Builders Are Not Required to Disclose Home Construction or Sales Costs to Obtain Permits
Dallas BA reminds residential builders that municipalities may not consider the value of a residential dwelling or the cost of constructing or improving a residential dwelling when determining the amount of a building permit or inspection fee required in connection with the dwelling’s construction or improvement. The prohibition became state law after the passage of HB 852 in the Texas Legislature in 2019.
Furthermore, a municipality may not require the disclosure of information related to the value of or cost of constructing or improving a residential dwelling as the condition for obtaining a building permit, except as required by the Federal Emergency Management Agency for participation in the National Flood Insurance Program.
HB 852 was priority legislation for the Dallas BA and the Texas Association of Builders during the 86th Texas Legislature.
Permit and inspection fees are defined by Texas law as user fees, meaning they are to be proportional to the operating costs of the services for which the fee is charged. In this case, those services are the building inspector’s time to perform required safety inspections on the home and directly related administrative costs. Basing the fees on how expensive the home is can take it beyond that scope and, when combined with other regulatory fees, directly impacts the consumer by making housing less affordable.