By Duncan H.B. No. 1395
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to residential construction liability.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 27.001(2), Property Code, is amended to
1-5 read as follows:
1-6 (2) "Construction defect" means a matter concerning
1-7 the design, construction, or repair of a new residence, of an
1-8 alteration of or addition to an existing residence, or of an
1-9 appurtenance to a residence, on which a person has a complaint
1-10 against a contractor. The term "construction defect" may include
1-11 any physical damage to the residence, <or> any appurtenance, or the
1-12 real property on which the residence and appurtenance are affixed
1-13 proximately caused by a construction defect.
1-14 SECTION 2. Section 27.001, Property Code, is amended by
1-15 adding Subdivision (5) to read as follows:
1-16 (5) "Structural failure" means actual physical damage
1-17 to the load-bearing portion of a residence caused by a failure of
1-18 the load-bearing portion.
1-19 SECTION 3. Section 27.002, Property Code, is amended to read
1-20 as follows:
1-21 Sec. 27.002. Application of Chapter. (a) This chapter
1-22 applies to any action to recover damages resulting from a
1-23 construction defect, except a claim <an action> for personal
2-1 injury, survival, or wrongful death or for damage to goods. To the
2-2 extent of conflict between this chapter and any other law,
2-3 including the Deceptive Trade Practices-Consumer Protection Act
2-4 (Subchapter E, Chapter 17, Business & Commerce Code), this chapter
2-5 prevails.
2-6 (b) In this section:
2-7 (1) "Goods" does not include a residence.
2-8 (2) "Personal injury" does not include mental anguish.
2-9 SECTION 4. Section 27.003, Property Code, is amended to read
2-10 as follows:
2-11 Sec. 27.003. Liability. (a) In an action to recover
2-12 damages resulting from a construction defect, a contractor is not
2-13 liable for <damages, or> any percentage of damages<,> caused by:
2-14 (1) negligence of a person other than the contractor
2-15 or an agent, employee, or subcontractor of the contractor;
2-16 (2) failure of a person other than the contractor or
2-17 an agent, employee, or subcontractor of the contractor to:
2-18 (A) take reasonable action to mitigate the
2-19 damages; or
2-20 (B) take reasonable action to maintain the
2-21 residence;
2-22 (3) normal wear, tear, or deterioration; <or>
2-23 (4) normal shrinkage due to drying or settlement of
2-24 construction components within the tolerance of building standards;
2-25 or
3-1 (5) the contractor's reliance on written information
3-2 relating to the residence, appurtenance, or real property on which
3-3 the residence and appurtenance are affixed that was obtained from
3-4 official government records, if the written information was false
3-5 or inaccurate and the contractor did not know and could not
3-6 reasonably have known of the falsity or inaccuracy of the
3-7 information.
3-8 (b) Except as provided herein, this chapter does not limit
3-9 or bar any other defense or defensive matter or other defensive
3-10 cause of action applicable to an action to recover damages
3-11 resulting from a construction defect.
3-12 SECTION 5. Section 27.004, Property Code, is amended to read
3-13 as follows:
3-14 Sec. 27.004. NOTICE AND OFFER OF SETTLEMENT. (a) Before
3-15 the 60th day preceding the date a claimant seeking from a
3-16 contractor damages arising from a construction defect files suit,
3-17 the claimant shall give written notice by certified mail, return
3-18 receipt requested, to the contractor, at the contractor's last
3-19 known address, specifying in reasonable detail the construction
3-20 defects that are the subject of the complaint. During the 35-day
3-21 <21-day> period after the date the contractor receives the notice,
3-22 and on the contractor's written request, the contractor shall be
3-23 given a reasonable opportunity to inspect and have inspected the
3-24 property that is the subject of the complaint to determine the
3-25 nature and cause of the defect and the nature and extent of repairs
4-1 necessary to remedy the defect. The contractor may take reasonable
4-2 steps to document the defect.
4-3 (b) Within the 45-day <31-day> period after the date the
4-4 contractor receives the notice, the contractor may make a written
4-5 offer of settlement to the claimant. The offer may include either
4-6 an agreement by the contractor to repair or to have repaired by an
4-7 independent contractor at the contractor's expense any construction
4-8 defect described in the notice and shall describe in reasonable
4-9 detail the kind of repairs which will be made. The repairs shall
4-10 be made within the 45-day period after the date the contractor
4-11 receives written notice of acceptance of the settlement offer,
4-12 unless completion is delayed by the claimant or by other events
4-13 beyond the control of the contractor. For the purposes of this
4-14 section, "independent contractor" means a person who is independent
4-15 of the contractor and did not perform any of the work complained of
4-16 in the claimant's notice. The claimant and the contractor may
4-17 agree in writing to extend the periods described by this
4-18 subsection.
4-19 (c) If the giving of the notice under Subsections (a) and
4-20 (b) within the period prescribed by those subsections is
4-21 impracticable because of the necessity of filing suit at an earlier
4-22 date to prevent expiration of the statute of limitations or if the
4-23 complaint is asserted as a counterclaim, that notice is not
4-24 required. However, the suit or counterclaim shall specify in
4-25 reasonable detail each construction defect that is the subject of
5-1 the complaint, and the inspection provided for by Subsection (a)
5-2 may be made during the 60-day <21-day> period following the date of
5-3 service of the suit or counterclaim on the contractor, and the
5-4 offer provided for by Subsection (b) may be made within the 60-day
5-5 <31-day> period following the date of service. If, while a suit
5-6 subject to this chapter is pending, the statute of limitations for
5-7 the cause of action would have expired and it is determined that
5-8 the provisions of Subsection (a) were not properly followed, the
5-9 suit shall be abated for up to 75 days in order to allow compliance
5-10 with Subsections (a) and<,> (b)<, and (f)>.
5-11 (d) If a claimant unreasonably rejects an offer made as
5-12 provided by this section or does not permit the contractor or
5-13 independent contractor a reasonable opportunity to repair the
5-14 defect pursuant to an accepted offer of settlement, the claimant
5-15 may not recover an amount in excess of the reasonable cost of the
5-16 repairs which are necessary to cure the construction defect and
5-17 which are the responsibility of the contractor and may recover only
5-18 the amount of reasonable and necessary attorney's fees and costs
5-19 incurred before the offer was rejected or considered rejected.
5-20 (e) If <a claimant reasonably rejects an offer,> a
5-21 contractor fails to make a reasonable <an> offer under this
5-22 section, or <a contractor> fails to make a reasonable attempt to
5-23 complete the repairs specified in an accepted offer made under this
5-24 section, or fails to complete, <repair the defects within the time
5-25 allowed by this section> in a good and workmanlike manner, the
6-1 repairs specified in an accepted offer made under this section, the
6-2 limitations on damages and defenses to liability provided for in
6-3 this section shall not apply.
6-4 (f) Except as provided by Subsection (d), in a suit subject
6-5 to this chapter the claimant may recover only the following damages
6-6 proximately caused by a construction defect:
6-7 (1) the reasonable cost of repairs necessary to cure
6-8 any construction defect that the contractor failed to cure;
6-9 (2) the reasonable expenses of temporary housing
6-10 reasonably necessary during the repair period;
6-11 (3) the reduction in market value, if any, to the
6-12 extent the reduction is due to structural failure; and
6-13 (4) reasonable and necessary attorney's fees. <If
6-14 suit is filed after a contractor makes repairs as provided by this
6-15 section, the claimant may not be awarded damages arising from the
6-16 construction defect, attorney's fees, or costs unless the trier of
6-17 fact finds that the attempt to repair was not made in good faith
6-18 and did not cure the construction defect described in the notice.>
6-19 (g) The total damages awarded in a suit subject to this
6-20 chapter may not exceed the claimant's purchase price for the
6-21 residence.
6-22 (h) <(g)> An offer of settlement made under this section
6-23 that is not accepted before the 25th day after the date the offer
6-24 is received by the claimant is considered rejected.
6-25 (i) <(h)> An affidavit certifying rejection of a settlement
7-1 offer under this section may be filed with the court. The trier of
7-2 fact shall determine the reasonableness of a rejection of an offer
7-3 of settlement made under this section <The affidavit may not be
7-4 offered into evidence or referred to by a party in the presence of
7-5 the jury on trial of the case>.
7-6 (j) <(i)> A contractor who makes or provides for repairs
7-7 under this section is entitled to take reasonable steps to document
7-8 the repair and to have it inspected.
7-9 (k) <(j)> Notwithstanding Subsections (a), (b), and (c), a
7-10 contractor who receives written notice of a construction defect
7-11 resulting from work performed by the contractor or an agent,
7-12 employee, or subcontractor of the contractor and creating an
7-13 imminent threat to the health or safety of the inhabitants of the
7-14 residence shall take reasonable steps to cure the defect as soon as
7-15 practicable. If the contractor fails to cure the defect in a
7-16 reasonable time, the owner of the residence may have the defect
7-17 cured and may recover from the contractor the reasonable cost of
7-18 the repairs plus attorney's fees and costs in addition to any other
7-19 damages recoverable under any law not inconsistent with the
7-20 provisions of this chapter.
7-21 (l) <(k)> This section does not preclude a contractor from
7-22 making a monetary settlement offer.
7-23 (m) <(l)> The inspection and repair provisions of this
7-24 chapter are in addition to any rights of inspection and settlement
7-25 provided by common law or by another statute, including Section
8-1 17.505, Business & Commerce Code.
8-2 SECTION 6. Chapter 27, Property Code, is amended by adding
8-3 Section 27.006 to read as follows:
8-4 Sec. 27.006. CAUSATION. In an action to recover damages
8-5 resulting from a construction defect, the claimant must prove that
8-6 the damages were proximately caused by the construction defect.
8-7 SECTION 7. The change in law made by this Act applies to an
8-8 action for residential construction liability filed on or after the
8-9 effective date of this Act. An action filed before the effective
8-10 date of this Act is governed by the law in effect at the time of
8-11 filing, and the prior law is continued in effect for that purpose.
8-12 SECTION 8. The importance of this legislation and the
8-13 crowded condition of the calendars in both houses create an
8-14 emergency and an imperative public necessity that the
8-15 constitutional rule requiring bills to be read on three several
8-16 days in each house be suspended, and this rule is hereby suspended,
8-17 and that this Act take effect and be in force from and after its
8-18 passage, and it is so enacted.