TRCC: Third-Party Warranty Providers Must Register

Third-party warranty companies that provide services for Texas homeowners on behalf of builders/remodelers must now register with the Texas Residential Construction Commission. The companies must adopt the commission’s required warranties and building and performance standards. In in order to register, third-party warranty companies must be at least one of the following: An entity that has operated warranty programs in Texas for at least five (5) years; a company whose performance is insured by an insurance company authorized to engage in the business of insurance in the State of Texas; or an insurer as defined under §4001.003 of the Texas Insurance Code that insures the warranty obligations of a builder under the Act as implemented under Chapter 304 of the commission’s rules.

Effective June 1, all residential builders and remodelers must provide limited warranties and meet adopted building and performance standards for each home construction project. The warranty periods are: One year for workmanship and materials; two years for plumbing, electrical, heating and air-conditioning delivery systems; 10 years for major structural components of the home; and 10 years for the warranty of habitability.

Commission Executive Director Stephen D. Thomas said builders/remodelers may provide these warranties directly to the homeowners or contract a third-party warranty company. If the builder or remodeler chooses to contract a third-party warranty company to provide coverage, the builder or remodeler must ensure that the third-party warranty company is registered with the commission. Likewise, it is the responsibility of third-party warranty companies providing coverage and/or repairs for builders/remodelers to make sure they have registered with the commission.

Detailed information on the adopted Limited Warranties and Building and Performance Standards, as well as third-party warranty company rules, registration forms and instructions are available on the commission’s Web site at www.trcc.state.tx.us.