New Construction in West U: Builder Contracts and What Is Negotiable

Whose contract are you signing, and why is it the builder's?

On this page, West U means the City of West University Place; Southampton, Boulevard Oaks and Rice Village sit inside the City of Houston. When a license holder negotiates a contract binding the sale of an interest in real property, 22 Texas Administrative Code Section 537.11(a) requires the use of the contract forms the Commission has approved for mandatory use, and Section 537.11(a)(3) excepts a transaction for which a contract form has been prepared by the property owner or prepared by an attorney and required by a property owner. On a new build the property owner is the builder, which is why the paper in front of you is the builder's own (22 Texas Administrative Code Section 537.11, amended effective 11 June 2023).

The Commission does promulgate new-home contracts. TREC's New Home Contract (Incomplete Construction) is Form 23-20, effective 1 July 2026. The Commission's own description makes it the form for a new home where the construction has not yet been completed by the builder (Texas Real Estate Commission, read July 2026). The companion promulgated form, TREC's New Home Contract (Completed Construction), is for a new home the builder has completed and nobody has previously lived in (Texas Real Estate Commission, read December 2024). Its current form number and effective date sit on the Commission's own listing of approved forms.

The same rule sets what the person at the table may do. A license holder may not practice law, may not directly or indirectly offer or give legal advice, may not give advice or opinions as to the legal effect of any contract form, and may not draft or recommend language defining or affecting the rights, obligations or remedies of the principals, including escalation, appraisal or contingency clauses. A license holder may explain to a principal the meaning of informational items or choices in a contract form, as long as that stays short of practicing law or giving legal advice, and, if specifically instructed in writing by a principal, may add language to or strike language from a form so long as any change is made conspicuous, by underlining an addition, striking through a deletion, or another method that clearly indicates the change being made.

Two duties close the list. Where a transaction involves unusual matters that should be reviewed by an attorney before an instrument is executed, or where the instrument must be acknowledged and filed of record, the license holder shall advise the principals to consult an attorney, and a license holder shall advise the principals that the instrument they are about to execute is binding on them.

The other half of the picture is who else is in the room. The person greeting you in a model home may be the builder's employee rather than a license holder, because selling a builder's new houses takes no license provided the seller is an employee of the new home builder, since being an independent contractor is not enough, with Rule 535.34 giving the guidelines for deciding whether an employer and employee relationship exists (Texas Real Estate Commission, read August 2026).

What does Texas law already put in the contract, whether or not you ask?

Subchapter K of Chapter 53 of the Texas Property Code sits underneath a residential construction contract. To fix a lien on a homestead, the person who is to furnish material or perform labor and the owner must execute a written contract setting forth the terms of the agreement, the contract must be executed before the material is furnished or the labor is performed, it must be signed by both spouses where the owner is married, and it must be filed with the county clerk of the county in which the homestead is located (Texas Property Code, read September 2026).

Before a residential construction contract is executed by the owner, the original contractor shall deliver to the owner a disclosure statement described by Section 53.255. Its text tells an owner that a contractor may not require the owner to convey the real property to the contractor as a condition of the agreement for the construction of improvements, that an owner who borrows from a lender to pay for the improvements is entitled to have the loan closing documents furnished for review at least one business day before the closing, and that an owner is entitled to have their own attorney review any documents.

The same statement is blunt about inspections. Lenders and governmental authorities may inspect work in progress from time to time for their own purposes, those inspections are not intended as quality control inspections, quality control is a matter for the owner and the contractor, and an owner who wants the house built to their own specifications should inspect the work or have an independent inspector review the work in progress.

A written contract subject to Chapter 27, the Residential Construction Liability Act, must also carry a notice printed or typed in 10-point boldface type or the computer equivalent, unless it is 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. The notice says the contract is subject to Chapter 27, that the chapter's provisions may affect the right to recover damages arising from a construction defect, and that an owner complaining of an uncorrected defect must give the chapter's notice to the contractor by certified mail, return receipt requested, not later than the 60th day before the date suit is filed or arbitration is initiated. Where a contract does not contain that notice, the claimant may recover from the contractor a civil penalty of $500 in addition to any other remedy the chapter provides, and an attempted waiver of the chapter's provisions in a contract subject to it is void (Texas Property Code, read September 2026).

What is actually negotiable?

The statutory disclosure names the terms a written agreement should contain, which is the plainest available list of what the law leaves to the parties. Under its GET IT IN WRITING heading, Section 53.255 tells an owner to make sure the written agreement includes a description of the work the contractor is to perform, the required or estimated time for completion of the work, the cost of the work or how the cost will be determined, and the procedure and method of payment, including provisions for statutory reservation of funds and conditions for final payment.

The reservation of funds carries its own number. The homestead notice in Section 53.254 warns that property may be subject to a lien for an unpaid subcontractor or supplier claim where, during construction and for 30 days after completion of the contractor's work, the owner fails to reserve 10 percent of the contract price or 10 percent of the value of the work performed by the contractor. Where that percentage sits in a draw schedule, and what conditions release the final payment, are payment terms in the written agreement.

The subcontractor and supplier list is a right an owner holds and can give up. The original contractor shall furnish to the owner, before the commencement of construction, a written list identifying by name, address and telephone number each subcontractor and supplier the contractor intends to use in the work, and shall provide an updated list not later than the 15th day after the date a subcontractor or supplier is added or deleted. An owner may waive the right to receive that list or any updated information only in writing, and the waiver may be included in the residential construction contract.

Each payment request carries a document as well. At the time the original contractor requests payment from the owner or the owner's lender, the contractor shall provide a disbursement statement, which may include any information the owner and the contractor agree to and must include at least the name and address of each person who subcontracted directly with the original contractor and whom the contractor intends to pay from the requested funds. Intentionally, knowingly or recklessly providing false or misleading information in one is a misdemeanor punishable by a fine not to exceed $4,000 or confinement in jail for a term not to exceed one year, or both.

One sentence in the disclosure governs every conversation held in a design center. Where the contractor made a promise, warranty or representation concerning the work, the owner should make sure that promise, warranty or representation is specified in the written agreement, because an oral promise that is not included in the written agreement may not be enforceable under Texas law. Each of those items is a term the parties write, and the person to review the wording is an attorney.

What happens when something is wrong with the house?

Chapter 27 of the Texas Property Code, the Residential Construction Liability Act, governs a claim for damages or other relief arising from a construction defect, and it front-loads the sequence. Before the 60th day preceding the date a claimant initiates an action, the claimant shall give written notice by certified mail, return receipt requested, to the contractor at the contractor's last known address, specifying in reasonable detail the construction defects that are the subject of the complaint, and shall provide any evidence that depicts the nature and cause of the defect and the nature and extent of repairs necessary to remedy it, including expert reports, photographs, and video or audio recordings (Texas Property Code, read September 2026).

During the 35-day period after the date the contractor receives the notice, and on the contractor's written request, the contractor shall be given a reasonable opportunity to inspect and have inspected the property, and to the extent requested the contractor may conduct up to three inspections in that period. Not later than the 60th day after receiving the notice, the contractor may make a written offer of settlement, which may include an agreement to repair or to have repaired by an independent contractor, partially or totally at the contractor's expense or at a reduced rate to the claimant, any defect described in the notice, and which shall describe in reasonable detail the kind of repairs and the time for completion where that is more than 60 days. Repairs under an accepted offer are made not later than the 60th day after the date the contractor receives written notice of acceptance.

Where the claimant considers the offer unreasonable, the claimant shall advise the contractor in writing and in reasonable detail of the reasons on or before the 25th day after receiving it, and the contractor may make a supplemental written offer not later than the 10th day after receiving that notice. Where Subsection (c) does not apply, a court or arbitration tribunal shall abate an action after a hearing where it finds the contractor entitled to abatement because the claimant failed to provide the notice or failed to give a reasonable opportunity to inspect, and an action is automatically abated beginning on the 11th day after the date a motion to abate is filed. A claimant who rejects a reasonable offer, or who does not permit a reasonable opportunity to inspect or repair under an accepted offer, may not recover more than the limits Section 27.004(e) sets, the first of which is the fair market value of the contractor's last offer of settlement.

The recoverable damages are listed in the statute. A claimant may recover only the economic damages proximately caused by a construction defect: the reasonable cost of repairs necessary to cure the defect, the reasonable and necessary cost for replacement or repair of damaged goods in the residence, reasonable and necessary engineering and consulting fees, the reasonable expenses of temporary housing reasonably necessary during the repair period, the reduction in current market value after the defect is repaired where the defect is a structural failure, reasonable and necessary attorney's fees, and reasonable and necessary arbitration filing fees with the claimant's share of arbitrator compensation. Submission of an action subject to the chapter to arbitration has the same effect on the running of a limitations period as a filing in a court in this state.

A warranty list runs on its own track. Asked about a builder who had been given a list of repairs and had not made them, the Commission's answer is that TREC does not have jurisdiction over builders, that you may wish to file a complaint with the Better Business Bureau or the Texas Attorney General's Office, Consumer Protection Division, and that you may also wish to consult with a private attorney before any possible warranties or other legal remedies expire (Texas Real Estate Commission, read August 2026).

What does building in West University Place add to the schedule?

The city publishes its own sequence for new home construction, and it decides when a builder can actually start. A pre-development meeting comes first, as requested by the homeowner, contractor, architect or designer. Plan review for a new home runs about 10 to 15 business days, the urban forester's review of the tree disposition adds about 5 to 7 business days, and new-home plans go to the building official and then to a third-party planning consultant for zoning compliance inside the same window. Where plans are rejected and resubmitted, the plan review resets to another 10 to 15 business days (City of West University Place, read September 2026).

One gate sits ahead of all of it. The building official shall not issue any permit for development or predevelopment activity until the applicant has filed a tree survey and until the urban forester has approved a tree survey for compliance with Chapter 82, and until tree disposition conditions approved by the forester have been inserted into the permit (Chapter 82 of the Code of Ordinances, read March 2026).

Release of the plans has a checklist attached. The city wants an active water account in the contractor's name, a paid sidewalk, driveway and approach deposit, a utility disconnect permit and inspection with the plumber responsible for disconnecting water and sewer, the electric meter removed, a letter from the gas utility stating that the gas has been disconnected, and a demolition permit and inspection. The deposit, the utility disconnect permit and inspection, and the demolition permit and inspection are not required on an empty lot. Once one final demolition inspection is approved, the contractor and homeowner are notified that the permit is ready to be issued. Inspections are conducted on Tuesday and Thursday, and applications and fees go to the permit office during normal business hours, Monday to Friday, 7:30 a.m. to 4:30 p.m.

Chapter 18 puts clocks on the permits themselves. A demolition permit and a building moving permit are each effective from issuance until noon on the 60th day following the day of issuance; remodeling or additions smaller than 485 square feet of gross floor area, swimming pools, spas and accessory structures, and mechanical, electrical or plumbing permits run to the 180th day; fence, driveway or sidewalk and tree permits run to the 90th day; an occupancy certificate carries an indefinite term; and a permit of a type Section 18-10(a) does not otherwise list runs to the 360th day. A renewal application must be filed on or before the fifth day preceding the day of expiration, with all required and supporting materials called for by the application form. Demolition permittees shall notify the building official before work begins, shall prosecute the work diligently to completion, and shall complete the removal, disposal and grading on or before the tenth day following the day work begins. Where an entire structure is deconstructed instead, items with possible re-use value are salvaged and removed from the site, the deconstruction is completed 49 days from the issuance date of the demolition permit, and the site is completely enclosed with a six-foot-high chain link fence with access gates locked when deconstruction work is not being performed (Chapter 18 of the Code of Ordinances, read March 2026).

Each of those items sits ahead of the first day of framing, so a completion date in a contract is measured from a start the city has to release.

Who is responsible for the site while the house is being built?

An application for a permit, original or renewal, must be made to the building official by the general contractor, and where there is no general contractor it is made by the owner, lessee or other person controlling the site who is acting as the general contractor. Where all the work is proposed to be done by a prime contractor and its subcontractors, the building official must require a master permit covering all the work, even where separate subordinate permits exist for part of it, and the same applies where two or more permits are in effect for the same premises at the same time. Each holder of a master permit is deemed a permittee on the master permit and on each subordinate permit regardless of what the permits themselves say, and is responsible for, and strictly liable for, any violations of the Code arising out of or relating to those permits or any activities under them.

The housekeeping is the permittee's duty while the permit is in effect and for as long afterwards as the work area is affected by construction activity. Each permittee shall immediately pick up and properly dispose of material scraps, trash, rubble and debris, maintain a dumpster, penned enclosure or other receptacle on the work site sufficient to contain everything the activity generates, immediately stack, restack or otherwise secure building materials, equipment and tools, immediately clear and sweep all sidewalks and streets used or blocked for work activity, and immediately remove mud, clay and debris deposited on any roadway or sidewalk.

Fencing and utility notice sit in the same chapter. Each permittee for pre-development activity or major development must provide temporary fencing at least 5.5 feet high, fully enclosing the rear of the site and the sides, and on a demolition or building moving the fencing must enclose the entire work area from the start of work until the area is restored to a safe condition. A permittee for work involving excavation, drilling or other underground work must assure that notice is given to the underground construction and utility coordinating organizations specified by state law or the building official, and must allow sufficient time after that notice and before the start of work for all affected utilities, including the city, to mark the location of their facilities.

Construction hours are set by the noise ordinance, Chapter 54, Article II, rather than by the buildings chapter. Loud and excessive noise resulting from the erection, including excavation, demolition, alteration or repair of any structure during residential quiet hours is declared a violation, unless the noise is made in a case of urgent necessity in the interest of public safety and then only with a permit from the building official, which may be renewed for a period of three days or fewer while the emergency continues. Residential quiet hours are before 7 a.m. or after 7 p.m. Monday to Friday, before 8 a.m. or after 5 p.m. on Saturday, both except on observed city holidays, and before noon or after 5 p.m. on any Sunday or observed city holiday (City of West University Place, read September 2026).

What can this page not tell you?

Whether the warranty a builder offers is any good. The implied warranty of habitability in Texas is common law, so there is no statute and no section number behind it, and the terms of a warranty a builder hands you are in the warranty itself.

What happens to a deposit. None of the Texas statutes on this page governs a builder's deposit, its escrow or its refund, which makes the deposit a matter of contract: its terms are in the builder's own form, and that is where to read them before you sign.

What any particular builder's contract says. Every builder's form is its own document, and Section 537.11(b) is the reason nobody in a brokerage will give you an opinion on its legal effect.

The current form number and effective date of TREC's New Home Contract (Completed Construction). The Commission's own listing of approved forms carries both, and a form number changes when the Commission revises the form, so that listing is the copy to work from.

Permit fees, tree replacement costs and deposit amounts. Those figures are held by the city, and Community Development is where a number for a specific project is settled.

How long a build actually takes. The city publishes review times rather than construction times, so the calendar past permit issuance belongs to the contract and to the contractor.

And what anybody on the brokerage side can do about it. No license holder can draft a clause for you, give an opinion on the legal effect of a builder's form, or move a city review date. Paige Martin of Real Broker, LLC handles new construction and negotiating with the builder, and new-build warranty work and the punch list.