Update Your Construction Contracts

September 23, 2009

Given the Texas Residential Construction Commission was sunset on August 31, 2009, now, more than any year prior, it is imperative that Builders update the residential construction contracts.  Failure to do so can result in warranty obligations far more reaching than one might expect.

Prior to the implementation of the TRCC, Builders were subject to the “implied warranty of good and workmanlike construction.”  This warranty was nebulous and difficult to satisfy as it meant that Builder was obligated to warrant the house according to the usual and customary standards.  The problem, however, is no one knows how to identify these standards.  In fact, the Courts and Arbitrators are forced to rely on expert testimony to determine the standards.  The result of this problem is that the outcome of a construction defect lawsuit was dependent on the experts and Judge/Arbitrator, not a uniform building code or performance standards.

One of the primary purposes of the TRCC was to establish a uniform standard of construction by which all construction could be evaluated. Consequently, the State promulgated a Limited Statutory Warranty and Building and Performance Standards that identified the manner in homes were to be built and evaluated.  Now that the TRCC is being abolished, this Limited Statutory Warranty will no longer be applicable for new construction and we will be forced to revert back to the implied warranty of good and workmanlike construction to evaluate construction defect cases.   

As a result, Builders are encouraged to update their contracts to identify a clear, specific and sufficiently detailed warranty that establishes the only standards of construction.  Further, Builders should consider attaching an express warranty (similar to the old TRCC Warranty) that satisfies this requirement.  If the Builder fails to incorporate such a detailed warranty, it is likely that the implied warranty of good and workmanlike construction will continue to apply.

In addition to amending your warranty obligations, Builders should ensure their contract now contains the disclosure required by Chapter 27 of the Texas Property Code (RCLA Disclosure) but omits the previously required TRCC disclosure language and TRCC builder number.  These new changes should be incorporated into the Builder’s contracts by September 1, 2009.  While this article cannot address each issue that should be updated this year, it does identify the main points that should be amended.

Third-Pary Warranties Following the Loss of the TRCC

September 23, 2009

Without question, one of the more surprising acts of the 81ST Legislative Session has been the discontinuation the Texas Residential Construction Commission (TRCC).  As many of you have heard, the TRCC will not accept any new registrations, complaints or requests for inspection after August 31, 2009.  Thereafter, unless the Texas Legislature provides for a shortened wind-down period, the TRCC will cease to exist on August 31, 2010.

Given the dissolution of the TRCC, the obvious question is what happens next?  How do builders protect themselves given that the TRCC’s Limited Statutory Warranty and Performance Standards are no longer applicable?  Can a builder establish a uniform standard for construction against which its work will be evaluated?  The answer to this last question is yes and it lies in the terms of a third-party warranty.

Even though the TRCC and the Limited Statutory Warranty and Performance Standards have been abolished, this does not mean that Texas builders are relieved of their responsibility to provide a structural warranty for up to ten years.  One of the ways in which a builder can protect itself against the exorbitant cost of repairing a major structural defect is to purchase a third-party warranty.

A third-party warranty typically establishes the construction codes by which the home is to be built and it identifies the performance standards against which your work will be evaluated in a lawsuit or arbitration.  Further, while terms and conditions apply, the third-party warranty may also pay the cost of performing covered structural repairs.

Without a third-party warranty and a well written contract,

(a) the quality of your work will be evaluated according to the vague usual and customary standards, which are next to impossible to satisfy and

(b) the cost of required structural repairs will be the sole responsibility of the builder. (Of course, terms and conditions apply.  Please see the third-party warranty for further details).

Now more than ever it is important for Texas builders to protect themselves against major structural defect claims.  In my opinion, one way to protect yourself against such claims is to purchase a third-party warranty.

Cost-Effective Training For Your Employees

July 25, 2009

How to Educate Your Team and Save Time, Money and the Planet

Your employees are a very special asset of your business.  Trained employees are essential to improving your business and increasing your bottom line.

Online training is the most cost-effective way to educate your employees and team members.  Online training is very beneficial to employees and offers the following incentives:

1. Employees can learn at their own pace
2. There are no travel expenses incurred
3. There are no carbon emissions caused by online learning!

In his book, The Starbucks Experience, Joseph Michelli documents that “Starbucks consistently spends more on training than it does on advertising.” (McGraw-Hill, 2007, page 8).

Everyone in your company is a sales person.  From the receptionist, to the sales team, the supervisors out in the field and customer care individuals.  One of the greatest advantages of a trained team is that they will all speak the same language.  This will give your customers a seamless experience throughout all the facets of the customer experience.

Online training is the most “green” way to have your employees trained, reduce your overhead expenses and keep everyone on the same page.

Live green and train green!

Unclutter, Prioritize and Enjoy Life!

March 1, 2009

How to Organize Your Life and Be Happy

With the plethora of benefits from the information age, the monster of “busyness” crept in so subtle causing almost everyone in the planet to conform to a lifestyle of work around the clock!

We now face a huge battle to regain our freedom, enjoy work-free weekends and live a lifestyle of simplicity.  This can be a tremendous challenge for people who work from home to separate life and work.

What can you do to take charge of your life again and have time to stop and smell the roses?

Here are some simple steps that you can take to accomplish just that!

1. Set Parameters

Establish a system that guides your daily routine.  Follow a daily schedule of what you want to live out your life throughout the day.  Set a specific time twice daily to check your emails and voice mails, for example, this could be at 11AM and 4PM.  If you do this, inform the people you work with or your clients of your new organization to make your day more productive and free of interruptions.

To be even more productive, you may want to consider hiring a virtual assistant to help you with office work and check your emails filtering the ones that are most important for you to reply or work on.

2. Create a Master To-Do List and Prioritize It

Make a list of all the things you need to do, from mailing payments, to writing that book that you have been wanting to for years!  Each evening, go through the list and select the items that you will work on the following day.  This will help save you time that could go wasted the next morning when you are trying to figure out where to put your attention and efforts in for the day.

Select the top three or four items from the list that require the utmost attention and need to be complete with urgency.  Of these three or four items, prioritize the list.  Work on the most difficult tasks first.

3. Close Shop on the Weekends

You may be thinking that you just could not do that.  However, you will be surprised how people will respect your privacy and established policies when you inform them and stick to your guns.  Of course, there could be incidents that emergencies could occur, depending on the type of work you do.  Still, even for this, you could be creative and figure out a way to have someone trained to put out fires for you on the weekends.

One of the hardest things for business owners to do is to turn off their cell phones on the weekends.  However, this is vital to maintain a healthy balanced family life by nurturing the relationship with your loved ones.

4. Take Mini-Vacations

There is no need to wait for an entire year to take time off.  You can practice taking mini-vacations two to three times per year to recharge and nurture your family life.  Search online in your local area to learn about activities that may be free or low-cost.  Sometimes we want to see the world outside the area where we live, when we could have some good places to visit and have fun locally!

Adding structure to your life will relieve unnecessary stress, increase your productivity and improve your connection with those you love most!