In 2023, the Texas Legislature made several significant changes to the laws governing homebuilders. Among these was the amendment to Chapter 16 of the Texas Civil Practice and Remedies Code, which shortened the statute of repose on residential construction projects from ten to six years. This post takes a closer look at why the Legislature made this change and what it means for residential homebuilders going forward.

The Change

Prior to HB 2024, which took effect on June 9, 2023, Texas law imposed a 10-year statute of repose on all construction projects. In practical terms, this meant a homebuyer and any later purchaser had up to 10 years from the date of substantial completion to file a lawsuit over latent construction defects.

HB 2024 amended § 16.009 of the Texas Civil Practice and Remedies Code, which governs the statute of repose for residential homebuilders.[1] The ten-year period remains the default, but the amendment shortens it to six years for contractors who provide a written warranty covering at least: one year for workmanship and materials, two years for plumbing, electrical, heating, and air-conditioning systems, and six years for major structural components.

Why the Legislature Acted

The legislative history of HB 2024 shows that the Texas Legislature designed the bill as an incentive: to encourage builders to provide written warranties, and in return, reduce frivolous litigation and improve housing affordability. The author of the bill, Representative Jeff Leach, noted that many builders did not offer warranties because no law required them to, even though warranty service can resolve the majority of home defects. By offering a shorter liability window in exchange for qualifying warranties, the Legislature aimed to promote their widespread use and give homeowners reliable protection.

Cost was a central concern of the amendment. Builders stated that litigation defense costs and insurance liability premiums were increasing because frivolous lawsuits against developers had risen across Texas. Consequently, witnesses reported the cost of litigation was being passed on to homebuyers through higher home prices.

Adding to these cost concerns was the challenge of diagnosing defects in older homes. After ten years of normal wear and tear, it becomes increasingly difficult to tell whether a problem is a genuine defect or simply the result of improper maintenance. Witnesses testified most legitimate defects surface and are corrected within the first five years. After that point, claims are more often brought by subsequent purchasers who lack a complete maintenance history, which makes disputes more complex and expensive to resolve. Industry representatives pointed out that Texas’s ten-year repose period was on the “high end” nationally, especially for the state with the most housing starts in the country. Supporters of the bill also cited Florida’s costly experience with litigation over poorly maintained homes as a cautionary tale and pointed to other states that had shortened their statute of repose as models.

Finally, supporters emphasized that written warranties create clear responsibilities for both sides. Warranties allow builders to stand behind their work and homeowners to commit to ongoing maintenance. This clarity reduces the kind of ambiguity that often leads to lawsuits. Proponents of the bill noted that HB 2024 serves the same goal as the Residential Construction Liability Act (“RCLA”): to resolve construction defects through warranty service rather than litigation. Overall, the Legislature enacted HB 2024 to balance protecting homeowners with guaranteed warranties, while saving builders from frivolous litigation and its associated costs.

What This Means for Residential Homebuilders

The changes to § 16.009 offer real, practical benefits to builders who meet the warranty requirements. The most obvious is the shorter liability window itself. Cutting the repose period from ten years to six years removes exposure during the years when defect-versus-maintenance disputes are hardest to sort out and most expensive to litigate. The amendment also turns warranties into a competitive advantage. Contractors who offer qualifying warranties get the benefit of a shorter repose period while also showing buyers that they stand behind their work.

Importantly, the amendment should reduce the frequency and cost of construction defect litigation. A shorter exposure period, combined with warranty service that resolves defects early, should mean fewer claims make it to court. Further, those that do make it to court should be less complex. Over time, this could translate to lower liability insurance premiums for builders who provide qualifying warranties. Supporters of the bill maintained that these savings will ultimately reach consumers through lower home prices, which helps Texas maintain its competitive position in the housing market.

In light of these changes, residential homebuilders should re-examine their warranty language and consider whether a six-year structural warranty better serves their needs. As always, before making significant changes to your contracts or warranties, it is wise to consult with an attorney experienced in construction law.

[1] Per the statute, residential homebuilders are limited to those providing improvements to a detached one-family or two-family dwelling or a townhouse not more than three stories above grade in height with a separate means of egress or an accessory structure not more than three stories above grade plane in height.