State Sponsored Inspections
Administrative state-sponsored inspection and dispute resolution process (SIRP).
Probably one of the most controversial and misunderstood provisions of the TRCCA is the state-sponsored dispute resolution process, also known as "SIRP." SIRP is a formal inspection process that applies to defects or construction problems arising after construction is complete. Generally, any dispute between a homeowner and a builder that relates to a construction defect involving new home construction or certain remodeling projects under the TRCCA must be submitted to the SIRP. Similar to other statutes governing construction disputes, the SIRP contains notice requirements, filing limitations, building inspection rights. However, the SIRP also includes one extremely important difference, an intricate state inspection process that results in an agency decision affecting a homeowner's future claim
- Pre-SIRP Notice
Generally, homeowners must provide builders with written notice of a claim not less than thirty days before submitting a SIRP request to the TRCC. Upon receiving notice, a builder or home remodeling contractor has the right to inspect the home or property to evaluate the homeowner's claim.
- Filing Limitations
In most cases, a homeowner must submit a SIRP request to the TRCC within either thirty or ninety days after the date that any applicable statutory warranty period expires, but not later than two years after the construction defect is discovered.
- State Inspection Process
Once a homeowner properly invokes the SIRP, and the TRCC determines that the dispute is eligible for the SIRP, that the SIRP request form is properly and timely filed, and that the home is registered with the TRCC, the TRCC is required to appoint a registered third-party inspector to perform an inspection of the home. Both the homeowner and the builder have the right to object to the appointed inspector.
- State Inspection Decision
Once the TRCC appoints an inspector, the inspector conducts an inspection of the home and files an inspection report with the TRCC. The report must contain, among other key requirements, recommendations for the method or manner of repair of the construction defect. Once the report is submitted, if no party appeals, the report is the final action of the TRCC under the SIRP, and the findings of the report greatly influence any lawsuit that is later filed.
- Appeal Rights
Both the homeowner and the builder have the right to appeal the report's recommendations.
Effectiveness and Problems Reported with SIRP
Even though the SIRP procedures have been in place for a number of years, reviews of the effectiveness of the program have found the SIRP process seriously lacking. According to an October 2005 Review of the Texas Residential Construction Commission, conducted by the Texas Comptroller, Carole Keeton Strayhorn found that the SIRP suffered from numerous problems, including the following:
- 86% of the homeowners surveyed stated that their builder failed to fix the identified construction defects in their homes, even after going through the mandatory SIRP process
- 93% of the inspections conducted by through the SIRP process found at least one construction defect
- TRCC restrictions prevented a third-party inspector involved in the SIRP process from including any item in the inspection report that was not originally included by the homeowner in the SIRP request form, unless the defect relates to health or safety
- TRCC's authority did not extend to abandoned or incomplete construction, nor did the TRCC contain any mechanism to assist homeowners with claims against bankrupt builders
- The SIRP process is simply a "front end" that most homeowners must endure before being able to seek true results through litigation under the RCLA
Thus, although the SIRP was originally touted as a streamlined process to aid homeowners in Texas in resolving their construction disputes, it appears that the SIRP is in reality complicated and cumbersome process that does not favor the homeowner.
Legislation Affecting the SIRP.
Recent amendments to the TRCCA include a new section 401.007 that provides for enforcement action by the TRCC against violators and penalties, that include monetary fines and revoking or suspending a builder's registration with the commission. However, these new disciplinary procedures only apply to conduct that occurred on or after September 1, 2007. Other recent amendments to the TRCCA relating to the SIRP include the following:
- A homeowner is not required to go through the SIRP if the builder was not registered with the TRCC at the time of contracting or if the builder's registration has been revoked;
- The TRCC may waive or reduce SIRP fees for homeowners who demonstrate an inability to pay;
- The deadline for filing a SIRP notice has been extended from 30 days following the expiration of the applicable warranty period to 90 days, as long as the SIRP is filed on or before the second anniversary of the discovery of the construction defect.
These and other changes to the SIRP have added to an already time-consuming and complex process. Only time will tell if these changes will help or continue to hinder Texas homeowners.
The residential construction defect attorneys at CKPT can assist with all stages of a construction dispute, before, during, and after the SIRP process.
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