A new construction standards law, the Texas Residential Construction Commission Act, will take effect on September 1. The Act should give builders in the state a quicker way to resolve construction disputes.

The comprehensive law establishes the Texas Residential Construction Commission, a nine-member panel appointed by the governor. Parties with disputes with home builders will now file claims with the commission, instead of in court. If a state-approved inspector determines that the home's construction meets the new standards, then the builder can use that finding to make a settlement offer. Buyers who then opt to sue will have the burden of demonstrating that the inspector's determination was wrong.

Builders say they are hoping that the new construction dispute resolution process will lower general liability insurance premiums.

Bob Garrett, a developer from Tyler, Texas, and the Texas Association of Builders' president, said the bill is good for both consumers and builders. By giving builders the opportunity to fix problems first before home buyers can haul them into court, the law's dispute process "drives the customer and builder together instead of forcing them apart."

The grass-roots efforts of Texas association members, Garrett said, were key to getting the bill passed.

At the height of the association's advocacy efforts, more than 1,100 builders rallied at the state capitol in Austin.

In addition to straightening out the process for resolving disputes for construction defects, the new law also:

  • Creates the "Texas Star Builder" program, a marketing and certification tool for builders committed to high standards.
  • Imposes a nominal house registration fee, which is paid after the closing of each new home, to help fund the program.
  • Appoints three task forces for rain harvesting and water recycling, arbitration, and mold.
  • Permits arbitrators who work on construction defect cases to become certified by the commission.
  • Requires arbitration awards filed with the court to also be filed with the Texas Residential Construction Commission.