Texas builders may have dodged a bullet when that state’s Sunset Advisory Commission, which evaluates its state government agencies, voted on Tuesday not to abolish the Texas Residential Construction Commission (TRCC). The TRCC had been established at the behest of builders to provide homeowners with a way to resolve construction defect complaints without a lawsuit.

Sunset’s staff earlier had recommended that the five-year-old TRCC be abolished, after analyzing its track record. The TRCC's effectiveness has been loudly criticized by consumer advocates and homeowners. TRCC officials have countered that Sunset’s staff used old data that did not factor in improvements in oversight, manpower, and complaint resolution that happened after a threefold increase in TRCC’s annual budget this fiscal year.

As evidence of its new regulatory muscle, on Dec. 10 TRCC issued its first cease-and-desist order against a local contractor, which was told to shut down its operations and fined $30,000. The builder in question—a “storm chaser” doing business as West Contracting—was not registered with the TRCC, which is required by law. This builder also failed to respond to a homeowner’s complaints about substandard work. “We are going to continue to use this authority to get these storm chasers out of Texas,” said Duane Waddill, TRCC’s executive director, in a prepared statement.

However, what concerns consumer advocates is how the Commission resolves disputes between homeowners and registered builders and developers. A consumer survey TRCC conducted last April found that only 42 percent of homeowners polled thought complaints were handled in a timely manner, and 68 percent didn’t think the resolution process was helpful.

TRCC told BUILDER last month that resolutions of complaints, from the inception of the agency through late August 2008, stood at 31 percent. However, TRCC has been taken to task for how long it can take to resolve defect complaints, which in some cases have dragged on for years.

In its five-year strategic plan, one of TRCC’s goals is to increase the number of complaints it settles in fewer than 120 days to 50 percent next year and to 67.5 percent by 2013. The Sunset Commission has recommended that if the TRCC can't settle a dispute within 105 days, the homeowner should be free to seek other remedies, including arbitration or litigation. (Currently, homeowners must go through the entire TRCC process before they can sue or seek mediation.)

“We are very encouraged and supportive of what the Sunset Commission recommended,” says Scott Norman, executive director of the Texas Association of Builders in Austin. However, Norman also states that the onus is now on TRCC to “get its act together” and resolve disputes within the timeframe the Sunset Commission wants.

Norman is also pleased that Sunset rejected voluntary due process, which would have allowed homeowners to sue a builder over a construction defect without having to go through TRCC’s process. But making the process voluntary is the only real way to hold TRCC’s feet to the fire, insists Alex Winslow, executive director of Texas Watch, an Austin-based consumer advocacy group. “If TRCC is doing its job fairly and efficiently, homeowners are going to prefer going through the agency than to court,” says Winslow.

Next month, when the Texas legislature reconvenes, the Sunset Commission’s recommendations will be rolled into a bill for lawmakers’ consideration. Winslow believes that, as with any pending legislation, “there will be adjustments and changes. We have a long way to go yet.”

John Caulfield is senior editor at BUILDER magazine.

Learn more about markets featured in this article: Austin, TX.