The Texas Legislature was unusually active in its 88th session. From this flurry of activity emerged the most important legislation for the Texas home-building industry in 30 years. Let’s look at what it does, how it affects you, and how 2-10 Home Buyers Warranty (2-10 HBW) can support you in adjusting to this new law.
HB 2024 Can Reduce Your Liability Exposure
Before HB 2024, the period during which a home buyer could assert a claim against a builder (known as the Statute of Repose) ended 10 years after substantial completion of the home (plus another two years from the date a claim was presented if a builder received a written notice of an issue before the expiration of the 10-year period).
HB 2024, which is now in effect, can reduce the Statute of Repose for builders from 10 years to 6 years if you take certain steps.
Now that HB 2024 is in effect, the Statute of Repose for one- and two-family homes or townhouses of not more than three stories is shortened to a period of six years. However, this is only if you provide the home buyer with a qualifying express written warranty that provides coverage for workmanship, distribution systems, and the major structural components of the home.
Note that the six-year period can be extended by another one year from the date a claim is presented if a builder received written notice of an issue before the expiration of the six-year period.
The Critical Step Required to Take Advantage of HB 2024
To take advantage of HB 2024, builders must use a well-written contract that includes a qualifying express limited warranty with terms for the following:
- One year of workmanship coverage
- Two years of distribution systems coverage
- Six years (or more) of coverage for major structural components
A 2-10 HBW Express Warranty can help you quickly fulfill these requirements and thus shorten the Statute of Repose under HB 2024. In addition, it allows you to access post-closing customer support when you opt into the 2-10 HBW Front Line Warranty Service.
It’s critical to provide a qualifying express written warranty to take advantage of the shortened Statute of Repose.
Please remember that many standard real estate contract forms, including the current Texas Real Estate Commission form contracts, do not give any express warranties. This means that such contracts alone will not enable you to shorten the Statute of Repose under HB 2024.
You Build it, We'll back you up.
Learn why 1 in 5 new homes nationwide are covered by a 2-10 HBW Structural Warranty.
Enrolling Homes With 2-10 HBW Provides Additional Benefits
2-10 HBW’s Express Warranty empowers you to quickly take advantage of HB 2024. It also helps you further minimize your warranty liability exposure when you enroll each home you build in 2-10 HBW’s insurance-backed new-home warranty program.
Structural defects can be devastatingly expensive. In fact, each structural claim can cost between $75,000 and $125,000 per claim. And with the unpredictable nature of Texas soils, multiple claims can crop up quickly.
Even though HB 2024 may reduce your liability timeline, it won’t eliminate all liability for structural defects—especially in Texas. When you become a Builder Member of 2-10 HBW’s insurance-backed new-home warranty program, you can reduce the risks of structural defect liabilities during this shortened Statute of Repose.
Let 2-10 HBW Be Your Trusted Guide
As the industry leader, covering 1 in 5 new homes in the US, 2-10 HBW can help you reap the benefits of HB 2024 while protecting your profit, promoting your quality, and letting you plan for a successful future by controlling what’s behind you.
That’s why now is the best time to join the other 1 in 5 new homes in the US covered by a 2-10 HBW Express Warranty.