81R10521 UM-D

By: Leibowitz H.B. No. 2896

A BILL TO BE ENTITLED

AN ACT

relating to requiring the Texas Residential Construction Commission to adopt forms to be used by builders for contracts for the sale or construction of a new home.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 420, Property Code, is amended by adding Section 420.004 to read as follows:

Sec. 420.004. STANDARD CONTRACT FORMS. (a) The commission shall adopt rules in the public's best interest that require builders to use contract forms prepared with the assistance of the Texas Real Estate Broker-Lawyer Committee and adopted by the commission for the sale or construction of a new home.

(b) The commission may not prohibit a builder from using a contract form for the sale or construction of a new home that is:

(1) prepared by the purchaser; or

(2) prepared by an attorney and required by the purchaser.

(c) A contract form adopted by the commission must comply with this chapter, except that the commission may not adopt a contract form that includes a provision that requires the parties to submit a dispute arising under the contract to binding arbitration.

SECTION 2. Section 418.001, Property Code, is amended to read as follows:

Sec. 418.001. GROUNDS FOR DISCIPLINARY ACTION. A person, including a builder or a person who is designated as a builder's agent under Section 416.006, or a person who owns or controls a majority ownership interest in the builder is subject to disciplinary action under this chapter for:

(1) fraud or deceit in obtaining a registration or certification under this subtitle;

(2) misappropriation or misapplication of trust funds in the practice of residential construction, including a violation of Chapter 32, Penal Code, or Chapter 162, if found by a final nonappealable court judgment;

(3) naming false consideration in a contract to sell a new home or in a construction contract;

(4) discriminating on the basis of race, color, religion, sex, national origin, or ancestry;

(5) publishing a false or misleading advertisement;

(6) failure to honor, within a reasonable time, a check issued to the commission, or any other instrument of payment, including a credit or debit card or electronic funds transfer, after the commission has sent by certified mail a request for payment to the person's last known business address, according to commission records;

(7) failure to pay an administrative penalty assessed by the commission under Chapter 419 or a fee due under Chapter 426;

(8) failure to pay a final nonappealable court judgment arising from a construction defect or other transaction between the person and a homeowner;

(9) failure to register a home as required by Section 426.003;

(10) failure to remit the fee for registration of a home under Section 426.003;

(11) failure to reimburse a homeowner the amount ordered by the commission as provided by Section 428.004(d);

(12) engaging in statutory or common-law fraud or misappropriation of funds, as determined by the commission after a hearing under Section 418.003;

(13) a repeated failure to participate in the state-sponsored inspection and dispute resolution process if required by this title;

(14) failure to register as a builder as required under Chapter 416;

(15) using or attempting to use a certificate of registration that has expired or that has been revoked;

(16) falsely representing that the person holds a certificate of registration issued under Chapter 416;

(17) acting as a builder using a name other than the name or names disclosed to the commission;

(18) aiding, abetting, or conspiring with a person who does not hold a certificate of registration to evade the provisions of this title or rules adopted under this title, if found by a final nonappealable court judgment;

(19) allowing the person's certificate of registration to be used by another person;

(20) acting as an agent, partner, or associate of a person who does not hold a certificate of registration with the intent to evade the provisions of this title or rules adopted under this title;

(21) a failure to reasonably perform on an accepted offer to repair or a repeated failure to make an offer to repair based on:

(A) the recommendation of a third-party inspector under Section 428.004; or

(B) the final holding of an appeal under Chapter 429;

(22) a repeated failure to respond to a commission request for information;

(23) a failure to obtain a building permit required by a political subdivision before constructing a new home or an improvement to an existing home;

(24) abandoning, without justification, any home improvement contract or new home construction project engaged in or undertaken by the person, if found to have done so by a final, nonappealable court judgment;

(25) a repeated failure to comply with the requirements of Subtitle F; [or]

(26) a failure to use a contract form required by the commission under Section 420.004; or

(27) otherwise violating this title or a commission rule adopted under this title.

SECTION 3. (a) The Texas Residential Construction Commission shall adopt contract forms as required by Section 420.004, Property Code, as added by this Act, as soon as practicable after the effective date of this Act.

(b) Section 418.001, Property Code, as amended by this Act, applies only to the use of a contract form on or after the date on which the commission adopts a contract form in accordance with Section 420.004, Property Code, as added by this Act.

SECTION 4. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2009.