H.B. No. 3147

	AN ACT
	relating to claims against a contractor for construction of common
	elements under a condominium or cooperative system.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 27.001, Property Code, is amended by
	amending Subdivisions (5) and (7) and adding Subdivision (10) to
	read as follows:
	(5)  "Contractor":
	(A)  means:
	(i)  a builder, as defined by Section
	401.003, contracting with an owner for the construction or repair
	of a new residence, for the repair or alteration of or an addition
	to an existing residence, or for the construction, sale,
	alteration, addition, or repair of an appurtenance to a new or
	existing residence;
	(ii)  [and] any person contracting with a
	purchaser [an owner] for the [construction or] sale of a new
	residence constructed by or on behalf of that person; or
	(iii)  a person contracting with an owner or
	the developer of a condominium for the construction of a new
	residence, for [of] an alteration of or an addition to an existing
	residence, for repair of a new or existing residence, or for the
	construction, sale, alteration, addition, or repair of an
	appurtenance to a new or existing residence; and
	(B)  [. The term] includes:
	(i) [(A)]  an owner, officer, director,
	shareholder, partner, or employee of the contractor; and
	(ii) [(B)]  a risk retention group
	registered under Article 21.54, Insurance Code, that insures all or
	any part of a contractor's liability for the cost to repair a
	residential construction defect.
	(7)  "Residence" means the real property and
	improvements for a single-family house, duplex, triplex, or
	quadruplex or a unit and the common elements in a multiunit
	residential structure in which title to the individual units is
	transferred to the owners under a condominium or cooperative
	system.
	(10)  "Developer of a condominium" means a declarant,
	as defined by Section 82.003, of a condominium consisting of one or
	more residences.
	SECTION 2.  Section 27.007(a), Property Code, is amended to
	read as follows:
	(a)  A written contract subject to this chapter, other than a
	contract between a developer of a condominium and a contractor for
	the construction or repair of a residence or appurtenance to a
	residence in a condominium, must contain [next to the signature
	lines] in the contract a notice printed or typed in 10-point
	boldface type or the computer equivalent that reads substantially
	similar to the following:
	"This contract is subject to Chapter 27 of the Texas Property
	Code. The provisions of that chapter may affect your right to
	recover damages arising from [the performance of this contract] a
	construction defect. If you have a complaint concerning a
	construction defect [arising from the performance of this contract]
	and that defect has not been corrected as may be required by law or
	by contract [through normal warranty service], you must provide the
	notice required by Chapter 27 of the Texas Property Code to the
	contractor by certified mail, return receipt requested, not later
	than the 60th day before the date you file suit to recover damages
	in a court of law or initiate arbitration. The notice must refer to
	Chapter 27 of the Texas Property Code and must describe the
	construction defect. If requested by the contractor, you must
	provide the contractor an opportunity to inspect and cure the
	defect as provided by Section 27.004 of the Texas Property Code."
	SECTION 3.  The changes in law made by this Act apply only to
	a contract that was entered into on or after the effective date of
	this Act. A contract that was entered into before the effective
	date of this Act is governed by the law in effect when the contract
	was entered into, and the former law is continued in effect for that
	purpose.
	SECTION 4.  This Act takes effect September 1, 2007.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 3147 was passed by the House on May
	10, 2007, by the following vote:  Yeas 139, Nays 0, 2 present, not
	voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 3147 was passed by the Senate on May
	23, 2007, by the following vote:  Yeas 31, Nays 0.
	______________________________
	Secretary of the Senate
	APPROVED:  _____________________
	Date
	_____________________
	Governor