A new bill moving through the Texas House of Representatives would cut in half the amount of time homeowners have to sue developers or builders over construction defects.
House Bill 3595 would amend the Residential Construction Liability Act, cutting the statute of repose — the amount of time homeowners have to sue — from 10 years to five.
"The statute of repose for residential construction has not been addressed in over 30 years," said the bill’s author state Rep. Jim Leach, R-Plano, as he introduced the measure at a hearing of the House Judiciary and Civil Jurisprudence Committee. "Other states that have recently revisited the issues have reduced their statute of repose to somewhere between four and seven years."
Scott Norman of the Texas Association of Builders noted that statutes of repose vary across the nation, ranging from 10 years in some states down to four in others.
Norman told lawmakers the change would make it cheaper to buy a home.
"Lowering the statute of repose is important to us," Norman said. "That affects housing affordability. That tail that a builder or an assigned warranty company or what-have-you has to be on the hook for that home drives up costs. As you know, we are experiencing an extreme housing shortage and rising housing prices."
Adam Aschmann of Houston-based Tilson Home Corporation testified on behalf of the Greater Houston Builders Association, and argued that the bill was necessary to provide relief for builders, requiring homeowners to take greater responsibility for keeping their property in shape.
"The Residential Construction Liability Act is intended to resolve situations and create resolution," Aschmann said. "It requires builders to make a good offer to limit their liability on a claim, and RCLA does this, but the current statute just stretches this responsibility far too long. It takes a homebuilder and puts us in the maintenance business."
But attorney Monica Uribe of the firm Kerrane Storz said the bill would hurt homeowners by giving Texas one of the shortest statutes in the country.
“This section of the bill reveals who this bill is meant to protect – not the millions of Texas homeowners, but rather large corporate developers and builders," Uribe said.
Attorney Sally Metcalfe, speaking on behalf of the Texas Trial Lawyers Association, noted that construction defects rarely reveal themselves in the first five years.
"There are more states in the nation that have a 10-year statute of repose than any other length of time, which is what Texas currently has, and there's a reason,” Metcalfe said. “Many defects in construction take time to reveal themselves and become visible, especially for a homeowner who's not an engineer and has no experience in the construction field," Metcalfe said.
The bulk of the homeowners who testified at the committee hearing sided against the bill, including homeowner Gina Kaye, who said the bill “encourages poor and shoddy construction."
"What I've learned this last year and a half through my own homebuying experience is that builders have a lot of protections in place, but that there are not enough for consumers,” Kaye said.