Attorney Trey Wilson - RL Wilson Law

31 August 2008

FAQ – State Inspection Process (formally called the State-Sponsored Inspection and Dispute Resolution Process, or SIRP)

What is the state inspection process?
During a state inspection, an independent third-party inspector looks at alleged defects that are under warranty. The state inspection process provides a homeowner and builder/remodeler a final report issued by a professional engineer, architect or certified inspector. The findings in the report carry legal weight if any future arbitration, mediation or litigation occurs. Since the report can be used in a legal action, the costs for expert witness fees should be reduced greatly if not eliminated.

The commission uses professional third-party inspectors. The independent inspector compares the alleged defect to the building and performance standards. The commission uses three types of inspectors. One type handles workmanship and materials issues. Another type handles structural issues. If there are both structural issues and unrelated workmanship and materials issues, the commission will assign an inspector who is qualified to inspect both types of alleged defects. If the third-party inspector finds a problem, the inspector will recommend a repair. Either person may appeal the inspector’s report.

If a defect is found, the law expects your builder/remodeler to make a repair offer. The offer can be based on the inspector’s report or those of the appeal panel, if the report was appealed. You can accept or reject any offer your builder/remodeler makes.

If you still can’t resolve the dispute after the required state inspection, either person can still pursue other legal remedies.

How does the state inspection process work?

The process actually begins before anyone submits an inspection request to the commission. A homeowner who believes their home has post-construction defects must submit a written notice of alleged defects to the builder or remodeler at least 30 days before the inspection process can begin. Once the homeowner has notified the builder of alleged construction defects, the homeowner must give the builder a reasonable opportunity to inspect the alleged defects.

Typically, a homeowner who is not satisfied with the builder’s response to the written notice of the alleged defects files an inspection request. However, builders can file inspection requests, too. In nearly all cases, builders and homeowners must use the inspection process before turning to other civil remedies. A homeowner is not required to use the inspection process before pursuing civil remedies if a builder was not properly registered when the parties entered the construction contract or if the commission has revoked a builder’s registration.

Once the commission receives an inspection request, commission staff determines if the request is eligible. If the request is eligible, the commission assigns a third-party independent inspector to inspect the alleged defect(s) described in the request. The commission appoints third-party inspectors on a rotating basis from a list of certified third-party inspectors. The third-party inspector gathers information from the homeowner and the builder. The inspector then conducts an inspection to evaluate each alleged construction defect to determine whether the home is in compliance with applicable building standards.

Either the homeowner or the builder can appeal to the commission for a review of the third-party inspector's findings by a panel of state inspectors. At the end of the inspection process, the builder or remodeler should submit the homeowner a written offer of settlement, pursuant to the Residential Construction Liability Act (RCLA). Then the settlement provisions of RCLA come into play. If there is no satisfactory settlement, the homeowner can then pursue other legal remedies.

Does my builder have to fix my house if a defect is confirmed?
For inspection requests filed after September 1, 2007, the statute authorizes the commission to fine any builder that repeatedly fails to make an offer of repair after a commission-appointed inspector has affirmed that there are construction defects. The commission can also fine any builder that repeatedly fails to make good on a repair offer.

Will the inspector sit down with the builder and homeowner to help settle differences?No. The inspector is not in a position to mediate with a homeowner and builder. While the commission has no formal mediation process to offer, it does employ a team of ombudsmen. The commission’s ombudsmen work with the homeowner and builder to help achieve a resolution to a dispute.

Can my builder file an inspection request?
The inspection process is available to builders and consumers.

My builder requested an inspection. Do I have to participate?
The commission cannot make a homeowner participate in the inspection process if the builder files an inspection request. On the other hand, if there is a dispute over an alleged defect that is in its warranty period, the statute requires the parties involved to proceed through the inspection process before accessing arbitration or the court system. Therefore, the penalty for a homeowner who refuses to participate in the process is that according to the law a homeowner cannot pursue other legal action against the builder arising from alleged defects if the homeowner does not first go through the inspection process.

If my builder makes a repair, how do I know they did it correctly?
When a builder completes a repair as a result of the inspection process, the builder must rehire the same inspector who initially inspected the alleged defect to inspect the repair.

Can the builder provide a monetary offer instead of a repair offer?
Yes, although the builder is not required to do so.

Can I pick the subcontractor that’s going to fix my house?
You are not obligated to accept a builder’s repair offer. If you refuse and are doing so because you don’t wish to use a particular subcontractor, let the commission and builder know. To achieve a resolution, the builder may offer to let you choose your subcontractor, choose from a list of potential subcontractors or allow you to present a list from which the builder can choose.

What will it cost a homeowner to file an inspection request?
Statute requires that the party filing an inspection request must pay a fee associated with the third party inspection. The fee for a homeowner to start the inspection process is $250. The commission reimburses the homeowner, however, if the third-party inspector's findings confirm even a single defect. The commission may also reduce or waive fees for those who show financial need. If the inspector confirms a defect, the builder/remodeler is responsible for the actual inspection fee.

If a builder/remodeler requests the inspection, the fee for a workmanship and materials inspection is $450, a structural inspection is $450, and a joint inspection of a structural issue and an unrelated workmanship and materials issue is $800.

How does a homeowner file an inspection request for a workmanship and materials or a structural defect-related issue?Fill out the Inspection Request form and mail the form to: P.O. Box 13144; Austin, Texas 78711-3144 or by fax at (512) 463-9507.

What is the deadline for a homeowner or builder to submit an inspection request?
You must submit the request on or before: the second anniversary of the date the claimed construction defect was discovered, but not later than the 90th day after the date the applicable warranty period expires; and not later than the tenth anniversary of the initial title transfer from the builder to the owner of the home. If there is no title transfer, you must submit the request by the tenth anniversary of the date on which the contract for construction of an improvement was entered into.

Does the homeowner have to let the builder inspect the alleged construction defects before making an inspection request?The homeowner must notify the builder in writing of each alleged construction defect at least 30 days before submitting an inspection request to the commission. The homeowner also must provide the builder a reasonable opportunity to inspect the alleged defect.

What information must the request include?
The request must provide a fairly detailed description of each alleged construction defect. The request must include the following information (if known or available): the amount of known out-of pocket expenses and engineering or consulting fees the homeowner incurred in connection with each alleged construction defect; if there is one, a copy of the contract between the homeowner and the builder; evidence of the cause and nature of each alleged defect including the nature and extent of repairs necessary to remedy the defect (for example, expert reports, photographs and videotapes); the signed contract and written warranty (if one was provided); proof of 30-days notice provided to the builder; and the name of anyone who inspected the home in connection with the alleged defects on behalf of the party submitting the request.

A requestor does not have to have this information to submit a request to the commission. Required inspection fees offset the cost of the third-party inspector and must be submitted with the request.

If a homeowner goes through the process, can the homeowner still take legal action against a builder?
Yes. At the end of the inspection process, the third-party inspector issues a report that identifies if there is a construction defect that the builder should address. If the homeowner is not satisfied, he or she can pursue arbitration or litigation — depending upon whether the homeowner's contract with the builder contains a binding arbitration clause. The inspector's report creates a rebuttable presumption and can be part of the record in any subsequent legal action. Basically, a rebuttable presumption means that the inspector’s findings carry a lot of weight if future legal action is necessary.

If a residential construction dispute results in an arbitration award and that award is filed in a court of competent jurisdiction, the filer must file a summary of the award with the commission no later than 30 days after the award is filed as a judgment.

I don’t agree with what the inspector’s report says. Can I appeal?
Yes, you can file an appeal. In fact, either party may appeal the inspector’s findings or recommendations on or before the 15th day after receiving the inspector’s report. A three-member panel of state inspectors (commission employees) considers the appeals. The appeal panel reviews the third-party inspector’s recommendation and may either approve, reject, modify or remand the inspection to the third-party inspector for further action. The panel also reviews the inspection process to make sure it complies with the law.

What can I appeal?
Essentially, you can appeal the findings and conclusions of the inspector, the standard applied or the repair recommendation on or before the 15th day after receiving the inspector’s report. The appeal panel cannot review any new material or information that was not made a part of the record. A party to an inspection request must provide all of its supporting documentation and any background, general or additional information to the third-party inspector for consideration when the inspector writes the report. The appeal panel reviews the inspector’s report and the record of material he considered or had available to consider when he wrote the report to determine if the inspector’s findings and recommendations are supported by the evidence.

I think my builder is using shoddy materials during construction. Can I request a state inspection immediately?
The commission’s inspection process only is available when what is at issue is an alleged post-construction defect. However, a homeowner should address any concerns with the builder as soon as they arise. Many times, your city building official can help.

After the homeowner receives the title to the house from the builder, the homeowner can submit an inspection request to the commission after providing the builder 30-days notice of the alleged construction defects and giving the builder an opportunity to respond. Commission staff will review each inspection request to determine whether the alleged construction defect is eligible. Only allegedly failing items that an inspector can view without removing wall coverings or destroying the fit and finish of a home are eligible. However, if one of the parties is willing to pay for the removal and replacement of wall coverings, or other destructive testing, the inspector can use the test results.

Does the inspection process include personal injury claims?
No, the inspection process applies only to post-construction defects, not to personal injury claims. A homeowner is free to pursue those claims through other legal venues.

Can I hire an attorney to represent me during the inspection process?
Hiring an attorney is optional. Anyone involved in the inspection process may seek legal representation. Most builders have the resources and foresight to hire an attorney. Owners should hire a lawyer with knowledge and experience of the TRCC process and the laws concerning residential construction. San Antonio Trey Wilson has served as the homeowners' lawyer in numerous TRCC complaints, and in lawsuits against builders. Trey Wilson is an experienced lawyer with a history of helping homeowners achieve resolutions in defective construction claims, and in securing releases of improperly filed construction liens. Trey Wilson is the principal lawyer of R L Wilson, P.C. Law Firm in San Antonio. He may be reached at 210/223-4100 or

Trey Wilson --Named By Scene in SA Magazine As One of San Antonio's Best Real Estate Litigation Attorneys -- September 2008 -- As voted on by peers