73R6955 LJD-F
By Duncan H.B. No. 1395
Substitute the following for H.B. No. 1395:
By Corte C.S.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 27.002, Property Code, is amended to read
1-15 as follows:
1-16 Sec. 27.002. Application of Chapter. (a) This chapter
1-17 applies to any action to recover damages resulting from a
1-18 construction defect, except a claim <an action> for personal
1-19 injury, survival, or wrongful death or for damage to goods. To the
1-20 extent of conflict between this chapter and any other law,
1-21 including the Deceptive Trade Practices-Consumer Protection Act
1-22 (Subchapter E, Chapter 17, Business & Commerce Code), this chapter
1-23 prevails.
2-1 (b) In this section:
2-2 (1) "Goods" does not include a residence.
2-3 (2) "Personal injury" does not include mental anguish.
2-4 SECTION 3. Section 27.003, Property Code, is amended to read
2-5 as follows:
2-6 Sec. 27.003. Liability. (a) In an action to recover
2-7 damages resulting from a construction defect, a contractor is not
2-8 liable for damages, or any percentage of damages, caused by:
2-9 (1) negligence of a person other than the contractor
2-10 or an agent, employee, or subcontractor of the contractor;
2-11 (2) failure of a person other than the contractor or
2-12 an agent, employee, or subcontractor of the contractor to:
2-13 (A) take reasonable action to mitigate the
2-14 damages; or
2-15 (B) maintain the residence;
2-16 (3) normal wear, tear, or deterioration; <or>
2-17 (4) normal shrinkage due to drying or settlement of
2-18 construction components within the tolerance of building standards;
2-19 or
2-20 (5) the contractor's reliance on written information
2-21 relating to the residence, appurtenance, or real property on which
2-22 the residence and appurtenance are affixed that was obtained from
2-23 official government records, if the written information was false
2-24 or inaccurate and the contractor did not know and could not
2-25 reasonably have known of the falsity or inaccuracy of the
3-1 information.
3-2 (b) Except as provided herein, this chapter does not limit
3-3 or bar any other defense or defensive matter or other defensive
3-4 cause of action applicable to an action to recover damages
3-5 resulting from a construction defect.
3-6 SECTION 4. Section 27.004, Property Code, is amended by
3-7 amending Subsections (a)-(c) and (e) and adding Subsection (m) to
3-8 read as follows:
3-9 (a) Before the 60th day preceding the date a claimant
3-10 seeking from a contractor damages arising from a construction
3-11 defect files suit, the claimant shall give written notice to the
3-12 contractor, at the contractor's last known address, specifying in
3-13 reasonable detail the construction defects that are the subject of
3-14 the complaint and that the claimant intends to file suit. During
3-15 the <21-day> period between <after> the date the contractor
3-16 receives the notice and the date on which the claimant is entitled
3-17 to file suit, the contractor shall be given a reasonable
3-18 opportunity to inspect and have inspected the property that is the
3-19 subject of the complaint to determine the nature and cause of the
3-20 defect and the nature and extent of repairs necessary to remedy the
3-21 defect. The contractor may take reasonable steps to document the
3-22 defect.
3-23 (b) Within the <31-day> period between <after> the date the
3-24 contractor receives the notice and the date on which the claimant
3-25 is entitled to file suit, the contractor may make a written offer
4-1 of settlement to the claimant. The offer may include an agreement
4-2 by the contractor to repair or have repaired by an independent
4-3 contractor at the contractor's expense any construction defect
4-4 described in the notice and shall describe in reasonable detail the
4-5 kind of repairs which will be made. The repairs shall be made
4-6 within the 45-day period after the date the contractor receives
4-7 written notice of acceptance of the settlement offer, unless
4-8 completion is delayed by the claimant or by other events beyond the
4-9 control of the contractor. For the purposes of this section,
4-10 "independent contractor" means a person who is independent of the
4-11 contractor and did not perform any of the work complained of in the
4-12 claimant's notice.
4-13 (c) If the giving of the notice under Subsections (a) and
4-14 (b) within the period prescribed by those subsections is
4-15 impracticable because of the necessity of filing suit at an earlier
4-16 date to prevent expiration of the statute of limitations or if the
4-17 complaint is asserted as a counterclaim, that notice is not
4-18 required. However, the suit or counterclaim shall specify in
4-19 reasonable detail each construction defect that is the subject of
4-20 the complaint, and the inspection provided for by Subsection (a)
4-21 may be made during the 60-day <21-day> period following the date of
4-22 service of the suit or counterclaim on the contractor, and the
4-23 offer provided for by Subsection (b) may be made within the 60-day
4-24 <31-day> period following the date of service. If, while a suit
4-25 subject to this chapter is pending, the statute of limitations for
5-1 the cause of action would have expired and it is determined that
5-2 the provisions of Subsection (a) were not properly followed, the
5-3 suit shall be abated for up to 75 days in order to allow compliance
5-4 with Subsections (a), (b), and (f).
5-5 (e) If a claimant reasonably rejects an offer, a contractor
5-6 fails to make an offer under this section, or a contractor fails to
5-7 repair the defects within the time allowed by this section in a
5-8 good and workmanlike manner, the limitations on damages and
5-9 defenses to liability provided for in this chapter <section> shall
5-10 not apply.
5-11 (m) It is presumed to be unreasonable to reject an offer to
5-12 repair made under this section solely because the repairs are to be
5-13 made by the contractor rather than an independent contractor. The
5-14 court shall determine the reasonableness of a rejection of an offer
5-15 of settlement made under this section.
5-16 SECTION 5. Chapter 27, Property Code, is amended by adding
5-17 Section 27.006 to read as follows:
5-18 Sec. 27.006. CAUSATION. In an action to recover damages
5-19 resulting from a construction defect, the claimant must prove that
5-20 the damages were proximately caused by the construction defect.
5-21 SECTION 6. The change in law made by this Act applies to an
5-22 action for residential construction liability filed on or after the
5-23 effective date of this Act. An action filed before the effective
5-24 date of this Act is governed by the law in effect at the time of
5-25 filing, and the prior law is continued in effect for that purpose.
6-1 SECTION 7. The importance of this legislation and the
6-2 crowded condition of the calendars in both houses create an
6-3 emergency and an imperative public necessity that the
6-4 constitutional rule requiring bills to be read on three several
6-5 days in each house be suspended, and this rule is hereby suspended,
6-6 and that this Act take effect and be in force from and after its
6-7 passage, and it is so enacted.