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. Amend Section 27.001 (4), Property Code, to read
1-5 as follows:
1-6 (4) "Residence" means a single-family house, duplex,
1-7 triplex, or quadruplex or a unit in a multiunit residential
1-8 structure in which title to the individual units is transferred to
1-9 the owners under a condominium or cooperative system and the real
1-10 property upon which the improvements are affixed.
1-11 SECTION 2. Amend Section 27.002, Property Code, to read as
1-12 follows:
1-13 This chapter applies to any action to recover damages,
1-14 including consequential damages, mental anguish and loss of value,
1-15 proximately caused by <resulting from> a construction defect,
1-16 except an action for personal injury, survival, or wrongful death
1-17 or for damage to goods. To the extent of conflict between this
1-18 chapter and any other law, including the Deceptive Trade
1-19 Practices-Consumer Protection Act (Subchapter E, Chapter 17,
1-20 Business & Commerce Code), this chapter prevails.
1-21 SECTION 3. Amend Section 27.003, Property Code, to read as
1-22 follows:
1-23 (a) In an action to recover damages proximately caused by
2-1 <resulting from> a construction defect, a contractor is not liable
2-2 for damages, or an percentage of damages, caused by:
2-3 (1) negligence of a person other than the contractor
2-4 or an agent, employee, or subcontractor of the contractor;
2-5 (2) failure of a person other than the contractor or
2-6 an agent, employee, or subcontractor of the contractor to take
2-7 reasonable action to mitigate the damages or failure to maintain
2-8 the residence;
2-9 (3) normal wear, tear, <or> deterioration or failure
2-10 to maintain the residence; <or>
2-11 (4) normal shrinkage due to drying or settlement of
2-12 construction components within the tolerance of building standards;
2-13 or
2-14 (5) written information relating to the residence
2-15 obtained from official government records if the written
2-16 information was false or inaccurate and the contractor did not know
2-17 and could not reasonably have known of the falsity or inaccuracy of
2-18 the information.
2-19 (b) Except as provided herein, this chapter does not limit
2-20 or bar any other defense or defensive matter or other defensive
2-21 cause of action applicable to an action to recover damages
2-22 resulting from a construction defect.
2-23 SECTION 4. Amend Section 27.004, Property Code, to read as
2-24 follows:
2-25 (a) Before the 60th day preceding the date a claimant
3-1 seeking from a contractor damages arising from a construction
3-2 defect files suit, the claimant shall give written notice to the
3-3 contractor, at the contractor's last known address, specifying in
3-4 reasonable detail the construction defects that are the subject of
3-5 the complaint and that the claimant intends to file suit. During
3-6 the 60<21>-day period after the date the contractor receives the
3-7 notice, the contractor shall be given a reasonable opportunity to
3-8 inspect and have inspected the property that is the subject of the
3-9 complaint to determine the nature and cause of the defect and the
3-10 nature and extent of repairs necessary to remedy the defect. The
3-11 contractor may take reasonable steps to document the defect.
3-12 (b) Within the 60<31>-day period after the date the
3-13 contractor receives the notice, the contractor may make a written
3-14 offer of settlement to the claimant. The offer may include an
3-15 agreement by the contractor to repair or have repaired by an
3-16 independent contractor at the contractor's expense any construction
3-17 defect described in the notice and shall describe in reasonable
3-18 detail the kind of repairs which will be made. The repairs shall
3-19 be made within the 45-day period after the date the contractor
3-20 receives written notice of acceptance of the settlement offer,
3-21 unless completion is delayed by the claimant or by other events
3-22 beyond the control of the contractor. For the purposes of this
3-23 section, "independent contractor" means a person who is independent
3-24 of the contractor and did not perform any of the work complained of
3-25 in the claimant's notice.
4-1 (c) If the giving of the notice under Subsections (a) and
4-2 (b) within the period prescribed by those subsections is
4-3 impracticable because of the necessity of filing suit at an earlier
4-4 date to prevent expiration of the statute of limitations or if the
4-5 complaint is asserted as a counterclaim, that notice is not
4-6 required. However, the suit or counterclaim shall specify in
4-7 reasonable detail each construction defect that is the subject of
4-8 the complaint, and the inspection provided for by Subsection (a)
4-9 may be made during the 60<21>-day period following the date of
4-10 service of the suit or counterclaim on the contractor, and the
4-11 offer provided for by Subsection (b) may be made within the
4-12 60<31>-day period following the date of service. If, while a suit
4-13 subject to this chapter is pending, the statute of limitations for
4-14 the cause of action would have expired and it is determined that
4-15 the provisions of Subsection (a) were not properly followed, the
4-16 suit shall be abated for up to 75 days in order to allow compliance
4-17 with Subsections (a), (b), and (f).
4-18 (d) If a claimant unreasonably rejects an offer made as
4-19 provided by this section or does not permit the contractor or
4-20 independent contractor a reasonable opportunity to repair the
4-21 defect pursuant to an accepted offer of settlement, the claimant
4-22 may not recover an amount in excess of the reasonable cost of
4-23 repairs which are necessary to cure the construction defect and
4-24 which are the responsibility of contractor <and may recover only
4-25 the amount of reasonable and necessary attorney's fees and costs
5-1 incurred before the offer was rejected or considered rejected>.
5-2 (e) If a claimant reasonably rejects an offer, a contractor
5-3 fails to make an offer under this section, or a contractor fails to
5-4 repair the defects within the time allowed by this section in a
5-5 good and workmanlike manner, the limitations on damages and
5-6 defenses to liability provided for in this section shall not apply.
5-7 (f) If suit is filed after a contractor makes repairs as
5-8 provided by this section, the claimant may not be awarded damages
5-9 arising from the construction defect, attorney's fees, or costs
5-10 unless trier of fact finds that the attempt to repair was not made
5-11 in good faith and did not cure the construction defect described in
5-12 the notice.
5-13 (g) An offer of settlement made under this section that is
5-14 not accepted before the 25th day after the date the offer is
5-15 received by the claimant is considered rejected.
5-16 (h) An affidavit certifying rejection of a settlement offer
5-17 under this section may be filed with the court. The affidavit may
5-18 not be offered into evidence or referred to by a party in the
5-19 presence of the jury on trial of the case. It shall be
5-20 unreasonable to reject an offer to repair made under this section
5-21 solely because the repairs are to be made by the contractor rather
5-22 than an independent contractor. The court shall determine the
5-23 reasonableness of the rejection of an offer of settlement made
5-24 under this section.
5-25 (i) A contractor who makes or provides for repairs under
6-1 this section is entitled to take reasonable steps to document the
6-2 repair and to have it inspected.
6-3 (j) Notwithstanding Subsections (a), (b), and (c), a
6-4 contractor who receives written notice of a construction defect
6-5 resulting from work performed by the contractor or an agent,
6-6 employee, or subcontractor of the contractor and creating an
6-7 imminent threat to the health and safety of the inhabitants of the
6-8 residence shall take reasonable steps to cure the defect as soon as
6-9 practicable. If the contractor fails to cure the defect in a
6-10 reasonable time, the owner of the residence may have the defect
6-11 cured and may recover from the contractor the reasonable cost of
6-12 the repairs plus attorney's fees and costs in addition to any other
6-13 damages recoverable under any law not inconsistent with the
6-14 provisions of this chapter.
6-15 (k) This section does not preclude a contractor from making
6-16 a monetary settlement offer.
6-17 (l) The inspection and repair provisions of this chapter are
6-18 in addition to any rights of inspection and settlement provided by
6-19 common law or by another statute, including Section 17.505,
6-20 Business & Commerce Code.
6-21 SECTION 5. Amend Chapter 27, Property Code, by adding new
6-22 Section 27.006 as follows:
6-23 Section 27.006. Limitations on Damages.
6-24 In an action to recover damages caused by a construction
6-25 defect the damages awarded to the claimant shall not exceed the
7-1 amount paid by the claimant to purchase the residence which is
7-2 found to have a construction defect.
7-3 SECTION 6. The importance of this legislation and the
7-4 crowded condition of the calendars in both houses create an
7-5 emergency and an imperative public necessity that the
7-6 constitutional rule requiring bills to be read on three several
7-7 days in each house be suspended, and this rule is hereby suspended.