Failing to connect with the justices in two cases last year, homeowners may now strike out in a third case. The court soon will decide in Centex Homes v. Michael Buecher if buyers of new homes can sign away the “implied warranty of habitability” long recognized by Texas courts. This warranty guarantees the buyer an inhabitable home. San Antonio homeowners sued Centex when it refused to pay for repairs after their foundations cracked within several years of purchasing a new home from this company.

The court first took a wrecking ball to homeowner rights last year in Stringer v. Cendant Mortgage. The court ruled that lenders must notify borrowers that they cannot be forced to use any part of a home-equity loan to pay off an old loan. But the court also ruled that this notification is meaningless because lenders who go ahead and force borrowers to apply a new loan to old debt face no penalty whatsoever (see Dollar Docket, July 5, 2000).

Last month, the court ruled in Spradlin v. Jim Walter Homes that consumer protections in Texas’ home-equity law do not apply when a loan is used to build a new home.

Unfortunately, major ethical cracks appear in the court’s foundation, with the justices mortgaged to homebuilders, mortgage lenders and Centex’s law firms. Since 1993, the eight sitting justices have taken $109,050 from homebuilder interests and $168,526 from mortgage lenders (their trade associations filed briefs for these industries in the Spradlin and Centex cases).

The justices also took $363,338 from Centex’s law firms, Baker & Botts and Bracewell & Patterson, which put two ex-justices on the case (Eugene Cook and Joe Greenhill). Justice Nathan Hecht took $5,000 from Bracewell in the past two months alone.•

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