builder and not be required to have anything from the state, other than a tax resale certificate? A plumbing contractor must show his state license number and the Texas State Board of Plumbing Examiners contact information on all proposals, estimates and invoices. That way consumers have a direct link to the state to file a complaint, and, all complaints are investigated.

Again, those do as good as the consumers' knowledge.

I don't know how many news stories or lawsuits I have seen resulting from people hiring unlicensed (fill in the blank contractor type) or those using fake license numbers.

ESPECIALLY after events like Ike.