Home builder lobbyists swarmed the Capitol for weeks, spent millions, and did all they could to save the agency they created. A year-old non-profit consumer group prevailed in the end, however, and the Texas legislature voted to abolish the controversial Texas Residential Construction Commission.

The TRCC was widely criticized for protecting the homebuilding industry more than the public. According to a Sunset Commission staff report, which recommended abolishing this state agency, "The TRCC was never meant to be a true regulatory agency with a clear mission of protecting the public." The report also said it's "fundamentally flawed and does more harm than good."

TRCC: The Ideal Candidate for a Final Sunset

PUBLIC OUTCRY – The people of Texas stated loud and clear that they wanted the Texas Residential Construction Commission (TRCC) abolished. In hearings conducted by the Sunset Advisory Commission last September and before two House Committees in March, not one consumer testified in favor of retaining this agency. In fact, the public registered its preference for abolishing this agency before the Sunset Advisory Commission by a vote of 246 to 14.   

FAIRNESS – The TRCC’s dispute resolution process was grossly unjust for homeowners as documented by a 12% complaint resolution rate for the past 5 years. Two state reports, the Texas Comptroller Report in 2006 and the Sunset Advisory Commission Staff Report in 2008, recommended that it be abolished. The Sunset Staff Report concluded: “The TRCC was never meant to be a true regulatory agency with a clear mission of protecting the public.” The TRCC Sunset Bill, HB 2295, did NOT create a true regulatory agency.

MISLEADING – HB 2295 was 70 pages long and so horribly convoluted, confusing and vague that it was an invitation to litigation and abuse. It failed to provide regulatory oversight of either the homebuilding industry or the TRCC itself. It failed to ensure the competence of builders in Texas through REAL licensing designed to prevent unqualified persons from entering the field. It failed to require performance bonds to protect homeowners. And it failed to fulfill the stated promise of the bill’s author.

THE PROMISE – Rep. Ruth McClendon, the author of HB 2295, stated in the January/February 2009 issue of Texas Builder magazine: “My predictions for the TRCC…would include an opportunity for mediation rather than arbitration, and a choice of whether to follow agency complaint and inspection procedures or to take the matter to court.” Unfortunately this bill created the illusion of homeowner access to voluntary mediation because the homeowner would ONLY entitled to mediation if the builder requested a third party inspection. Sections 426.005 and 426.006 of the Texas Property Code still mandated TRCC compliance with TRCC third party inspection procedures.

CORRECTION – Rep. McClendon’s bill did not reflect her promise. That is why Homeowners of Texas (HOT) endorsed HB 2243 as the vehicle to give Texas homeowners regulatory oversight of the $35B Texas homebuilding industry and direct access to legal remedies. This alternative would have provided REAL licensing of Texas homebuilders by TDLR, an agency prepared to implement this legislation with 100 years of regulatory experience. Licensing by TDLR would have prevented unqualified persons from acting as builders, enhanced the professionalism of the homebuilding industry, improved the quality of new homes built in Texas, and contributed to economic development.

Underdog homeowners group overcomes bully tactics of $35B industry

This HOT press release describes the David v. Goliath story of a non-profit consumer advocacy organization that opposed builder-sponsored legislation that would have extended the TRCC. They portrayed the bill (HB 2295) as very deceptive and harmful to consumers.

HOT was the ONLY group to oppose the TRCC Sunset bill and had to lobby against the Texas Association of Builders and their allies. They also had to battle two other consumer groups that supported the builder legislation early in the legislative process.   

HOT alone proposed many of the key consumer-protection amendments adopted by the House - amendments that the builders wouldn’t accept. The group worked hard to garner the necessary Senate votes to prevent suspension of the rules that would have allowed a Senate floor vote. So instead of passing a Sunset bill to keep the TRCC, the senators agreed to disband the agency.

HOT submitted an alternative bill to (1) abolish the TRCC AND (2) replace builder registration with licensing through the TDLR (Texas Department of Licensing & Regulation). The bill would have helped prevent bad builders from operating, but it never reached a floor vote due to a parliamentary error. 28 states have already followed the approach that HOT proposed, by regulating the homebuilding industry with contractor licensing. HOT says this will again be a top priority next session.