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The Residential Service Company Program

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The pdf iconResidential Service Company Act, Chapter 1303, Texas Occupations Code (the RSC Act) and Sections 539.31-539.231 of the Rules of the Texas Real Estate Commission provide for regulation of the licensure of residential service companies.

What is a residential service company?

A residential service company offers home warranty contracts to maintain, repair or replace all or any part of the appliances, structural components, electrical, plumbing, heating, or air conditioning systems of residential property. A residential service contract traditionally offers a home warranty to the buyer or seller of an existing home in conjunction with the sale or purchase of the property (usually for a term of one-year). The real estate broker or salesperson acts as an agent of the residential service company in presenting the warranty to the buyer or seller. See the current list of residential service companies licensed to do business in the State of Texas.

Home warranties on new construction are not regulated through the provisions of the RSC Act. New construction builders usually utilize risk retention groups to warrant the workmanship, systems and appliances of new homes they have built. While risk retention groups are not regulated by any Texas state agency, the Texas Department of Insurance and the Office of the Attorney General will process consumer complaints that may be filed against a risk retention group.

Forms for applying for and maintaining a residential service company license are available from the Commission.

Standards & Enforcement Services opens and investigates residential service company complaints to determine if there has been a violation of the RSC Act. Due to the nature of the residential service company business, Standards & Enforcement Services sometimes receives a complaint while the contract holder is in the middle of a repair, replacement or disagreement with a service provider. In those cases, Standards & Enforcement Services is able to contact the residential service company licensee and resolve the problem before it becomes a written formal complaint. Once a complaint is investigated, the Commission is authorized to hold a hearing on alleged violations of the Act after appropriate notice to the licensed company. A residential service company's license may be suspended or revoked if the company is found to be in violation.




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