How To Avoid Being (Completely) Screwed When Buying A New Home in Texas
When purchasing a new home from a Texas home builder, you are entering a veritable mine field from which you will not escape totally unscathed, all prudent preparations on your part notwithstanding. Regardless how intelligent, street smart, savvy, or tough-minded you envision yourself to be, you are outgunned from the start. Your opponents are corporate production builders who spend more money on lobbying the Texas legislature than nearly any other group. The laws regarding home building are written to protect them – not you. Unconvinced? Let’s take a closer look.
Binding Arbitration
When a conflict arises from your learning that your builder is shoddily constructing your new home (which is inevitable), you have little viable recourse. All builders’ contracts contain a clause that limits your legal action against them to binding arbitration. This is an expensive process that is heavily weighted in the builders’ favor. The arbitrators are always from the American Arbitration Association. This group is in close affiliation with the National Association of Home Builders (NAHB). From their site: “As the provider of choice for dispute resolution services, the AAA through its National Construction Dispute Resolution Committee (NCDRC), has worked closely with the industry to develop the Construction Industry Arbitration Rules and Mediation Procedures and other project specific approaches to prevent and manage conflict.” These rules are written by the builders and for the builders.
Building Codes
The building codes adopted by the various municipalities in the state of Texas are based upon those authored by the International Code Council (ICC). While, at first blush, appearing to be an independent code-authoring organization, further investigation reveals undue influence from the NAHB. Just one glaring example is that, from its inception in 2000, the ICC’s International Residential Code stated its purpose in 101.3 as “The purpose of this code is to provide minimum requirements to safeguard life or limb, health and public welfare.”
Now let’s watch the changes that occurred in 101.3 during subsequent versions.
The 2003 version states, “The purpose of this code is to provide minimum requirements to safeguard the public safety, health and general welfare, through affordability, structural strength, means of egress facilities, stability, sanitation, light and ventilation, energy conservation and safety to life and property from fire and other hazards attributed to the built environment.” This is an improvement. The 2006 version states exactly the same. All is well so far.
The 2009 version introduces a fly into the ointment: “R101.3 Intent. The purpose of this code is to establish minimum requirements to safeguard the public safety, health and general welfare through affordability, structural strength, means of egress facilities, stability, sanitation, light and ventilation, energy conservation and safety to life and property from fire and other hazards attributed to the built environment and to provide safety to fire fighters and emergency responders during emergency operations.” Now, the minimal building code, which is the worse way one can legally build a house, hinges upon affordability and not safety. And, the picture gets even more bleak.
Municipal Building Inspectors
When a municipality in Texas adopts a building code it becomes and has the force of law. The municipal building inspectors are tasked with the job of enforcing this code, or are they?
In IRC 104.1, we find, “The building official is hereby authorized and directed to enforce the provisions of this code . . .” So far, it sounds like the onus is on the building official to enforce the building code. But wait.
The rest of that citation goes like this, “. . . The building official shall have the authority to render interpretations of this code and to adopt policies and procedures in order to clarify the application of its provisions. Such interpretations, policies and procedures shall be in conformance with the intent and purpose of this code. Such policies and procedures shall not have the effect of waiving requirements specifically provided for in this code.”
That still sounds like the building official must enforce the spirit, if not the letter, of the code. However, on January 19, 2005, Greg Abbott, Attorney General of Texas (yes, the same bozo that would have you elect his sorry self for governor) rendered a rather specious opinion on the matter that concluded with this, “Local Government Code section 214.212(c)(1), which permits a municipality to adopt local amendments to the International Residential Code, does not limit the municipality to adopting only local amendments that are equivalent to or more stringent than the standards of the International Residential Code.” In other words the municipal inspectors can do as they please. The building code be damned.
Remember that the building officials work for the corporations that are the municipalities. It is their job to protect that corporations and not you. They are also stuck between the developers wanting to build in their jurisdictions and the politicians they work for. So who will be on your side?
Step 1
Hire an attorney before you sign any paperwork with any builder. Not just any attorney will do. Your run-of-the-mill, paper-shuffling bar-passer will not suffice. You need an attorney who is experienced in dealing with builders and their contracts. If you need a referral, contact me.
Strike the binding arbitration clause. Add to the contract that your builder shall repair everything that your third-party inspector finds to be in conflict with the letter and spirit of the adopted building codes. You should also insist that the builder supply you with a complete set of the construction documents (blueprints). Do not fall for his story about them being copyrighted. While they are indeed copyrighted, the copyright only prevents you from selling the plans or using the plans to build a house, it does not prohibit your possessing a set of plans to the house you have bought. As the owner of the home your possession of the plans would fall under the doctrine of fair use.
Step 2
Hire a competent home inspector. The minimum requirements for this inspector are, (1) Significant prior home construction experience, (2) International Code Council certification as an R-5 Combination Residential Inspector, (3) Licensed by the Texas Real Estate Commission or the Texas Board of Professional Engineers.
Step 3
Grow a set of cojones. Take charge of the project from the outset, stay on top of every phase of construction, and do not succumb to the builder’s bullshit and outright lies. Take no prisoners. Make no mistake. This is an adversarial relationship you are entering into with your builder. He is not your friend.
If you follow the three steps above you will not end up with a perfect house. You will also not be on the receiving end of quality construction. These are unattainable goals in the current Texas home building milieu. You will, however, be in charge of an otherwise uncontrollable process that will result in a substandard house replete with defects.
