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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 4, Property Code, is amended by adding |
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Chapter 30 to read as follows: |
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CHAPTER 30. TEXAS HOMEBUYER PROTECTION ACT |
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Sec. 30.001. SHORT TITLE. This chapter may be cited as the |
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Texas Homebuyer Protection Act. |
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Sec. 30.002. DEFINITIONS. In this chapter: |
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(1) "Administrator" means the administrator of the |
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Texas Real Estate Commission. |
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(2) "Commission" means the Texas Real Estate |
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Commission. |
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(3) "Contractor" means a person who, for compensation, |
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engages in the construction, remodeling, repair, modification, or |
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improvement of a building or a portion of a building used primarily |
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for residential purposes. |
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(4) "Defect" means a condition that prevents a home |
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from conforming to a contractor's warranty, including a warranty |
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described by Section 30.008(c) or any other warranty provided by |
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law. |
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(5) "Home" means a single-family house, duplex, |
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triplex, or quadruplex or a unit in a multiunit structure used for |
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residential purposes that is used or intended to be used as a |
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dwelling by one of the owners. |
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(6) "Homebuyer" means a person who: |
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(A) purchased a home from a contractor and is |
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entitled to enforce the terms of a contractor'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 a contractor; 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 a |
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contractor's warranty. |
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(7) "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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(8) "Warranty" means an express or implied warranty. |
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Sec. 30.003. APPLICABILITY OF CERTAIN OTHER LAW OR CONTRACT |
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PROVISIONS. (a) This chapter supersedes any other law or contract |
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provision that conflicts with this chapter. |
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(b) The remedies provided by this chapter supersede |
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remedies available under Chapter 27 or Title 16. |
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(c) 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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(d) 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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contractor. |
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Sec. 30.004. COMPLAINT. A homebuyer may seek a remedy |
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provided by this chapter by: |
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(1) providing to the contractor written notice |
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identifying each defect in the home that is covered by the |
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contractor's 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. 30.005. HEARING. (a) The administrator may set 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 contractor. |
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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. 30.006. 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 express warranty period expires; or |
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(2) the 10th anniversary of the closing date. |
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(b) A homebuyer may file a complaint to which Section 30.010 |
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applies on or before the 10th anniversary of the closing date. |
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Sec. 30.007. AFFIRMATIVE DEFENSE. In a hearing before the |
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administrator under this chapter, a contractor 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 contractor. |
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Sec. 30.008. REPAIR REQUIRED. (a) Except as provided by |
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Section 30.010, if a defect exists, the contractor shall make the |
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repairs necessary to conform the home to the contractor's |
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warranties if: |
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(1) the homebuyer or the homebuyer's designated agent |
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reported the defect to the contractor or the contractor's agent |
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before the expiration of the applicable time limit under Section |
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30.006; or |
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(2) a breach of a warranty described by Subsection (c) |
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on the home is established. |
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(b) The contractor 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 30.004 is received by the |
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commission. |
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(c) Notwithstanding any other law, there is a presumption |
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that a breach of a warranty on a home exists if the home does not |
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comply with: |
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(1) a building code applicable to the home; |
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(2) the version applicable in the jurisdiction in |
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which the home is constructed of: |
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(A) the International Building Code for One- and |
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Two-Family Dwellings; |
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(B) the National Electric Code for One- and |
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Two-Family Dwellings; or |
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(C) the manufacturer's specific installation |
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instructions for the part or component used in construction of the |
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home; or |
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(3) structural engineering standards or practices |
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intended to prevent structural damage or a decrease in the market |
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value of the home resulting from the failure of the foundation or |
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other load-bearing portions of the home, including standards or |
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practices used to ensure that a foundation is structurally |
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sufficient without artificial moisture controls or other |
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extraordinary maintenance by the homeowner. |
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Sec. 30.009. RETURN OR REPLACEMENT REQUIRED. (a) Except as |
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provided by Section 30.010, if the contractor is unable to cure a |
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defect within the period prescribed by Section 30.008(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 contractor 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 administrator may not order a remedy under this |
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section unless the contractor has been provided at least the number |
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of days prescribed by Section 30.008(b) to cure the defect that is |
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subject to the remedy provided by this section. The period required |
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by this subsection is extended by the amount of time during which |
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repair 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. 30.010. MOLD CONTAMINATION. (a) Not later than the |
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30th day after the date of the administrator's order of a remedy |
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under this section, the contractor shall accept return of the home |
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from the homebuyer and refund to the homebuyer the full purchase |
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price and any closing costs and moving costs if, in addition to a |
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notice of a defect required by Section 30.004, 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. 30.011. REIMBURSEMENT OF EXPENSES. (a) If a |
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contractor is ordered to replace a home or refund the purchase price |
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under Section 30.009 or 30.010, the contractor 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 contractor or the contractor's |
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representative that 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. 30.012. 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. 30.013. 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 contractor under this chapter and exhausts |
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the administrative proceedings provided by this chapter. A court |
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shall 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 administrator 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 administrator shall provide written notice, |
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by certified mail, to the complainant and the contractor. |
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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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contractor named in the complaint. The administrator's failure to |
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issue a notice of the right to file an action does not affect a |
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complainant's right to bring an action under this section. |
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Sec. 30.014. JUDICIAL REVIEW. A final order of the |
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administrator 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. 30.015. 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 administrator and each |
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party of record before the commission. For an appeal initiated in |
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the Third Court of Appeals District, the court shall cause citation |
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to be issued. |
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Sec. 30.016. 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. 30.017. DISCLOSURE REQUIRED. (a) A contractor that 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 contractor a |
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disclosure statement stating that the home was repurchased or |
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replaced by the contractor 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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30.019. |
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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. 30.018. RESTORATION OF WARRANTY REQUIRED. A |
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contractor who sells a home after repurchasing or replacing the |
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home under this chapter must: |
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(1) restore the home in a manner that conforms with |
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applicable building codes; and |
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(2) issue an express warranty for the home. |
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Sec. 30.019. 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. 30.020. 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 contractor 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 contractor; 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. 30.021. ADMINISTRATIVE PENALTY. (a) The commission |
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may impose an administrative penalty on a person who violates this |
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chapter or a rule or order adopted under this chapter. |
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(b) The imposition of a penalty is governed by Subchapter O, |
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Chapter 1101, Occupations Code. |
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Sec. 30.022. RULES. The commission, in consultation with |
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the Texas Real Estate Inspector Committee, shall adopt rules |
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necessary for the enforcement and administration of this chapter. |
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SECTION 2. (a) This Act takes effect September 1, 2009. |
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(b) This Act applies only to the sale of a new home for which |
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the closing date is on or after September 1, 2009. A sale of a new |
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home for which the closing date was before September 1, 2009, is |
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governed by the law in effect at the time of the sale, and that law |
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is continued in effect for that purpose. |