In "Washington Law Considered New Model In Disputes Between Home Builders and Buyers" by Kenneth Harney, the National Association of Homebuilders (NAHB) praises a bill that requires a cool off period prior to a lawsuit being filed for new home construction defects. They call this "good for the consumer". This is old news to Texas. We passed this bill 13 years ago, and while the nation embraces it, we, in Texas, are working hard to repeal it.

Given the reputation of the NAHB, saying this is "good for the consumer" is nothing short of a red alert warning to all new homebuyers.

The bill passed in Texas is called the Residential Construction Liability Act or RCLA (pronounced wreck la). It is an act that limits the liability for defects of anyone involved in residential construction. It gives the builder about 3 months to resolve a defect before a suit can be filed. It is not designed to help the consumer; instead it provides yet another hurdle for new homeowners who simply wants their homes fixed.

The bill fails to take into account the months of anguish the homeowner goes through prior to filing under RCLA. If letters, emails, phone calls, faxes, and taking off of work, time and time again, to meet the builder and allow repairs doesnıt resolve the dispute, why would a certified letter do any better? Homeowners with serious defects attempt to work in good faith with the builder only to be stonewalled, disrespected, and insulted for months at a time. It is then and only then they seek legal assistance.

And this is where RCLA fails. RCLA also stands for Requires Competent Legal Assistance because if it is not followed correctly, it could severely limit an award if the homeowner is successful in court. It is a shame the NAHB is touting a bill that requires the use of an attorney as "good for the consumer" when the consumer would rather work in good faith without one.

The national bill touted by the NAHB is a stepping stone for limiting the liability of new homebuilders. In Texas RCLA has been modified to require yet another delay through mediation at homeowners expense, and places caps on the liability of the builder regardless of the severity of the defect. And it supercedes Texas strong Deceptive Trade Practices Act that held builders accountable for their actions. And with the rabid abuse of binding arbitration, the homebuyer, after going through the RCLA process, cannot file a suit, but must instead be subjected to a kangaroo court of arbitrators.

Here in Texas we have first hand experience of what happens when you allow corporations to manipulate the laws and deem it "good for the consumer". We have seen the suffering of ex-Enron employees, and seen those responsible take little if any responsibility for their actions. We have seen what could happen to a lifetime of investments when corporations police themselves. The NAHB proposal to continue to protect these corporations is just more of the same and is not "good for the consumer".

The NAHB has issued a red alert warning. Heed that warning. Do not become Enron-ed.

Published: July 18, 2002

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