Buyer beware: Texas should do more to protect ‘barndo’ customers, regulate builders | Opinion

The old saying goes: If a deal seems too good to be true, it probably is. In Texas, it needs an addendum: Don’t count on the state to help you get your money back.

A number of Texans who wanted to build “barndominiums” to grab a piece of country life at an affordable price have learned this painful lesson. Star-Telegram reporter Jess Hardin recently detailed heartbreaking losses suffered by some would-be barndo buyers who gave builders tens of thousands of dollars in cash, only to be left with an incomplete building, an empty slab or nothing at all.

Buyers often pay cash because banks won’t make loans to construct barndos. So, it’s a classic case of unscrupulous conduct slipping through the cracks of a low-regulation regime. The biggest chasm is the lack of licensing for general contractors, meaning that when a builder messes up or commits fraud, there’s no go-to agency for Texans to seek relief.

The problem is compounded by local prosecutors’ reluctance to pursue these cases as fraud, for understandable reasons: lack of resources, the difficulty of winning a conviction and the fact that business disputes are usually better handled in civil court. And there, even if an owner wins a judgment, they may not be able to find the builder to collect.

It could be mitigated some if the Texas attorney general’s office was functioning properly. The consumer fraud division could do a lot more to protect the state, if we had an attorney general who wasn’t busy saving his own political skin and who was willing to robustly investigate and prosecute bad actors.

Texas has long failed to regulate builders, who have cultivated power through campaign donations. But there’s also understandable reluctance, in a booming state with a deepening housing issue, to do much that would deter home construction.

Regulating general contractors would be a big step, and it shouldn’t be taken lightly. A full-blown licensing requirement might be too much at once. Perhaps lawmakers can do more to encourage builders to carry adequate insurance and bonds against faulty work. Doing more to educate consumers and help them find resources to protect themselves would be a good start, too.

One element that makes the barndominium buyers’ misfortune even more important is that these are just the kind of creative housing solutions that should be encouraged to sustain growth. Not everyone would want to live in a steel structure, but not everyone can afford a full-blown country ranch house, either. With trustworthy actors, ideas such as barndominiums can help fill the gaps.

For now, though, the best advice is: buyer beware. Anytime one pays cash for a project, rather than a bank loan, it’s on the consumer to ensure adequate protections. Be extra vigilant about vetting a contractor. Check references, and if possible, not just the ones the contractor supplies. Get specific details on what will be delivered when, and try not to pay in advance for too much work.

And of course, get the particulars of the deal in writing, and demand that modifications, delays or mishaps be reflected in writing, too.

No one wants to blame the victim of an unscrupulous business person who took advantage. It’s especially sad to see someone who thought they could attain an otherwise unavailable dream home defrauded through no fault of their own. Texas should do more to protect them.

In the meantime, though, we’ll have to do it ourselves.

This story was originally published August 4, 2023 at 10:57 AM.