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A BILL TO BE ENTITLED
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AN ACT
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relating to consumer protection for and remedies available to a |
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homebuyer whose home does not comply with certain warranties; |
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providing an administrative penalty. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Title 16, Property Code, is amended by adding |
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Subtitle G to read as follows: |
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SUBTITLE G. HOMEOWNER REMEDIES |
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CHAPTER 456. NEW HOME BUYERS |
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Sec. 456.001. DEFINITIONS. In this chapter: |
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(1) "Defect" means a construction defect or any other |
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condition that prevents a home from conforming to an applicable |
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warranty. |
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(2) "Homebuyer" means a person who: |
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(A) purchased a home from a builder and is |
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entitled to enforce the terms of the builder's warranty with |
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respect to the home; |
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(B) is a lessor or lessee, other than a |
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sublessee, who purchased or leased the home from the builder; or |
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(C) is a transferee or assignee of a person |
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described by Paragraph (A) or (B) if the transferee or assignee is a |
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resident of this state and entitled to enforce the terms of the |
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builder's warranty. |
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(3) "Serious safety hazard" means a life-threatening |
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malfunction, installation defect, or nonconformity that |
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substantially impedes a person's ability to live in or use a home or |
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that creates a substantial risk of fire, explosion, or exposure to a |
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toxic substance. |
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(4) "Warranty" means the statutory warranties under |
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Chapter 430 and any additional warranty provided by a builder in |
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accordance with Sections 430.006 and 430.007. |
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Sec. 456.002. APPLICABILITY OF CERTAIN OTHER LAW OR |
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CONTRACT PROVISIONS. (a) This chapter supersedes any other law or |
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contract provision that conflicts with this chapter, including the |
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Deceptive Trade Practices-Consumer Protection Act (Subchapter E, |
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Chapter 17, Business & Commerce Code). |
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(b) The remedies provided by this chapter supersede |
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remedies available under Chapter 27 or the Deceptive Trade |
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Practices-Consumer Protection Act (Subchapter E, Chapter 17, |
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Business & Commerce Code). |
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(c) If a dispute to which this chapter applies is also |
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subject to Chapter 426, the homebuyer must comply with Subtitle D |
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before pursuing a remedy under this chapter. |
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(d) Except as provided by this section, this chapter does |
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not limit the rights or remedies otherwise available to a homebuyer |
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under any other law. |
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(e) A contract provision that excludes or modifies the |
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remedies provided by this chapter is prohibited and is void as |
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against public policy unless the exclusion or modification is |
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included in a settlement agreement between a homebuyer and a |
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builder. |
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Sec. 456.003. COMPLAINT. A homebuyer may seek a remedy |
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provided by this chapter by: |
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(1) providing to the builder written notice |
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identifying each defect in the home that is covered by the builder's |
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warranty; and |
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(2) filing a complaint with the commission that |
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includes a copy of the notice provided under Subdivision (1) on or |
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before the 30th day after the date the notice is provided. |
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Sec. 456.004. HEARING. (a) The commission may hold a |
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hearing on any allegation in a complaint that is not privately |
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resolved between the homebuyer and the builder. |
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(b) The contested case provisions of Chapter 2001, |
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Government Code, apply to a hearing conducted under this chapter. |
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Sec. 456.005. TIME FOR FILING COMPLAINT. (a) Except as |
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provided by Subsection (b), a homebuyer must file a complaint under |
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this chapter before the earlier of: |
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(1) the date the applicable warranty period expires; |
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or |
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(2) the 10th anniversary of the closing date. |
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(b) If the dispute is submitted to the state-sponsored |
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inspection and dispute resolution process, a complaint under this |
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chapter must be submitted not later than the 30th day after the date |
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the third-party inspector's recommendation is issued or, if the |
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homebuyer appeals the inspector's recommendation, the 30th day |
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after the date the appeals panel issues a ruling on the appeal. |
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Sec. 456.006. AFFIRMATIVE DEFENSE. In a hearing before the |
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commission under this chapter, a builder may assert as an |
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affirmative defense to an allegation of a defect made in a complaint |
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filed under this chapter that the defect is the result of abuse, |
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neglect, or modifications or alterations of the home made by a |
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person other than the builder. |
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Sec. 456.007. REPAIR REQUIRED. (a) Except as provided by |
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Section 456.009, if a defect exists, the builder shall make the |
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repairs necessary to conform the home to the builder's warranties |
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if: |
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(1) the homebuyer or the homebuyer's designated agent |
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reported the defect to the builder or the builder's agent before the |
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expiration of the applicable time limit under Section 456.005; or |
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(2) a breach of warranty on the home is established. |
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(b) The builder must make the repairs required under |
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Subsection (a) not later than the 120th day after the date the |
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notice of the defect required by Section 456.003 is received by the |
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commission. |
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Sec. 456.008. RETURN OR REPLACEMENT REQUIRED. (a) Except |
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as provided by Section 456.009, if the builder is unable to cure a |
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defect within the period prescribed by Section 456.007(b) and the |
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defect creates a serious safety hazard, substantially impairs the |
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use of the home, or decreases the home's market value by more than |
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five percent, the builder shall at the homebuyer's option: |
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(1) replace the home with a comparable home in the same |
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neighborhood; or |
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(2) accept return of the home from the homebuyer and |
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refund to the homebuyer the full purchase price and any closing |
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costs and reasonable moving costs. |
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(b) The commission may not order a remedy under this section |
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unless the builder has been provided at least the number of days |
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prescribed by Section 456.007(b) to cure the defect that is subject |
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to the remedy provided by this section. The period required by this |
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subsection is extended by the amount of time during which repair |
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services are not available to a homebuyer because of a war, |
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invasion, strike, or fire, flood, or other natural disaster. |
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Sec. 456.009. MOLD CONTAMINATION. (a) Not later than the |
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30th day after the date of a hearing examiner's order of a remedy |
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under this section, the builder shall accept return of the home from |
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the homebuyer and refund to the homebuyer the full purchase price |
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and any closing costs and reasonable moving costs if, in addition to |
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notice of a defect required by Section 456.003, a homebuyer: |
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(1) provides to the contractor and the commission |
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written results of tests that: |
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(A) are conducted by a mold testing laboratory |
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certified for the purposes of this section; and |
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(B) demonstrate proof of unacceptable levels of |
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toxic mold contamination that pose an imminent threat to the |
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health, safety, or welfare of the inhabitants; and |
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(2) establishes that the contamination arises out of |
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the defect. |
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(b) The commission by rule shall designate at least one |
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private organization that certifies mold testing laboratories from |
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whom certification is sufficient for the purposes of this section. |
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Sec. 456.010. REIMBURSEMENT OF EXPENSES. (a) If a builder |
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is ordered to replace a home or refund the purchase price under |
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Section 456.008 or 456.009, the builder shall reimburse the |
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homebuyer for: |
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(1) reasonable incidental costs resulting from the |
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loss of the use of the home because of the defect; and |
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(2) lost wages resulting from time required for |
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appointments with the builder or the builder's representative that |
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are necessary because of the defect. |
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(b) As necessary to promote the public interest, the |
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commission by rule: |
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(1) shall define the incidental costs that are |
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eligible for reimbursement under Subsection (a) and specify other |
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requirements necessary to determine an eligible cost; and |
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(2) may set a maximum amount that is eligible for |
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reimbursement, either by type of eligible cost or by a total for all |
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costs. |
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(c) Refunds shall be made to the homebuyer and primary |
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lienholder, as applicable. |
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Sec. 456.011. OTHER REMEDIES NOT PRECLUDED. This chapter |
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does not prevent a homebuyer from obtaining a remedy available to |
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the homebuyer under a new home warranty that provides remedies in |
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addition to those provided by this chapter. |
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Sec. 456.012. RIGHT TO FILE ACTION. (a) Except as provided |
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by this section, a homebuyer may not seek the remedies provided by |
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this chapter in a civil action unless the homebuyer files a |
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complaint against the builder under this chapter and exhausts the |
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administrative proceedings provided by this chapter. A court shall |
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dismiss an action filed in violation of this section. |
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(b) If the hearing examiner does not issue a proposal for |
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decision and make a recommendation to the commission for a final |
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order on or before the 150th day after the date a complaint is filed |
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under this chapter, the commission shall provide written notice, by |
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certified mail, to the complainant and the builder. |
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(c) The notice must inform the recipient of: |
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(1) the date the period for issuing a final order under |
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this chapter expires; and |
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(2) the complainant's right to file an action under |
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this section. |
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(d) After receiving a notice of the right to file an action |
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under Subsection (b), a complainant may file an action against a |
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builder named in the complaint. The commission's failure to issue a |
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notice of the right to file an action does not affect a |
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complainant's right to bring an action. |
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Sec. 456.013. JUDICIAL REVIEW. A final order of the |
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commission under this chapter: |
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(1) is the final action of the commission under this |
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chapter; and |
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(2) is subject to review only by judicial review as |
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provided by Chapter 2001, Government Code, to the extent that |
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chapter is not inconsistent with this chapter. |
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Sec. 456.014. INITIATION OR REMOVAL OF ACTION. (a) Except |
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as otherwise provided by this chapter, an appeal initiated under |
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this chapter may be removed to the Third Court of Appeals District |
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if any party to the action files a notice of removal with the |
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district court before the trial in the district court begins. |
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(b) An appeal initiated in or removed to the Third Court of |
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Appeals District: |
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(1) must be initiated under Chapter 2001, Government |
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Code, as if initiated in a Travis County district court; and |
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(2) is governed from the time of filing by the Texas |
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Rules of Appellate Procedure. |
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(c) If evidence outside the commission's record is to be |
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admitted in an appeal under Chapter 2001, Government Code, or |
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otherwise, the action: |
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(1) must be initiated in a Travis County district |
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court; or |
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(2) if initiated in the Third Court of Appeals |
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District, is subject to remand to a Travis County district court for |
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proceedings in accordance with instructions from the court of |
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appeals. |
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(d) Citation must be served on the commission and each party |
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of record before the commission. For an appeal initiated in the |
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Third Court of Appeals District, the court shall cause citation to |
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be issued. |
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Sec. 456.015. DILIGENCE REQUIRED. (a) An appellant must |
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pursue an appeal with reasonable diligence. If an appellant fails |
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to prosecute an appeal in the six-month period after the appeal is |
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filed, the court shall presume that the appeal has been abandoned |
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and dismiss the appeal if a motion for dismissal is submitted by the |
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attorney general or another party. |
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(b) An appeal may not be dismissed under this section if the |
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appellant, after receiving notice and an opportunity to be heard, |
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demonstrates good cause for a delay. |
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Sec. 456.016. DISCLOSURE REQUIRED. (a) A builder who is |
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ordered to refund the purchase price of or replace a home under this |
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chapter shall provide to the first retail purchaser of the home |
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after the home was repurchased or replaced by the builder a |
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disclosure statement stating that the home was repurchased or |
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replaced by the builder under this chapter. |
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(b) The disclosure statement must include the toll-free |
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telephone number established by the commission under Section |
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456.018. |
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(c) Before a home repurchased or replaced under this chapter |
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may be sold again, the deed that transfers title to the home must be |
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marked with a clear statement that indicates that the home was |
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repurchased or replaced under this chapter. |
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Sec. 456.017. RESTORATION OF WARRANTY REQUIRED. A builder |
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who sells a home after repurchasing or replacing the home under this |
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chapter must restore the home in a manner that conforms with the |
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limited statutory warranties and building and performance |
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standards. |
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Sec. 456.018. TOLL-FREE TELEPHONE NUMBER. The commission |
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shall establish a toll-free telephone number for providing |
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information to persons who request information about a defect that |
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was the basis for ordering a remedy under this chapter. The |
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commission shall maintain an effective method of providing |
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information to persons who make requests. |
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Sec. 456.019. ANNUAL REPORT. (a) The commission shall |
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publish and make available to the public an annual report relating |
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to homes ordered repurchased or replaced by a builder under this |
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chapter. |
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(b) The report must: |
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(1) list the number of homes by subdivision name, if |
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any; |
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(2) identify the builder; and |
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(3) include a brief description of each defect that |
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was the subject of a remedy provided by this chapter. |
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(c) The commission may charge a reasonable fee to recover |
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the cost of the report. |
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Sec. 456.020. DISCIPLINARY PROCEEDINGS; ADMINISTRATIVE |
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PENALTY. A builder who violates this chapter or a rule or order |
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adopted under this chapter is subject to disciplinary action and an |
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administrative penalty under Chapters 418 and 419. |
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SECTION 2. Subtitle G, Title 16, Property Code, as added by |
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this Act, applies only to the sale of a new home for which the |
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closing date is on or after the effective date of this Act. A sale |
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of a new home for which the closing date was before the effective |
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date of this Act is governed by the law in effect at the time of the |
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sale, and that law is continued in effect for that purpose. |
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SECTION 3. This Act takes effect September 1, 2009. |