Bill Text: TX HB3595 | 2021-2022 | 87th Legislature | Introduced
Bill Title: Relating to residential construction liability.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2021-04-06 - Left pending in committee [HB3595 Detail]
Download: Texas-2021-HB3595-Introduced.html
87R7575 AJA-F | ||
By: Leach | H.B. No. 3595 |
|
||
|
||
relating to residential construction liability. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 27.001, Property Code, is amended to | ||
read as follows: | ||
Sec. 27.001. DEFINITIONS. In this chapter: | ||
(1) "Action" means a court or judicial proceeding or | ||
an arbitration. | ||
(2) "Appurtenance" means any garage, outbuilding, | ||
retaining wall, landscaping improvement, or other improvement, | ||
structure, or recreational facility that is constructed by a | ||
contractor in connection with the construction of a new residence, | ||
regardless of whether or not it is attached to or [ |
||
(3) [ |
||
[ |
||
design, construction, or repair of a new residence, of an | ||
alteration of or repair or addition to an existing residence, or of | ||
an appurtenance to a residence, on which a person has a complaint | ||
against a contractor. The term may include any physical damage to | ||
the residence, any appurtenance, or the real property on which the | ||
residence and appurtenance are affixed proximately caused by a | ||
construction defect. | ||
(4) [ |
||
(A) means: | ||
(i) a builder [ |
||
of a new residence, for the repair or alteration of or an addition | ||
to an existing residence, or for the construction, sale, | ||
alteration, addition, or repair of an appurtenance to a new or | ||
existing residence; | ||
(ii) any person contracting [ |
||
constructed by or on behalf of that person; or | ||
(iii) a person contracting with an owner or | ||
the developer of a condominium or other housing project for the | ||
construction of one or more [ |
||
alteration of or an addition to an existing residence, for repair of | ||
a new or existing residence, or for the construction, sale, | ||
alteration, addition, or repair of an appurtenance to a new or | ||
existing residence; and | ||
(B) includes: | ||
(i) an owner, officer, director, | ||
shareholder, partner, or employee of the contractor; and | ||
(ii) a risk retention group registered | ||
under Chapter 2201 [ |
||
all or any part of a contractor's liability for the cost to repair a | ||
residential construction defect. | ||
(5) [ |
||
damages for pecuniary loss proximately caused by a construction | ||
defect. The term does not include exemplary damages, speculative | ||
damages, or damages for bodily or personal injury, physical pain | ||
and mental anguish, loss of consortium, disfigurement, physical | ||
impairment, or loss of companionship and society. | ||
(6) [ |
||
improvements for a single-family house, duplex, triplex, or | ||
quadruplex or a unit and the common elements in a multiunit | ||
residential structure in which [ |
||
sold or leased [ |
||
condominium or cooperative system. | ||
(7) [ |
||
to the load-bearing portion of a residence, such as a foundation or | ||
framing system [ |
||
(8) [ |
||
[ |
||
as defined by Section 82.003, of a condominium consisting of one or | ||
more residences. | ||
SECTION 2. Section 27.002(b), Property Code, is amended to | ||
read as follows: | ||
(b) To [ |
||
extent of conflict between this chapter and any other law, | ||
including the Deceptive Trade Practices-Consumer Protection Act | ||
(Subchapter E, Chapter 17, Business & Commerce Code) or a common law | ||
cause of action, this chapter prevails. [ |
||
SECTION 3. Section 27.003(a), Property Code, is amended to | ||
read as follows: | ||
(a) In an action to recover damages or other relief arising | ||
from a construction defect: | ||
(1) a contractor is not liable for any percentage of | ||
damages caused by: | ||
(A) negligence of a person other than the | ||
contractor or an agent, employee, or subcontractor of the | ||
contractor; | ||
(B) failure of a person other than the contractor | ||
or an agent, employee, or subcontractor of the contractor to: | ||
(i) take reasonable action to mitigate the | ||
damages; or | ||
(ii) take reasonable action to maintain the | ||
residence; | ||
(C) normal wear, tear, or deterioration; | ||
(D) normal shrinkage or cracking due to drying or | ||
settlement of construction components within the tolerance of | ||
building standards; [ |
||
(E) the contractor's reliance on written | ||
information relating to the residence, appurtenance, or real | ||
property on which the residence and appurtenance are affixed that | ||
was obtained from official government records, if the written | ||
information was false, outdated, or inaccurate and the contractor | ||
did not know and could not reasonably have known of the falsity, | ||
modification, or inaccuracy of the information; or | ||
(F) any condition, including noncompliance with | ||
an applicable code, standard, warranty, manufacturer's | ||
recommendation, or contractual plan or specification, that does not | ||
result in either: | ||
(i) actual physical damage to the | ||
residence; or | ||
(ii) the failure of a building component to | ||
perform its intended function or purpose at the time the notice | ||
required by Section 27.004 is sent; and | ||
(2) if an assignee of the claimant or a person | ||
subrogated to the rights of a claimant fails to provide the | ||
contractor with the written notice and opportunity to inspect and | ||
offer to repair required by Section 27.004 [ |
||
not liable for the cost of any repairs or any percentage of damages | ||
caused by repairs made to a construction defect at the request of an | ||
assignee of the claimant or a person subrogated to the rights of a | ||
claimant by a person other than the contractor or an agent, | ||
employee, or subcontractor of the contractor. | ||
SECTION 4. Sections 27.004(a), (b), (c), (d), (e), (g), and | ||
(m), Property Code, are amended to read as follows: | ||
(a) Before [ |
||
contractor damages or other relief arising from a construction | ||
defect initiates an action, the claimant shall give written notice | ||
by certified mail, return receipt requested, to the contractor, at | ||
the contractor's last known address, specifying in reasonable | ||
detail the construction defects that are the subject of the | ||
complaint. The [ |
||
shall provide to the contractor any evidence that depicts the | ||
nature and cause of the defect and the nature and extent of repairs | ||
necessary to remedy the defect, including any expert reports, | ||
photographs, and videotapes [ |
||
During the 35-day period after the date the contractor receives the | ||
notice, and on the contractor's written request, the contractor | ||
shall be given a reasonable opportunity to inspect and have | ||
inspected the property that is the subject of the complaint to | ||
determine the nature and cause of the defect and the nature and | ||
extent of repairs necessary to remedy the defect. To the extent | ||
requested, the contractor shall be given the opportunity to conduct | ||
multiple inspections during the 35-day period after the date the | ||
contractor receives the notice and during any extension of that | ||
inspection period provided by law or agreed to by the parties. The | ||
contractor may take reasonable steps to document the defect. [ |
||
(b) Not later than the [ |
||
contractor receives the notice under this section, [ |
||
of settlement to the claimant. The offer must be sent to the | ||
claimant at the claimant's last known address or to the claimant's | ||
attorney by certified mail, return receipt requested. The offer | ||
may include either an agreement by the contractor to repair or to | ||
have repaired by an independent contractor partially or totally at | ||
the contractor's expense or at a reduced rate to the claimant any | ||
construction defect described in the notice and shall describe in | ||
reasonable detail the kind of repairs which will be made and the | ||
estimated time for completion of the repairs. The repairs shall be | ||
made within a reasonable time [ |
||
by other events beyond the control of the contractor. If the offer | ||
of repair is accepted, the estimated time stated in the offer shall | ||
be considered reasonable. If a contractor makes a written offer of | ||
settlement that the claimant considers to be unreasonable: | ||
(1) on or before the 25th day after the date the | ||
claimant receives the offer, the claimant shall advise the | ||
contractor in writing and in reasonable detail of the reasons why | ||
the claimant considers the offer unreasonable; and | ||
(2) not later than the 10th day after the date the | ||
contractor receives notice under Subdivision (1), the contractor | ||
may make a supplemental written offer of settlement to the claimant | ||
by sending the offer to the claimant or the claimant's attorney. | ||
(c) If [ |
||
of the notice under Subsections (a) and (b) within the period | ||
prescribed by those subsections is impracticable because of the | ||
necessity of initiating an action at an earlier date to prevent | ||
expiration of the statute of limitations or if the complaint is | ||
asserted as a counterclaim, [ |
||
shall specify in reasonable detail each construction defect that is | ||
the subject of the complaint. The [ |
||
for by Subsection (a) may be made not later than the 75th day after | ||
the date of service of the suit, request for arbitration, or | ||
counterclaim on the contractor, and the offer provided for by | ||
Subsection (b) may be made not later than the [ |
||
pending, the statute of limitations for the cause of action would | ||
have expired and it is determined that the provisions of Subsection | ||
(a) were not properly followed, the action shall be abated to allow | ||
compliance with Subsections (a) and (b). | ||
(d) The court or arbitration tribunal shall dismiss [ |
||
an action governed by this chapter if Subsection (c) does not apply | ||
and the court or tribunal, after a hearing, finds that the | ||
contractor is entitled to dismissal [ |
||
claimant [ |
||
give the contractor a reasonable opportunity to inspect the | ||
property as required by Subsection (a), or failed to follow the | ||
procedures specified by Subsection (b). An action is | ||
automatically dismissed [ |
||
tribunal beginning on the 11th day after the date a motion to | ||
dismiss [ |
||
(1) is verified and alleges that the person against | ||
whom the action is pending did not receive the written notice | ||
required by Subsection (a), the person against whom the action is | ||
pending was not given a reasonable opportunity to inspect the | ||
property as required by Subsection (a), or the claimant failed to | ||
follow the procedures specified by Subsection (b) [ |
||
(2) is not controverted by an affidavit filed by the | ||
claimant before the 11th day after the date on which the motion to | ||
dismiss [ |
||
(e) If a claimant rejects a reasonable offer made under | ||
Subsection (b) or does not permit the contractor or independent | ||
contractor a reasonable opportunity to inspect or repair the defect | ||
pursuant to an accepted offer of settlement, the claimant[ |
||
[ |
||
(1) [ |
||
last offer of settlement under Subsection (b); or | ||
(2) [ |
||
settlement or purchase offer made under Subsection (n)[ |
||
[ |
||
(g) Except as provided by Subsection (e), in an action | ||
subject to this chapter the claimant may recover only the following | ||
economic damages proximately caused by a construction defect: | ||
(1) the reasonable cost of repairs necessary to cure | ||
any construction defect; | ||
(2) the reasonable and necessary cost for the | ||
replacement or repair of any damaged goods in the residence; | ||
(3) reasonable and necessary engineering and | ||
consulting fees; | ||
(4) the reasonable expenses of temporary housing | ||
reasonably necessary during the repair period; and | ||
(5) the reduction in current market value, if any, | ||
after the construction defect is repaired if the construction | ||
defect is a structural failure [ |
||
[ |
||
(m) Notwithstanding Subsections (a), (b), and (c), a | ||
contractor who receives written notice of a construction defect | ||
resulting from work performed by the contractor or an agent, | ||
employee, or subcontractor of the contractor and creating an | ||
imminent threat to the health or safety of the inhabitants of the | ||
residence shall take reasonable steps to cure the defect as soon as | ||
practicable. If the contractor fails to cure the defect in a | ||
reasonable time, the owner of the residence may have the defect | ||
cured and may recover from the contractor the reasonable cost of the | ||
repairs [ |
||
SECTION 5. Sections 27.0042(a) and (c), Property Code, are | ||
amended to read as follows: | ||
(a) A written agreement between a contractor and a homeowner | ||
may provide that, [ |
||
reasonable cost of repairs necessary to repair a construction | ||
defect that is the responsibility of the contractor exceeds an | ||
agreed percentage of the current fair market value of the | ||
residence, as determined without reference to the construction | ||
defects, then, in an action subject to this chapter, the contractor | ||
may elect as an alternative to the damages specified in Section | ||
27.004(g) that the contractor who sold the residence to the | ||
homeowner purchase it. | ||
(c) If a contractor elects to purchase the residence under | ||
Subsection (a): | ||
(1) the contractor shall pay the original purchase | ||
price of the residence and closing costs incurred by the homeowner | ||
and the cost of transferring title to the contractor under the | ||
election; | ||
(2) the homeowner may recover: | ||
(A) [ |
||
[ |
||
the owner made to the residence after the date the owner purchased | ||
the residence from the builder; and | ||
(B) [ |
||
residence; and | ||
(3) conditioned on the payment of the purchase price, | ||
the homeowner shall tender a special warranty deed to the | ||
contractor, free of all liens and claims to liens as of the date the | ||
title is transferred to the contractor, and without damage caused | ||
by the homeowner. | ||
SECTION 6. Section 27.005, Property Code, is amended to | ||
read as follows: | ||
Sec. 27.005. [ |
||
(a) This chapter does not create a cause of action or derivative | ||
liability or extend a limitations period. | ||
(b) Notwithstanding any other law, including Sections | ||
16.008 and 16.009, Civil Practice and Remedies Code, an action | ||
subject to this chapter must be initiated by filing and service of a | ||
lawsuit or a demand for arbitration not later than five years after | ||
the earlier of: | ||
(1) the date construction of the residence was | ||
completed; | ||
(2) the date a final inspection or certificate of | ||
occupancy was issued; | ||
(3) the date of transfer of title to the first owner of | ||
the residence; | ||
(4) the date of first occupancy of the residence; | ||
(5) the date of final payment to the contractor; or | ||
(6) the date an affidavit of completion is filed in the | ||
county in which the residence is located. | ||
SECTION 7. Section 27.006, Property Code, is amended to | ||
read as follows: | ||
Sec. 27.006. CAUSATION. In an action to recover damages | ||
resulting from a construction defect, the claimant must prove that | ||
actual physical [ |
||
caused by the construction defect. In no event may a claimant | ||
recover anything other than economic damages in connection with a | ||
claim subject to this chapter. | ||
SECTION 8. The following provisions of the Property Code | ||
are repealed: | ||
(1) Section 27.0031; | ||
(2) Sections 27.004(f) and (l); | ||
(3) Section 27.0042(b); and | ||
(4) Section 27.007(c). | ||
SECTION 9. The changes in law made by this Act apply only to | ||
a cause of action that accrues on or after the effective date of | ||
this Act. A cause of action that accrued before the effective date | ||
of this Act is governed by the law as it existed immediately before | ||
the effective date of this Act, and that law is continued in effect | ||
for that purpose. | ||
SECTION 10. This Act takes effect September 1, 2021. |