Labor shortages, lumber shortages, supply chain issues, mortgage rates, etc. are not the real cause of the current housing issue.
Labor shortages, lumber shortages, supply chain issues, mortgage rates, etc. are not the real cause of the current housing issue.
I recently sent this letter to the editor of the ASHI Reporter, the magazine of the American Society of Home Inspectors. Since I doubt seriously that they will publish it, I thought I’d post it here as well.
“Inspecting New Construction
While pondering over the idea of penning a technical article on new construction inspections for the upcoming December issue of the ASHI Reporter, I felt I should say this first.
If your business is not located in Texas – be happy. Properly inspecting new residential construction here is a serious challenge. Builders are not regulated, i.e. need not be licensed, bonded, insured, educated – nada. It may be similar in other states, but is certainly not as blatant as it is where I work.
Municipal inspectors are, I suspect, like they are nearly everywhere; overworked, under-paid, and questionably-proficient in building code enforcement. Even those who are in the know, well-meaning, and have a solid ethical base are often not allowed to be too strict, if they value their jobs. Builders are notorious for putting pressure on building officials, either via payola or by threat of moving their building sites to another jurisdiction where less enforcement will be encountered.
With both home prices and mortgage interest rates soaring it has become crystal clear to the home buying public that independent interim inspections are a must. In Texas, any inspector licensed by the Texas Real Estate Commission is allowed to inspect new homes under construction. This is certainly questionable, since they specifically exclude any building code knowledge from their SOP. This is also the case with the major inspection associations – including ASHI.
Where does this leave the home buyers? In peril. As professional inspectors it is our duty to inform clients of material and safety defects found during an inspection. If we are not ourselves intimately familiar with the minimum construction standards, i.e. the building, electrical, and energy efficiency codes, how will that work? It will not.
I think it is high time that ASHI makes the long overdue move toward requiring ICC certification for its members and assisting them in obtaining it. You cannot simply pretend to be the best, you must make proactive moves to ensure that you are indeed the best. One can spout all of the ethics one likes, but without action, it is just so much hot air.
Certification is the only way that one can prove knowledge of a process such as building. Without it, one is unaware of the very bones of construction regulations, not to mention the nuances that come by actually building homes – another prerequisite lacking for association memberships or state licensing.
The term “ASHI Certified Inspector” would take on a much broader and authoritative meaning if backed by more than the current minimalist SOP.
Flipping through the pages of the ASHI Reporter over the past few years gives me a clear view of the professional liability insurance industry’s influence that appears to be predominant. Insurance carriers do what is best for their bottom line by spouting fear-inducing mantras such as “do not exceed your SOP” or “do not quote codes”. In other words, be minimalists. Do the very least imaginable in order to protect your insurance company’s assets.
I apologize if the title of this article lured you in with the idea of discussing technical aspects of new construction inspections. I assume that, for the overwhelming majority of you who lack boots-on-the-ground construction experience and code certification, that might be a bridge too far.”
THE EVER-SHRINKING HOMEBUILDER WARRANTIES
I have written numerous times about the near-worthless warranties offered by Texas homebuilders. On September 1, 2023, I will now have less to write about. The barking-mad buffoons in the Texas Legislature were successfully lobbied by the Texas Builders Association and their insurers into lowering the 10-year maximum structural warranty to 6 years. There must have been some big money changing hands to get a whopping 40% reduction in consumer protection. Ya’ think?
It has been a slow-moving coup. We went from having an implied warranty of good workmanship (remember that?) and habitability back in 2000 to express warranties of 1-2-10 years, and now to 1-2-6 years. Given the philosophies embraced by the ruling party in Austin, I give it another 5 years before we are down to a 1-2-3 express warranty. Another 10 years, and they’ll be like the warranties on the appliance the builders install – 365 days.
The bright side, if there is one, is that the express warranties never actually warranted much anyway. So, homebuyers have not lost a whole lot—just 40% of disingenuous, empty promises.
I am reminding those of you who are about to sign on the dotted line with an unlicensed, unregulated Texas builder to have them build your new house that you have literally no protection from the unconscionable building practices that prevail here.
Get a copy of the warranty before you buy. Read the exclusions. These warranties consist mostly of exclusions. Important exclusions. For example, they do not cover building code violations. Since the building codes are the MINIMAL standards, one might presume that the warranties would insist on ensuring compliance with them. That is not the case.
If you do not have your house independently inspected during the construction process for code compliance, who will ensure that compliance? Your builder certainly will not. The municipal inspectors will not. The Texas Legislature will definitely not. The Texas Attorney General cannot – he’s been put on indefinite leave due to “alleged” corruption. You’ll be screwed. Self-screwed, not to put too fine a point on it.
With the relatively recent advent of media bombardment regarding A.I. meddling in human affairs, I feel I should remind everyone that I do not employ artificial intelligence in writing my blog articles or inspection reports. There is simply no question as to who is more qualified; me with 48 years in construction defect identification or AI with literally no boots-on-the-ground experience.
As with most businesses, A.I. lovers are attempting to insinuate themselves into everything. Inspection report-writing software companies are hawking their wares with ludicrous statements like:
“One of the key drivers for the adoption of AI-based home inspection software is the shortage of skilled labor in the industry. According to the National Association of Home Inspectors, the demand for home inspections is projected to grow by 10% over the next decade, while the supply of qualified inspectors is expected to decrease by 15%. This means that the industry will face a shortage of 25,000 inspectors by 2029.
AI-based home inspection software like XYZ is providing a solution to this problem by providing a consistent level of quality across all inspections, regardless of the inspector. This technology is capable of analyzing large amounts of data quickly and providing a detailed report and recommendations for repairs or upgrades in a fraction of the time it would take a human inspector.”
A.I. lovers dream on.
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.
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.
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.
Let Me See Those Plans
Projects as complicated and pricey as building a new house require professional planning. An architect must lay down the bones of the house, i.e., the floor plan and elevations. Afterward, an engineer is needed to design the framework of the structure so that the materials used will satisfy the load requirements for the design and location. Either of these professionals or the two working in tandem choose the exterior and interior cladding materials, electrical wiring and fixtures, plumbing and fixtures, mechanical design and equipment, etc.
Once all of the requisite decisions are made, the design of the house is committed to technical drawings and written specifications. These two elements comprise the plans (formerly referred to as blueprints). Several copies of these plans are then submitted to the local building inspection department, where a certified plans examiner ensures that the design complies with all building, electrical, plumbing, and energy codes adopted by the municipality.
Once the building inspection department approves, a permit is issued to the house builder, and work on the project can commence. The builder then distributes copies of the approved plans to all of the subcontractors involved in the construction of the house.
Throughout the process described above, the original designer’s copyright has not been infringed, assuming that the builder either has an in-house design department or purchased the plans from a third-party designer. The other folks, such as the builder’s staff, his subcontractors, and the municipal building inspection department, are using the plans under the fair use doctrine that applies to copyright laws.
With very few exceptions, Texas production builders will not provide you with plans for the house you hire them to build for you. Why do you suppose that is? They will hand them out freely to every questionably-legal immigrant worker but not to you – the purchaser. One answer is that they are too cheap to print them for you – it eats into their almighty profit. More importantly, they do not want you to know how far they stray from the plans during construction.
This presents a real problem in that, without the plans, you will not know if you are getting what you paid for. Additionally, if you hire a third-party inspector (and you should if you have two synapses to rub together), that inspector will need those plans to ensure that your house is being constructed in strict compliance with the plans and the applicable industry standards.
What’s a mother to do? In Chapter 552 of the Texas Government Code, we find that anyone can request copies of documents determined to be “public information.” This means written, produced, collected, assembled, or maintained information under a law or ordinance or in connection with the transaction of official business by a governmental body, such as your municipality. Once requested, the municipality has ten business days to provide you access to the documents requested.
When requesting the plans for your house, the request should read something like this:
“All documents and drawings associated with the permitting, constructing, and inspecting the single-family residence located at 123 Yee-hah Street, Redneck, Texas 75XXX“.
If the municipality resists, explain that you will both file a formal complaint with the Texas Office of the Attorney General and contact your attorney. Problem solved.
Almost. All of the above information applies only if your house is within the limits of a municipality or within its extraterritorial boundaries. If your house is situated in an unincorporated area of a county, you will need to have your attorney write into your contract with your builder that you will receive a complete set of plans before the commencement of construction.
One of my biggest concerns with any inspection is lot grading and drainage. Because most folks assume that they understand it – after all, we all can grasp that water runs downhill – but practically all have no idea of the significance. This statement includes home builders, municipal inspectors, and home buyers.
North Central Texas has some of the most expansive clay soils in the nation. Add to that the fact that, for the most part, foundations here are woefully under-engineered. Let’s include one last pertinent fact: Texas builders and contractors are totally unregulated. It should then come as no surprise that Texas has the most significant number of foundation failures and repair companies in the USA.
The problem begins with a near-total lack of understanding (or concern, or both) of the aforementioned facts on the parts of the builders and municipal inspectors. These are unreachable by merely appealing to reason by presenting arguments based on facts. That just leaves you – the home buyers. Hopefully, I can make some headway with you.
Texas builders are only interested in profit. The Texas Legislature is only interested in one thing – getting reelected. The more profit their constituents (the builders) make, the more they have to spend on getting their favorite congressman back into the office to support builder-friendly legislation. Grading and drainage is not their concern.
The number of lies I’ve heard told by builders regarding lot drainage is staggering. They range from “looks like it drains to me” to “if it drains within 48 hours, it’s OK” to “our surveyor says it is just fine.” While these may, at first blush, sound like plausible explanations, they consist of nothing more than lightly-veiled bullshit.
I go to a lot of trouble to illustrate in my reports the problems with lot drainage on each inspection. I use a ZipLevel Pro 2000 leveling instrument that is accurate to ±1/8″ over 100 linear feet and costs about $800. Often, builders will supplant the facts in my reports with their typical BS, and the home buyers fail to insist that the grading be improved. Just as often, the builder will claim to have made improvements when none were made. How can one verify this without paying me to return to the site?
Simple. Measuring Yard Slope- Ludwig. Do your due diligence.
Check your electrical panel to see if it is one of these:
IMPORTANT UPDATE – 1/23/23
I have encountered 40 new homes under construction with these panels since publication in June of last year. Of those, 30 of those builders claimed no responsibility for replacing the panels. Typical corporate builders in redneck Texas.
New home construction keeps on getting worse by the day. This fact is made crystal clear by the 2019 Common Code Noncompliance Report issued by the National Association of Homebuilders in conjunction with the International Code Council. The survey is based on information gathered from respondents, primarily municipal building officials tasked with enforcing building codes in their jurisdictions.
In this publication, it states, in part, “All types of new homes with code violations have significantly increased compared to the last survey. A considerably higher number of respondents found all types of new construction to have code violations (over 60%).
This is an upward trend of over 17% from the highest respondent code violation of 2012 (44%) to the lowest respondent rating of code violation in 2018 (61%). New construction of high-end (expensive) homes was also significantly higher (88%) than in the 2012 survey (35%).
In my experience, the number of violations has increased drastically since this report was published using 2018 data. I will use some of the information from the report and augment it with what I actually see in my day-to-day inspections.
Those of us who are cognizant of our surroundings, can take sustenance, and stand upright, realize that plans are essential in building houses. Texas builders, with almost no exceptions, refuse to leave copies of the building plans onsite. The International Residential Code clearly states that these must be kept onsite throughout the build process.
The code is adamant for a good reason. Without the recipe and with so many cooks in the kitchen, the pudding will be a disaster. Communication between the trades cannot happen without a unified plan of action. Everything falls between the cracks.
The builders here cry “copyright” when asked to see the plans. Any attorney will advise you that copyright is not breached by simply holding, reading, and referring to a set of building plans. If this were the case, books of every kind would cease to be available for reading. Referring to a set of plans falls under the doctrine of fair use.
If the DFW building officials would simply issue stop orders on all of the properties under construction that did not have the plans onsite, things would rapidly change.
If you are building a new house, one of the first things you should do is contact the municipality and request a full set of plans for your house under the open records act or the Texas Freedom of Information Act. They will then have ten business days to provide these to you, usually at no cost.
Grading and Drainage
DFW lies in the land of expansive clay soils. These undulating soils contain minerals that expand and contract significantly due to moisture content. It follows that a shallow slab-on-ground foundation will be affected by the movements of the soils upon which it is built. Maintaining even soil moisture in a 10-foot wide swath around the perimeter of any building’s foundation will help to stop differential movement and damage.
This can only be achieved by having positive drainage around the foundation perimeter. This is achieved by grading the soil to slope downward at a rate of 6 inches in the first 10 feet out from the slab edges. Very simple to do, just not for Texas builders.
Improperly Placed Anchor Bolts
The walls of the first floor of a house are connected to the foundation by embedding bolts in the concrete when it is poured and then attaching the bottom plates of the walls to these bolts with nuts and washers. The code requires certain sizing, spacing, location, and galvanization of these bolts.
Texas builders can be depended upon to pay absolutely no attention to such mundane details. Like making sure the walls stay attached to the foundation in periods of high winds, you know.
Braced Wall Errors
Wall bracing keeps the walls of the house from racking during wind events. The code provides many methods to achieve this. Texas builders must have missed that class. Oh, wait, Texas builders are not required to attend any classes of any kind. WTF was I thinking?
Improperly Sized and Installed Joists and Beams
Joists and beams are horizontal structural elements of a house that ceilings, wall openings, and floors consist of. If undersized or improperly installed, they will not perform their intended function. This results in drywall cracks in the ceilings and floors that squeak. Your builder won’t be living in your house, so what does he care about insignificant cracks and squeaks anyway?
Deck Ledgers and Braces
After 47 years, I have yet to see a home builder or contractor build a deck that is code compliant.
Stair Rise/Run Errors
Stairs are poorly constructed on almost every house. Subconsciously, one anticipates the rise (height between steps) of stairs to be uniform. When they are not, people slip and fall.
Stair Handrails and Guardrails
Handrails are there to give one something to stop their fall should they lose their footing on the stairs, like when the risers are wrong. These rails must be installed in a manner to make them useful in an emergency. Many are not.
Missing or Inadequate Fire Blocking
Fireblocking provisions slow the spread of fire should a house be subjected to one. Usually, these details are wrong or missing altogether.
Keeping houses from leaking air is both a desirable goal and a code requirement. Air sealing is a hit-or-miss sort of game for Texas builders.
Exposed Kraft-Faced Insulation
Despite the labeling on kraft-faced insulation batts, Texas builders install them backward with the kraft face away from the drywall. This is a fire hazard that your Texas “builder” could not care less about.
Specify a quality gutter system. An inch of rain on a 2,000 square-foot roof produces 1,200 gallons of water. The gutter is the best line of defense against this wall of water.
The Bad News
The bad news is that this is a very abbreviated list of items I find daily. The actual list, not the one tweaked by the National Association of Home Builders to improve the optics, would be at least 10 times this long.