Despite the (deserved) drubbing that NPR sometimes gets here for being too closely allied with reactionary causes, it does sometimes provide useful information not widely available through other TradMed sources. This morning I heard a truly shocking report that I wanted to share here in the hope that this community will be able to make a difference.
Here is the bare-bones outline of what I've learned so far:
- The Texas Residential Construction Commission (TRCC) masquerades as a "regulatory" agency, but in fact was lobbied into existence by builders, is headed by and overwhelmingly populated by the building industry, and usually decides contested matters 7-2 or 8-1 in favor of builders.
- Under current sunset provisions, TRCC will die a deserved death on 9/1/2009.
- The state legislature's Sunset Advisory Commission concluded that TRCC
fails to provide meaningful oversight and public protection . . . is fundamentally flawed . . . and does more harm than good.
- Texas builders are currently lobbying like mad in favor of a bill to extend the life of this travesty of an agency.
Much more info, and citations, below the fold.
I. HOW AND WHY TRCC WAS BORN
According to Homeowners of Texas, a consumer advocacy group,
Mr. John Krugh, senior VP and corporate counsel for Bob Perry Homes, drafted the bill that established the Commission and was appointed as its first Chairman.
NPR calls Bob Perry Homes "the most powerful and politically connected homebuilder in Texas." According to Wikipedia, Perry was a contributor to the Swift Boats for Justice group and other 527's, and in recent years was the largest individual political donor in Texas, including $400,000 to the campaign of TX Gov. Rick Perry (no relation).
The Sunset Advisory Commission begins the "Summary" section of its extensive report with the following unsurprising observation:
The Texas Residential Construction Commission was never meant to be a
true regulatory agency with a clear mission of protecting the public.
Even worse, the TRCC replaced predecessor regulatory schemes that DID have as their purpose industry regulation and consumer protection:
By superseding DTPA (Texas Deceptive Trade Practices-Consumer Protection Act of 1973) and RCLA (Residential Construction Liability Act of 1989), the TRCC removed builder accountability and replaced it with regulation of homeowners. Homeowners have been left with limited access to the legal system that should help protect them.
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II. HOW TRCC OPERATES
Maybe all you need to know about the TRCC is what former State Comptroller Carole Keeton Strayhorn said about it in a press release dated 1/23/06(emphasis mine):
My research found no evidence that the Texas Residential Construction Commission has had a favorable impact on the homeowner," Strayhorn said. "If our standard is giving all Texans a fair shake, then this agency falls far short of that goal. Homeowners are disappointed and angry that the costly and bureaucratic Texas Residential Construction Commission process does not get their construction defects fixed. Their only recourse is to go to binding arbitration, as required by most builder contracts, or go to court - precisely the outcome the agency was created to prevent.
"To balance the needs of both the homeowner and the homebuilder, Texas Residential Construction Commission should at least have statutory authority to make builders fix defects confirmed through its process. At the very least, the agency should not shift builder fees to the homeowner, should not allow public members of the commission to have ties to the construction industry and should enforce builder registration laws.
"In fiscal 2005, the agency spent $3.7 million on its operations. That same year, the agency collected $6.6 million from builders and homeowners," Strayhorn said. "As a result, the agency transferred $2.9 million to the general fund, effectively helping balance the general state budget on the backs of homeowners.
"For these reasons, if it were up to me personally, I would blast this Texas Residential Construction Commission builder-protection agency off the bureaucratic books," Strayhorn said.
I lived in Texas back in the days when Carole Keeton Strayhorn was still Carole Keeton Rylander, so my memory may be slightly fuzzy, but I certainly don't recall her being any great friend to progressive causes. So a scathing condemnation like this from her lips carries a lot of cred with me.
But if you don't want to take Republican Strayhorn's word for it, the same deficiencies are echoed in the Sunset Advisory Commission report, the NPR article, and the Homeowners of Texas (HoT) website.
In a nutshell, these sources confirm that TRCC's major accomplishment is to limit aggrieved homeowners' access to redress in the courts by statutorily requiring that before going to court, homeowners must first go through an agency review system that is
*
time-consuming (takes months to get through),
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complicated (which means that many homeowners lose their right to sue at all because they inadvertently fail to comply with all the prerequisite provisions regarding TRCC review),
*
expensive,
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biased in favor of builders, and
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powerless to enforce the few decisions that do favor the homeowners.
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III. CURRENT LEGISLATIVE SITUATION
The NPR article opens with this intriguing comparison:
Imagine hundreds of executives from BP, Shell and Exxon Mobil rallying on the steps of the Capitol in Washington to save the Environmental Protection Agency.
That may be hard to picture, but recently in Texas, 1,000 homebuilders rallied at the state Capitol in an effort to save the agency that theoretically regulates them.
House Bill 2295 would extend the life of TRCC. The bill is currently in committee. The committee has heard testimony from hundreds of witnesses, which overwhelmingly opposed the bill and favored abolishing TRCC. As HoT observed:
All homeowner testimony opposed HB2295 and endorsed abolishing the TRCC. It’s telling that they’d prefer to go through binding arbitration rather than being forced to go through the TRCC’s dispute resolution process first.
While opponents argue that passage of the bill would leave Texas homeowners with no protection, homeowner protection cannot possibly be the motivation of the bill's supporters:
Out of 181 legislators, there are only six who don't take money from the Texas Association of Builders. So when the homebuilders come to Austin to lobby, the most powerful politicians in the state pay their respects.
After a welcome message from the governor, the rallying homebuilders fanned out to the offices of every legislator, bearing small gifts and a message: Save the Texas Residential Construction Commission.
. . . .
"When you're talking about the No. 1 investment asset vehicle that anybody owns, there ought to be some protections there to make sure that people are not being taken advantage of," Gattis says.
Gattis is sponsoring a bill that would abolish the TRCC. But the Texas Association of Builders intends to do everything it can to kill that bill and save its regulatory agency.
If the legislature is actually interested in protecting homeowners, suggests HoT, it can institute a new regulatory scheme that actually has such protection as its goal, rather than extending the life of TRCC.
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If you live in Texas, or are just interested in learning more about this, much more information can be found at any of the websites I cited here, or at the HoT homepage. I hope the information given here is enough to convince you not just to read about this sad state of affairs, but also to contact your state legislators to try to remedy it.