The Texas Association of Builders (TAB) Warranty
The State of Texas does not regulate homebuilders. They are self-regulated.
If you search Google for who governs Texas home builders you get the following result: “The Texas Association of Home Builders (TAB) is a voluntary trade organization representing all segments of the residential building industry.”
“Founded in 1946, the Texas Association of Builders is an affiliate of the National Association of Home Builders and has 26 local associations and nearly 10,000 builder, remodeler, developer and associate members across the state. Representing over 758,000 jobs and more than $71.5 billion annually in the Texas economy, the state and local associations play a crucial role in providing housing for Texans.
The Texas Association of Builders is dedicated to creating a positive business environment for the housing industry by addressing the housing issues of the people of Texas.” – From the TAB website
Note that nothing is said regarding consumer protection. It is all about a “positive business environment for the housing industry”. Read: industry control.
“The Texas Association of Builders (TAB) has a standing Contracts Committee to ensure that its contracts are comprehensive, up-to-date, and the best product available in Texas. As such, the TAB contracts provide homeowners and builders an invaluable benefit in the form of enhanced legal protections, reduced liability, clear legal compliance with various Texas laws and a solid written warranty with some of the strongest performance standards in the nation. Many other form contracts, including the National Association of Home Builders’ contracts, fail to meet numerous statutory requirements in the Texas Property Code, as well as fail to properly waive all implied warranties as outlined by the Supreme Court of Texas, thereby exposing homeowners and builders to serious legal liabilities and significant expenses, including the voiding of non-compliant contracts.” – From the TAB website
Though cryptically stated, this explains they are mainly concerned with enhanced legal protections and reduced liability for home builders. Avoiding legal liabilities through lobbying for builder-friendly laws as opposed to actually constructing houses properly. It is important to note that they are praising their own efforts to preclude builders from the need to adhere to the any implied warranties.
EXPRESS VS. IMPLIED WARRANTIES
In Texas home building, an express warranty and an implied warranty are two different types of warranties that provide different levels of protection to the homeowner.
An express warranty is a warranty that is explicitly stated in writing, such as in a contract, sales brochure, or other documentation. The terms of an express warranty are negotiated between the home builder and the homeowner and can vary widely. For example, an express warranty might specify that the home’s foundation will not crack for a certain number of years or that the roof will not leak.
In contrast, an implied warranty is a warranty that is not explicitly stated but is automatically assumed to exist by law. In Texas, there are two types of implied warranties that apply to new home construction: the implied warranty of habitability and the implied warranty of good workmanship. The implied warranty of habitability means that a new home must be fit for its intended use as a dwelling and must be free from any defects that could affect its use for that purpose. The implied warranty of good workmanship means that the home must be constructed in a workmanlike manner, using materials that are of a quality consistent with industry standards.
The key difference between an express warranty and an implied warranty is that an express warranty is negotiated and agreed upon by the parties, while an implied warranty is automatically implied by law. Additionally, an express warranty may offer more specific protections than an implied warranty, while an implied warranty applies regardless of whether or not it is explicitly stated in the contract.
- IMPLIED WARRANTY OF GOOD WORKMANSHIP
The implied warranty of good workmanship is a common law principle that is implied in every construction contract, regardless of whether it is explicitly stated in the contract or not. It is a promise that the work performed by the contractor or subcontractor will be done in a skillful, careful, and diligent manner consistent with the standards of the trade.
The warranty applies to both the construction of new property and the repair or modification of existing property. It requires the work to be done in a manner that meets the standards of the industry and is consistent with the expectations of a reasonable person. If the work performed by the contractor or subcontractor does not meet these standards, the owner may have a cause of action against them for breach of the implied warranty of good workmanship.
It is important to note that the warranty does not guarantee a perfect result, but rather a result that is consistent with the standards of the industry. If the work is performed in a good and workmanlike manner, but defects or problems arise later, the owner may still have recourse through other legal avenues, such as a breach of contract claim or a claim for negligence.
Overall, the implied warranty of good workmanship is an important protection for owners and ensures that construction work is performed to a reasonable standard of quality.
A profit-driven industry that is self-policing would surely do all in its power to avoid adherence to avoid dealing with something as consumer-friendly as an implied warranty of good workmanship.
- IMPLIED WARRANTY OF HABITABILITY
The implied warranty of habitability is a legal doctrine that is implied in most residential construction contracts. It requires the contractor to construct a residential dwelling that is safe, sanitary, and fit for human habitation at the time of sale, and that is free from defects that could render the dwelling uninhabitable. The warranty is implied by law, which means that it applies even if it is not specifically stated in the contract.
In most states, including Texas, the implied warranty of habitability cannot be waived because it is viewed as being in the public interest to protect homeowners from uninhabitable conditions. However, the implied warranty of good workmanship can be superseded by an express warranty if the parties’ agreement specifically describes the manner, performance, or quality of the services to be provided.
This means that if the parties explicitly agree to a higher or lower standard of workmanship than what is normally expected in the industry, the express warranty will supersede the implied warranty of good workmanship. However, the express warranty must be clear and unambiguous and must be sufficiently specific to the work being performed.
Overall, both the implied warranty of habitability and the implied warranty of good workmanship are important protections for homeowners. While the implied warranty of habitability is generally viewed as being non-waivable, the implied warranty of good workmanship can be superseded by an express warranty under certain circumstances.
The darling of the TAB is their express warranty, which they tout as the best warranty in the nation. It was originally authored by the now defunct Texas Residential Construction Commission (TRCC).
The Texas Residential Construction Commission (TRCC) was a state agency established in 2003 to regulate the home building industry and resolve disputes between homeowners and builders. However, it was disbanded in 2009 due to controversy surrounding its effectiveness and transparency.
One of the main criticisms of the TRCC was that it was too closely aligned with the home building industry and did not adequately protect homeowners’ rights. Critics argued that the TRCC’s dispute resolution process favored builders over homeowners and that its regulations were weak and ineffective.
In addition, there were concerns about the TRCC’s transparency and accountability. Some critics claimed that the agency was too secretive and that its decision-making process was not open to public scrutiny. In response to these concerns, the Texas Legislature voted to abolish the TRCC in 2009.
The commission that the builders themselves lobbied for was deep-sixed due to what the Sunset Commission regarded as widespread builder corruption.
The State of Texas has adopted minimum model building standards for home construction in the form of those authored by the International Code Council (International Residential Code, International Energy Efficiency Code, et al.) and the National Fire Protection Association (National Electrical Code).
The purpose of these codes, per the ICC:
“IRC 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.”
The only mention of building codes – the absolute minimum of consumer protection in new home construction – is in the exclusions of the warranty adopted by the Texas Association of Builders.
“Section VIII Exclusions – 5. Failure of Your Builder/Seller to complete construction or construction which is noncompliant with plans and specifications;
violations of local or national building codes, ordinances or standards;”
So, if your builder does not build in accordance with the minimum building standards, and the municipal inspector (if any) does not do his job to enforce these standards, you will find yourself in an extremely challenging situation that may not be practically escapable.
” Government Affairs
The Texas Association of Builders’ professional government relations staff work year-round to advocate for legislative reforms that benefit our industry. TAB’s experienced lobbyists monitor bills, legislative and regulatory agency hearings that affect the building industry and work to amend or defeat measures that would adversely impact the industry.
TAB’s government affairs program is nationally recognized for its innovation and legislative successes. The effective efforts of TAB’s government relations team has resulted in the defeat of bills that would potentially harm our industry, and add significant costs to the home building industry and, in turn, to the home buying public.
The home building industry is among the most regulated industries in the country. In Texas, several regulatory agencies govern the practice of construction including: Texas Department of Licensing and Regulation (TDLR), Texas Department of Insurance (TDI), State Energy Conservation Office (SECO), Texas Commission for Environmental Quality (TCEQ) and Texas State Board of Plumbing Examiners.
TAB staff continuously monitors regulatory changes and new rule postings. When changes are proposed, TAB staff and members participate in the process by providing comments and testimony in an effort to keep the home building industry free from excessive regulation and fees.” – From the TAB website
The TAB evidently considers any regulation of its members to be excessive.
In short, the TAB is on a course to supplant all industry standards with their paper-thin express warranty.
Before you sign on the dotted line with any Texas homebuilder, hire an attorney to review the contract, warranty, and other documents involved and explain your rights.