Austin TX Real Estate - Hill Country Austin Lakeway Homes for Sale: Attention all TEXAS Realtors- VERY Important Contract Changes to Effect ALL Homeowners

Attention all TEXAS Realtors- VERY Important Contract Changes to Effect ALL Homeowners

As of September 1, 2008, yesterday, the state of Texas has new contracts.  The actual changes in the main "Single Family" contract are minuscule.  However, there is a new addendum that must accompany each and every contract from now on.

This new addendum will kick Investors out of our market, and I believe that was the point of it.  Not a very good move since we have tons of investors in our different markets across the state, but apparently the state of Texas thinks it's a strategic move.  This should be featured and bookmarked in every way possible so the maximum amount of people can read about this who have never heard of it, since it's new.

I'm not an attorney, so I'll just be providing a summary of the interpretation my office manager provided us, so if you have a differing interpretation, I would love to hear it.

The new addendum basically has the homeowner sign a form stating that if they recently did over $10,000 in remodeling or repairs to their property, AND they have not lived in the house for at least 1 year since doing those repairs or remodeling, they have now been classified as a builder.  Being classified as a Builder means the homeowner now MUST provide to the new home owner a 10 year structural warranty to the property, a two year mechanical warranty which includes plumbing, electrical, and AC/Heating systems, AND a one year warranty on all materials and workmanship.

Yes, this is the standard warranty a "regular" Builder must provide a homeowner upon buying a brand new home!

For example, a homeowner decides he wants maximum dollar upon resale of his home so he decides to update his kitchen and bathrooms.  The work costs $15k, but he does it because he knows he'll get a good $25-30k higher sales price if he does.  However, if he does those updates and sells right away, he is a builder and must provide warranties.  If he does the updates and then lives there exactly 1 year or longer, he does NOT have to provide a warranty to the buyers whatsoever!

This means, if an investor comes in and buys a house, fixes it up, puts tenants in it for a few years to get some cash flow, and then decides to sell it, if he doesn't have tenants in the house for at least 10 years, he MUST provide the new homeowner with a warranty (the warranties' time periods start when the repairs are complete so if there is a tenant for 5 years, the investor must provide a foundation warranty for an additional 5 years to the new home owner).

It seems like the only way to get around this is to have your investors move into the house while they are making the repairs, and then live there the remainder of the year.  This would also provide for a lower interest rate because they would be an owner occupied buyer instead of an "investor" ready to flip it. But then the investors could only buy one property a year, which means many investos must go back to their other professions in order to get a weekly paycheck in between house purchases.

I spent a good portion of this morning talking with some of my clients about this new addendum and about how we're going to approach it.  The thing is, even though the new contracts are mandatory as of Sept 1, 2008, the new addendum as been approved as of 12/10/2007 so everything is retro back to that date.  If you have investors who did repairs to properties before December of last year, you're probably ok (again, I'm not an attorney). 

Also, as a buyers' agent, if you walk into a house that looks like it has been completely redone, don't promise your buyers that they're going to get these warranties because you shouldn't assume the investor/home owner spent more than $10k.  These days, you can get cheap carpet, appliances, and paint for under $10k, but it might look like more was spent.  I would ask the listing agent to supply their invoices and receipts to show how much they spent to make sure your buyers have protection.

From my understanding, this was put into place to stop investors from patching defects and then flipping the property, and then the new home owner have no where to go when everything starts falling apart.  However, with a dollar limit like $10k, I can see investors doing exactly that!!  They'll go buy some spackle, texture, and paint over the foundation cracks in the walls.  They'll go buy some Killz and paint to cover up the water stains hiding a leak in the ceiling or the mold stains on the walls.  They'll cut a lot of corners to keep their costs down, and then they'll be screwing the consumer in the process.

I don't see how this new addendum is a win/win for anyone.  I had to call one of my sellers today to say, "Remember last week when I told you that you should gut the kitchen to update it from its original 1984 look?  Well, forget I said all that and just slap on a fresh coat of paint throughout the house."

What do other Texas REALTORS® think of this new addendum?  If you have this type of thing in your state, how is it handled?  Has it taken the investors out of your market?  Buyers and Sellers, if you're reading this, how do you feel about it?  Do you think you'll be better protected because of this addendum?

Comment balloon 53 commentsDonna Harris • September 02 2008 01:26PM

Comments

Sounds like alot of sellers will be getting upset if they fall into that category. 

Posted by Angelia Garcia (Pure Realtors) about 10 years ago

I agree.  I do not think this is a win/win for everyone.  I do believe seller's will be upset by this if it affects them.  Thanks for the summary...all TX agents need to be aware.  Kristin

Posted by Kristin Moran, San Antonio,TX - Real Estate - 210-313-7397 (Owner - RE/MAX Access - KristinMoran@Remax.net) about 10 years ago

Doesn't sound like a solid "plan" to solve the problem they intended to fix.  Too many loopholes.

Posted by Lewis Beynon, Triangle Real Estate 411 (Norris Team of Century 21 Triangle Group) about 10 years ago

Thanks Donna for this update.  I think this is NOT a win/win.  It means a lot of investors that would have bought houses will not be buying now especially the small time investors that only buy one or two or three houses a year.  That means lots of sellers will be holding their properties longer while trying to find a buyer.  In an economy like this where everything needs to be done to help the market, the State once again cuts off its nose to spite its face.

This is what happened in the 80's.  They took away the investors incentives to invest by taking away capital gains tax relief and it all came crashing down.  I have to ask who came up with this "great idea".  Sounds like more of the same.

Do I want buyers protected? Yes, but that's why we have inspections done.

Posted by Ricki Eichler McCallum, Broker,GRI,ABR, - Your Coastal Bend Home Source (CastNet Realty) about 10 years ago

Angelia, This isn't just upsetting sellers, it's upsetting a lot of agents too.  Even though we're not a party to the contract, we have to ask the hard questions when we walk into a beautifully updated house and see if the seller will disclose the dollar amount if the repairs are less than a year old.

Kristin, Thanks!  I hope all the agents in your market were given this information as I think Texas dropped the ball on letting us know it was coming.

Capital District, I agree it's not going to fix the issues at hand.

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) about 10 years ago

What is the TAR number of the new addendum?

Posted by Carol Knott (RE/MAX The Woodlands & Spring) about 10 years ago

Ricki, You wanna know who did this??  David Weekly Homes drafted the addendum and paid for the lobbying of it.  They were sick of being sued.  Gee, why don't you build a better house if you're sick of being sued?  Don't put home owners in the same category as you!!

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) about 10 years ago

Parked while I gather some additional information.  I read about it last December when the addendum was approved and again while I was working on my broker's license.  Need to look further.

Thanks for the reminder.  This year is flying by way too fast.

Posted by Amanda Evans, Real Estate Broker - Fort Worth Texas (DFW Living) about 10 years ago

Carol, TAR 1927 and TREC 43-0.  It's called Addendum Containing Required Notices Under 5.016, 420.001 and 420.002, Texas Property Code.   It's a long title.

Amanda, I thought it was just an addendum to give notices to the buyer, which would replace the other form that gives notices to the buyer, in addition to the disclosure notice which is already a notice to the buyer also.  How many notices do we need?

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) about 10 years ago

Donna,  I'm with you.  Why don't they build better and the State look at those doing wrong instead of hurting everyone with a blanket change like this.

Posted by Ricki Eichler McCallum, Broker,GRI,ABR, - Your Coastal Bend Home Source (CastNet Realty) about 10 years ago

There is a podcast about it at the TAR site.  Just FYI. 

Posted by Amanda Evans, Real Estate Broker - Fort Worth Texas (DFW Living) about 10 years ago

Donna,

The builders have been lobbying themselves out of lawsuits for years. Perry Homes founder has donated a ton of money to many higher ups for what the media says might be the same reason.

Nothing will change. Too many agents won't even know about this addendum or use it.  Most "flippers" will say they spent much less to avoid the crux. And yes, more patching & shotty efforts will continue. 

Good luck getting receipts & coppies of legit anything from the listing agent. I've never had any luck doing so. What chaps me is when an investor advertises through his listing agent that "over 50k improvements were made" but when you ask for receipts they crawfish, clam up and get sassy.

Good post, but the subject likely pertains to Texas...I'll flag it anyway.

 

Posted by Greg Nino, Houston, Texas (RE/MAX Compass, formerly RE/MAX WHP) about 10 years ago

Ricki, Because anyone can get a builder's license, and if they get it revoked, they can start a new company name and apply again.  No "hard" criteria.

Amanda, I'm going to have to watch that when I get a few minutes, thanks.

Greg, Yes, it's a Texas addendum, however, I posed a question to everyone asking if their state has such a thing and how do they handle it, so it goes beyond Texas.  Texas can't be the first to do something like this.  I think CA has something like this too, but not definite.  And it's very sad that you're right that many agents won't have a clue about this. I, on the other hand, will be having my sellers sign it and will attach it to the listing within the MLS.

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) about 10 years ago

I am an investor and I can say this is good and bad. I don't disagree that some investors are out to (^*&%* the customer but I think the limits of the warranty should be changes. Possibly we should iimplement that they require a inspection on the entire home and hold the inspectors to fault if there is a future problem. Bottom line is we all must suffer because of the questionable business practices of a few.

Posted by Keith Rogers (Accurate Credit Experts) about 10 years ago

Hey Donna, thanks for the insight. I am surprised I had not heard about the new addendum. Our office manager is usually very proactive in keeping us abreast of TREC form changes and their impact on the real estate business.  The idea of a warranty is a good thing but in reality how is the homeowner going to hunt down the previous owner when a warranty item needs to be handled.

Posted by Jill Wente, Realtor, CRS, MCNE, CHMS (Better Homes and Gardens Real Estate | Gary Greene) about 10 years ago

The more I think about this document the more it doesn't make sense.

It isn't relative on a practical level. 10k on a 90k is not the same as 10k on a 600k home! Won't the seller/investor just pass this "cost" of warranty off to the buyer, thereby bumping up the price? Is it requried to accompany a 1-4 even if it doesn't apply. I guess I need to read Title 16.

Who has more clout? Realtors or Builders? I'm trying to remind myself that TREPAC is cool right now.

I'm calling TAR.

Posted by Greg Nino, Houston, Texas (RE/MAX Compass, formerly RE/MAX WHP) about 10 years ago

Check out the podcast for more info...this isn't as bad as it seems.  It's Episode 21 from April 28th. 

Posted by Amanda Evans, Real Estate Broker - Fort Worth Texas (DFW Living) about 10 years ago

This seems crazy. When we moved to Illinois, we bought a house and updated nearly everything...new hardwood floors, new kitchen, paint, light fixtures, etc. More than $10,000 in improvements. We moved in in March, and by October the same year we knew we didn't like the neighborhood enough to stay there so we put the house on the market. So we would have been classified as builders under your new requirement...absolutely silly...and just how is your average homeowner supposed to come up with a builder's warranty anyway?

Posted by Kelly Sibilsky (Licensed Through Referral Connection, LTD.) about 10 years ago

I personally don't like it.  I think if a person wants to be a flipper then they should be allowed to do so without the builder classification.  They are providing a better product than the one they bought to start with and at most they should provide a one year home warranty since they didn't build the house.  A 10 year warranty equal to a new home builder is overkill.

Posted by David Slavin, CDPE, ABR, SRES Keller Williams Premier (Keller Williams Premier) about 10 years ago

Donna,

I spent some time researching this ...

The $10,000 limit is only for non material adjustments. For example, you can spend as much money as you want on granite, dry-wall, paint, carpet and repairs an so on.

Material adjustments do include anything that changes the square footage of the home such as increasing room size, structure, roof & perimeter walls in a the living space....

So you can spend more than ten grand and not necessarily be required to provide the Statutory Warranties.

The pod cast on TAR fills in all the holes.....

Great stuff..

Posted by Greg Nino, Houston, Texas (RE/MAX Compass, formerly RE/MAX WHP) about 10 years ago

Greg, you haven't read the actual addendum.  It says, "a material improvement to an existing home or certain improvements to the interior of an existing home and the total cost of the improvements is $10,000 or more..."  The "certain improvements to the interior" are all the remodeling things of the inside.  My broker has already spoken with our attorneys who have spoken with TAR about this as my broker and office manager do investment properties and they had a house in question.  This is not just about structure stuff, according to our attorneys.  Have you spoken with your broker's attorney or TAR?  I would love to know what they have to say in case it's different.

David, I agree!

Kelly, I know!  I've had to sell homes from people who decided they didn't like the area.  It's going to be sticky in the future.

Amanda, I'll get to it once Alyssa goes to bed.

Jill, I was very surprised we didn't hear about this until recently also.

Keith, If sellers can provide invoices with warranties for work, I think that should be good enough.  But not more people saying, "I don't have an invoice for that work done."

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) about 10 years ago

Donna - I listened to the podcast and spoke to an attorney. I guess we never thought of "reading the addendum." Let me go do that, then come back with a more accurate answer.

Just listen to the Podcast...maybe you'll understand what I'm hearing.

Posted by Greg Nino, Houston, Texas (RE/MAX Compass, formerly RE/MAX WHP) about 10 years ago

I just listened to it.  It is so different than what was presented in our meeting, that came from the attorneys...  This is frustrating.  I'll be calling my broker in the morning to get to the bottom of this.  We were told that the "certain improvements to the interior" were all about remodeling kitchens and bathrooms and typical interior improvements.  The podcast does also state that the rules are slightly different for investors who are buying the house to fix up who starts out with no intentions of living in the home.  How can they differentiate?

Thanks, Amanda, for bringing the podcast to my attention.  I'll be back with more info tomorrow.

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) about 10 years ago

Oh, and the podcast also mentioned that this is just the form to use for now and that it's very poorly written, but that they're redoing everything in 2009.  How does that make everyone feel better?

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) about 10 years ago

No. It concerns me that they conceded to writting a poor document, not to mention 3 other documents that contained "errors."

I do feel better finding the podcasts which is a result from your blog. Thanks again.

Posted by Greg Nino, Houston, Texas (RE/MAX Compass, formerly RE/MAX WHP) about 10 years ago

Yes, it concerns me too that we were given copies of the new contracts and there were several errors.  And what also concerns me is that the podcast was supposedly about what the addendum was supposed to say, but it's not what it does say.  I think there are going to be lots of law suits for improper interpretation.

Part of the summary I received was, "An individual who builds a home or a material improvement to a home and sells the home immediately following completion of the building or remodeling and does not live in the home for at least one year following the completion of the building or remodeling is responsible as a builder under the warranty obligation created by this title for work completed by the individual.  Responsibility under this subsection does not automatically require an individual to register under Section 416.001."

I typed all that because the podcast was saying all "builders" and most investors need to register with the state, but this summary says "...does not automatically require an individual to register..."

VERY poor podcast of explanation when that's not what the document says.

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) about 10 years ago

Donna.  I look forward to hearing more info about this in the coming days/weeks.  (With the preface that I have done absolutely NO investigation into this and could be totally talking out my posterior) From a pecuniary standpoint though, this *MAY* be much ado about nothing when you look at it in terms of the current practice of negotiating contracts with Home Owner Warranties.  As I understand it, most 2-10s are 2-3 bucks per thousand dollars sales price, or in other words, $200-300 per $100K sales price.  You figure 99.9% (at least in my experience) of resale contracts have sellers paying for HOWs (typically $450-600).  You also figure that if the seller has to provide a 2-10, he/she's not providing a HOW (2-10 covers alot MORE than HOW, right?).  Consequently, you figure up to $300K (maybe as little as $200K), the seller is actually breaking even providing the 2/10 in lieu of the HOW.  So somewhere between $200k and $300k, the seller's expense is growing 200-300 bucks per $100K, or roughly a quarter of one point per $100K. 

Repeating the disclaimer that the extent of my info is what I've read above, I think even the worse case scenario will not be a terribly big blip on anyone's screen.

Leonard

Posted by Leonard Thomas (RE/MAX Dallas Suburbs) about 10 years ago

I'm calling Legal tomorrow as well to see what they have to say.  My guess is if we both hear and understand the same thing, then we might just all be on the same page addendum. :)

Posted by Amanda Evans, Real Estate Broker - Fort Worth Texas (DFW Living) about 10 years ago

OH...very interesting! I wish we'd adopt some changes like this to our contract. Go TEXAS!!! GBU!

Posted by Elizabeth Nieves, Bilingual Raleigh - Durham North Carolina Real Estate Team (The Elizabeth Nieves Realty Group) about 10 years ago

Leonard, We discussed the 2-10 today, and apparently they don't really cover much which is why they want "builders" to register so the TRCC can take over and take the steps to see if further stuff is needed.  Sounds very convaluted to me.

Amanda, I've never gotten through to anyone on the legal hotline, but I think I'll keep calling until someone calls or returns a call.

Elizabeth, From what we're trying to figure out, thus far, it doesn't sound like something you would want in your contracts.  This is messed up!

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) about 10 years ago

I must be in a twilight zone because I am a Texas Realtor, just took a legal update class and this was never mentioned.  Plus, I haven't read it in any Realtor publications that I get.  is this something they jut kinda snuck in on us maybe?

Posted by Karen Staha, CRS, GRI, ABR, REALTOR, Austin & Surrounding Areas Texas (Gaston & Sheehan Realty) about 10 years ago

Chasing off investors doesn't sound like a good idea. We are also going through some contract changes, but we are really only adding language to enforce what our contracts already say. Take care.

Posted by JL Boney, III, Columbia, SC Real Estate (Coldwell Banker) about 10 years ago

Karen, According to the podcast, this stuff was all passed in 2005, but wasn't written well enough to be enforced, so they rewrote it to b what it currently is just to get it out, but have planned a rewrite for 2009.  So, yes, I think they snuck it in there at the end of the session.

JL, No, it's not good to chase off investors, though it is good to make them more responsible for their rehabs.

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) about 10 years ago

I did call the legal hotline this morning, and I'm awaiting a call back.  I've also called my broker and will await his call as well.  I'll repost when I hear something further.

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) about 10 years ago

I guess we really need to know the definition of improvements for this form.  I had heard this was only to be used for structural changes(improvements) to the property.  It didn't include carpet, paint, granite, etc.   The house already had existing flooring, paint and countertops so these changes were just "updates", not improvements.

And to make the issue more murky, the Sunset Commission has recommended abolishing the Texas Residential Construction Commission.  Not sure how that will affect the new addendum. 

Donna, I'm interested to hear what you learn for the TAR lawyers.

Posted by Linda Box Taylor, Your Plano, TX Realtor (Castle Connections Realty) about 10 years ago

Linda,

I can't imagine the VP of legal affairs will be misspoken. The document itself isn't inaccurate, it's just not user friendly for anyone but attorneys.

This is my take: Letter A would be used if the seller has built the home "himself" and should be checked if seller "lived" in the home for at least 1 year prior to the repairs..

Letter B & C needs to be checked off if you haven't lived in the home for the year prior and you have made changes to the home in excess of $10,000 that include foundation, roof, perimeter and living area that can change the square footage.

The confusion was and probably will continue to be the definition of material improvements especially by those that will assume they know what it means.

If the buyer does not sign this document where it applies, then the seller gives the buyer the opportunity to "walk away."

We shouldn't have to scramble, call legal, debate, call our broker, and dial into TAR to understand 1 document. This is silly.

Posted by Greg Nino, Houston, Texas (RE/MAX Compass, formerly RE/MAX WHP) about 10 years ago

OK, So I got a call from a gentleman whose name I will not reveal because he spent an hour on the phone the other day with a guy about the same issue, and still has no idea what it's saying.  He said it's what the podcast says because, "It was probably my boss on the podcast and he knows what he's saying."  I read the sentence about interior improvements, and he's like, You've got a point, but that's not what it's "supposed" to mean.  Huh?  It says one thing but actually means another.  He very politely tells me to call back and ask for Lori who actually worked on the legislation...

I spoke with Lori.  Great conversation.  She said the addendum says one thing, but actually means something different, and they're hoping to change the wording in January's meeting.  I asked her how it was supposed to be held up in court if the meaning is something different than the words.  She said that we'll have to see the first time it goes to court.  She said that with so many people's interpretations of the meaning, it probably wouldn't get very far in court.

She said it's about adding to the footprint and/or changing the roof line ONLY!  She said foundation work isn't adding sqft.  Adding a "covered" patio that changes the roof line is included.  However, she said that if you're hiring a contractor, they will provide the warranty and the home owner doesn't have to do anything.  I asked several questions, and it boiled down to the addendum being written wrong,  but they had to get something approved, and it will be changing.   She told me to read section 401.002 17-A of the property code and to combine it with 401.003.  She said "improvement" is a word that needs to be better described. She couldn't explain why the word "remodel" was in the addendum since remodeling isn't part of this because that's not an "improvement".

Anyway, she used the word "ambigous" many times, and said to keep an eye out for the change in 2009, but that this will probably be going away as quick as it came since the TRCC will probably be going away as well...

I'm still waiting to hear from my broker!  (deep breath)

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) about 10 years ago

I understand it as the following:

$10000 or more worth of work done to a non-owner occupied property performed by an unlicensed or non-registered trade that effects the square footage, roof line or slab of a property now requires the addendum become part of the contract.

I think it has a larger impact on the weekend warriors who should stick to arm chair quarterbacking on Sundays rather than installing plumbing in the new bathroom.

Posted by Amanda Evans, Real Estate Broker - Fort Worth Texas (DFW Living) about 10 years ago

Amanda, I would have to disagree with your assessment.  It doesn't matter if they're unlicensed or non-registered.  It also doesn't only apply to non-owner occupied.  If an occupied homeowner added a room onto his house and then only lived there for 10 months instead of at least a year, he would have to provide warranties, and if he's adding on a room, I'm sure he had to get permits from the city and also work with licensed electricians and contractors to build the addition to code.

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) about 10 years ago

Okay so whose on second?

Posted by Greg Nino, Houston, Texas (RE/MAX Compass, formerly RE/MAX WHP) about 10 years ago

I just got off the phone with my broker. He swears the "certain improvements" have to deal with remodeling stuff like flooring, paint, counters, etc... because one of the local associations spoke with TAR at the convention that they specifically said that.

So, I called Lori at TAR back and asked her more questions. She says NO, it does not include anything where you're changing out components of the house that are already there.

Again, this is SOOOO frustrating, but it seems like the bottomline is that the addendum itself is worthless and use at your clients' own risk.

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) about 10 years ago

Donna, Just one question. Where was our great TAR legal team on this blunder?   Well I have added question#2 Why is the addemdum not listed on the TREC contract & forms list??

Posted by Don Eichler (Eichler Properties) about 10 years ago

Don, I found the addendum in my ZipForms.  You might want to look again.  Have you done the most recent update?  As for the other question, TAR claims they were there and fighting for something that made sense, but it wasn't achieved.  I was told that there were other drafts that were even worse, and they're going to fight again in January at the next session.  I was also told that I should get a bunch of my buddies to show up and help fight it to make sure it makes sense.

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) about 10 years ago

Donna,  The 12-10-2007 Addendum does not refer to the home owner but to whoever he may hire to do repairs to the home.  It does not mean that a homeowner needs to be licensed as a  contractor but the builder or re modeler needs to be licensed or hold a certificate from TRCC.

Posted by Don Eichler (Eichler Properties) about 10 years ago

Don, You need to read the full information that goes along with the addendum which is mostly in all the property codes previously mentioned above.  This DOES apply to a homeowner, mainly if the homeowner does NOT live in the house for more than 1 year after doing the "improvements".

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) about 10 years ago

What if I've been living in Rio de Janeiro for the last 12 months and a day, and my home hasn't been occupied since ? And I want to return to America to live in my house....do I have to apply for a builders permit to remodel my own home ? Sounds as though the dollar limit could also affect the quality of the repairs undertaken and restrict a more thorough remodeling effort on the part of the owner. And what about the potential for a lease to purchase option undertaken and a tenant's been in the house for the last year while I've been in Brazil suntanning ? Boy, those crazy legislators !!! Desperate times and desperate people.

Posted by David Saks about 10 years ago

Donna, You need to listen to the pod cast again.  Also The Texas Residential Construction Commission rules Administrative Code page one (E) clearly states that The Term Builder Contractor does not include any person who: (i) has been issued a license by this state or any agency of this state to practice a trade or profession related to or affiliated with residential construction if the work being done by the enity or individual to the home is solely for the purpose for which the license was issued; or sells a new home and: does not construct or supervise or manage the construction of the home a homeowner or to a homeowners real estate broker,agent, interior designer, interior decorator or property manager who supervises or arranges forthe construction of an improvement to a home owned by the homwowner.  etc  

Even if you do not fall under the above and do not change the footprint or square footage of the home no matter how much you spend it does not fall under the license requirement. 

The addendum is very simple.

Posted by Don Eichler (Eichler Properties) about 10 years ago

I dont mean to step away from the topic. However, I have to be the first to say Congratulations for hitting 300,000 points coming up. what a remarkable acheivement

Posted by James Wexler (wexzilla.com) about 10 years ago

David, I think you're miss understanding.  The 1 year only comes into play if you want to sell your home.  You can live wherever you want and come back and remodel your home.  However, things start becoming sticky if you decide to live there less than a year at that point.  And we cannot do lease-options, only attorneys can, so I don't see that coming into play as an attorney is going to protect his client as much as possible.

Don, I've listened to the podcast a couple of times, and I've spoken with the legal hotline and the main lady who worked on the legislation, and I'm just going to say you're misunderstanding the issue and leave it at that.

James, THANK YOU!  I hadn't even noticed.  I knew I was in the 290's, but didn't realize how close I was.  Thanks for noticing!

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) about 10 years ago

Donna, You just don't get it. Read the TRCC rules. Enough said.

Posted by Don Eichler (Eichler Properties) about 10 years ago

Don, I DO get it, and I spent hours on this the past two days.  Trust me, I get it more than I wanted to get it.

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) about 10 years ago

Reading all these responses made me very tired and confused.  I also have had many conversation with TAR legal hotline about this subject.

I think the law will be rewritten and they will ask TAR to assist them.

Also I would like to point out there is no such product as ZipForms it's ZipForm, please drop the "s"

 

Posted by Richard Weeks, REALTOR®, Broker about 10 years ago

Paul, The warranties, in and of themselves, are not that expensive, however, they don't cover much and just like a home owner does with a regular builder, they contact the actual builder for "anything" that first year, and mechanical stuff the second year.  The main builder warranty is mostly, if not entirely, for structural stuff.  I don't need someone calling my seller because a hinge happened to fall off a cabinet when they could get a screwdriver.  I don't need someone calling my seller because a settling crack appeared in the A-frame when it's very typical to happen, and hard to prevent.  Clay soil, we're constantly moving and two pieces of wood are always moving and rubbing up against each other.  It's a circle, and we play the dance as we go round and round.

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) about 10 years ago

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