Texas Residential Construction Commission: Is the End in Sight?

For the last several years, the Texas Residential Construction Commission ("TRCC") has been the topic of plenty of commentary and opinions (both positive and negative) in the residential construction industry. But all that discussion may become moot in the near future.

The legislation that created the TRCC also stated that, unless continued through further legislation, the TRCC would automatically be abolished as of September 1, 2009. As a result, the Texas Sunset Advisory Commission (an agency created to identify and eliminate waste, duplication, and inefficiency in government) reviewed the TRCC to determine whether it should be continued.

In January 2009, the Sunset Commission issued its report and recommended that the Texas Residential Construction Commission be abolished and the Texas Residential Construction Commission Act be repealed. According to the report, the TRCC was never completely effective at any of its purposes.

During the current legislative session, State Representative Todd Smith of Tarrant County proposed legislation that took the demise of the TRCC a step further. On February 23, 2009, Representative Smith introduced HB 1635, a bill that would abolish the Texas Residential Construction Commission as of February 10, 2010 (if enacted). You can see the bill, as introduced, here.

This legislation would also exempt from liability a builder hired by a lender to complete the construction of a foreclosed home. This exemption would apply to construction defects of which the builder had no knowledge that existed prior to the acquisition of the home by the lender. The builder would, however, still be liable for work performed for the lender after the acquisition of the home by the lender.

Of course, HB1635 is in its infancy and it remains to be seen what, if any changes are made, whether it will gain enough votes to pass, and whether the governor will sign it into law. It also remains to be seen if another representative or senator will propose legislation that would attempt to continue the existence of the TRCC. In any event, this is definitely something to watch, as the fate of the Texas Residential Construction Commission will have a significant impact on everyone in the residential construction industry.