Amend CSHB 1038 as follows:
(1) On page 1, line 6, strike "Subsection (c)" and substitute "Subsections (c) and (d)".
(2) On page 2, strike lines 3 through 9 and substitute the
following:
(c) A provision of a contract described by Section
41.001(b)(3) that requires the parties to submit a dispute arising
under the contract to binding arbitration must:
(1) be conspicuously printed or typed in a size equal
to at least 14-point bold type or the computer equivalent; and
(2) provide a space immediately adjacent to the
provision for the owner's signature to indicate acknowledgment of
notice of the provision.
(d) A provision described by Subsection (c) is not
enforceable against the owner unless the requirements of Subsection
(c) are met and the owner signs the space acknowledging notice of
the provision.
(3) Strike SECTION 20 of the bill and substitute the
following:
SECTION 20. Section 426.003, Property Code, is amended by
amending Subsection (b) to read as follows:
(b) A builder who enters into a contract for the
construction of a new home or an improvement to an existing home in
which the value of the work exceeds $20,000 [transaction governed
by this title, other than the transfer of title of a new home from
the builder to the seller,] shall register the home involved in the
transaction with the commission. The registration must:
(1) include the information required by the commission
by rule;
(2) be accompanied by the fee required by Subsection
(c); and
(3) be delivered to the commission not later than the
15th day after the earlier of:
(A) the date the construction is substantially
completed [of the agreement that describes the transaction between
the homeowner and the builder]; or
(B) the date the new home is occupied, if the
contract is for the construction of a new home [commencement of the
work on the home].
(4) Add the following appropriately numbered SECTIONS and
renumber the SECTIONS of the bill accordingly:
SECTION ____. Section 162.003, Property Code, is amended to
read as follows:
Sec. 162.003. BENEFICIARIES OF TRUST FUNDS. (a) An
artisan, laborer, mechanic, contractor, subcontractor, or
materialman who labors or who furnishes labor or material for the
construction or repair of an improvement on specific real property
in this state is a beneficiary of any trust funds paid or received
in connection with the improvement.
(b) A homeowner, as defined by Section 401.002, is a
beneficiary of trust funds paid in connection with a residential
construction contract governed by Title 16 and held for the purpose
of satisfying the cost of materials and workmanship for labor and
materials provided by persons described by Subsection (a) for the
homeowner under the contract.
SECTION ___. Section 162.006(a), Property Code, is amended
to read as follows:
(a) A contractor who enters into a written contract with a
property owner or homeowner, as defined by Section 401.002, to
construct improvements to [a] residential property [homestead] for
an amount exceeding $5,000 shall deposit the trust funds in a
construction account in a financial institution.
SECTION ____. Subtitle C, Title 16, Property Code, is
amended by adding Chapter 420 to read as follows:
CHAPTER 420. BUILDING CONTRACT PROVISIONS
Sec. 420.001. REQUIRED WRITTEN DISCLOSURE. Before
beginning work on a project to construct a new home or an
improvement to an existing home when the cost of the work exceeds
$10,000, a builder must provide a notice to the homeowner in at
least 14-point bold type that gives the telephone number of the
commission and states:
STATE LAW REQUIRES THAT A PERSON HOLD A CERTIFICATE OF
REGISTRATION FROM THE TEXAS RESIDENTIAL CONSTRUCTION COMMISSION IF
THE PERSON CONTRACTS TO CONSTRUCT A NEW HOME OR IF THE PERSON
CONTRACTS TO CONSTRUCT AN IMPROVEMENT TO AN EXISTING HOME AND THE
TOTAL COST OF THE IMPROVEMENT IS $10,000 OR MORE (INCLUDING LABOR
AND MATERIALS).
BUILDERS ARE REGULATED BY LAWS DESIGNED TO PROTECT THE
PUBLIC. YOU MAY CONTACT THE COMMISSION AT [insert commission's
telephone number] TO FIND OUT WHETHER THE BUILDER HAS A VALID
CERTIFICATE OF REGISTRATION. THE COMMISSION HAS COMPLETE
INFORMATION ON THE HISTORY OF BUILDERS, INCLUDING ANY SUSPENSION,
REVOCATION, COMPLAINT, AND RESOLUTION OF COMPLAINT.
IF YOU HAVE A COMPLAINT AGAINST A BUILDER, YOU MAY CONTACT THE
TOLL-FREE TELEPHONE NUMBER TO OBTAIN A COMPLAINT FORM AND FURTHER
INFORMATION.
IF THE BUILDER FAILED TO COMPLETE THE WORK OR PERFORMED POOR
QUALITY WORK, YOU MAY FILE A COMPLAINT WITH THE COMMISSION BY
CONTACTING THE TOLL-FREE TELEPHONE NUMBER. YOU MUST FILE ALL
COMPLAINTS WITHIN TWO YEARS OF THE DATE THE BUILDER ABANDONED THE
PROJECT OR PERFORMED THE POOR QUALITY WORK.
Sec. 420.002. REQUIRED CONTRACT PROVISIONS. A contract for
the construction of a new home or an improvement to an existing home
when the cost of the work exceeds $10,000 is not enforceable against
a homeowner unless the contract:
(1) contains the builder's name, physical address, and
certificate of registration number; and
(2) contains the notice required by Section 420.001.
Sec. 420.003. BINDING ARBITRATION CONTRACT PROVISION. (a)
A provision in a contract for the construction of a new home, or the
improvement of an existing home in which the value of the work
exceeds $10,000, that requires the parties to submit a dispute
arising under the contract to binding arbitration must:
(1) be conspicuously printed or typed in a size equal
to at least 14-point bold type or the computer equivalent; and
(2) provide a space immediately adjacent to the
provision for the homeowner's signature to indicate acceptance of
the provision.
(b) A provision described by Subsection (a) is not
enforceable against the homeowner unless the requirements of
Subsection (a) are met and the homeowner signs the space accepting
the provision.