TITLE 10.COMMUNITY DEVELOPMENT

Part 1. TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS

Chapter 80. MANUFACTURED HOUSING

The Manufactured Housing Division of the Texas Department of Housing and Community Affairs (Department) adopts without changes §§80.51, 80.55, 80.62, 80.64, 80.66, 80.122, 80.128, 80.130, 80.132, and 80.135. The text to the adopted rules without changes will not be republished. The proposed amendments to §80.52 are not adopted. The following amended rules are adopted with changes and will be republished: §§80.11, 80.56, 80.119, 80.121, 80.123, 80.124, 80.126, and 80.136. The proposed rules were published in the September 19, 2003 issue of the Texas Register (28 TexReg 8076).

The effective date of the rules is thirty (30) days following the date of publication with the Texas Register of notice that the rules have been adopted.

A public hearing was held on October 28, 2003. The following interested groups or associations presented comments either at the hearing or in writing: Texas Manufactured Housing Association ("TMHA").

Set forth below are comments from TMHA and other parties suggesting revisions to specific subsections and the analysis and recommendations of staff.

There was a general comment that several of the definitions (§80.11) were really more than definitions, being in the nature of actual rules, and it was asked that they be moved into other sections as rules. The definitions, as adopted, do not seem to involve any of the proposals that initially caused this issue to be raised.

Definition of Attachment. A commenter suggested changing the language by deleting "With respect to a manufactured home, that it" and adding "means that the home has been..." It was decided to leave it as proposed to make it clear we are talking about the installation of a manufactured home, which includes a HUD Code home or a mobile home, and does not refer to attachment of anything else, such as a foundation or stabilization system.

Definition of a Cash Transaction. A commenter said that proposed definition was technically accurate but could be misleading in a situation in which a customer had secured their own financing independently and used those proceeds to pay cash to the seller. Such a transaction would be is cash the seller (licensee) but financed to the buyer. The commenter stated that these rules were primarily for the benefit of licensees and suggested the following language, "...and no portion of the consideration for the home is financed through the assistance or involvement of the seller." It was decided that the definition was not needed.

Definition of a Contractual Agreement. A commenter expressed concern over the breadth of the definition and thought it might run contrary to the general policy to document manufactured home transactions in writing. It was decided that the definition is not needed.

Definition of a Credit Application. A commenter questioned whether there was such a thing as an oral credit application and voiced that if there is its use should not encouraged or be recognized by the Department. Additionally, the commenter stated, in light of legislative attempts earlier this year to address the ongoing problems with identity theft (SB 473) credit applications should be in writing so it is clear to all parties what is happening and that permission to access consumer information has been granted. It is decided that since the issue is covered by federal laws and rules (the Equal Credit Opportunity Act and Federal Reserve Regulation B), the definition, which tracked the federal language, and separate record-keeping requirement were not needed. However, under the federal law, it is possible, if a lender's procedures permit, to have oral credit application.

Definition of a Creditor. A commenter questioned this, indicating that the Department should have no role in enforcing or administering the Finance Code. The definition, as adopted, is identical to that in the Finance Code. Note that under Section 1201.505, Occupations Code, a retailer or broker must comply with Subtitles A and B, Title 4, Finance Code.

Definition of a Deposit. Due to comments received, the Department clarified to explain disclosure requirements and to allow retention of out-of-pocket costs paid to third parties in connection with financing, such as credit reports.

Definition of Deposits. A commenter indicated that there was nothing wrong with the present definition. It was decided to leave it unchanged

Definition of a Down Payment. A commenter indicated that there was nothing wrong with the present definition. It was decided to leave it unchanged.

Definition of a Permanent Foundation. This was a comment that was viewed as more in the nature of rules than a definition. It was decided to leave this section unchanged from existing rules. However, additional comments and suggestions on this issue are solicited as a broad definition of permanent foundation may promote the availability of mortgage financing for manufactured homes installed to standards other than FHA.

Definition of a Sale Documents - A commenter suggested that the definition was unnecessary. It has been deleted.

A commenter suggested that "chattel mortgage" be defined. Staff recommends that a chattel mortgage be defined as any loan subject to Chapter 347, Finance Code, that is not a mortgage loan.

Section 80.64 - A commenter suggested revising the rule to require manufacturer approval for alterations since the Division no longer has an on staff engineer. Staff is in the process of preparing proposed revisions to §80.64. However, since they are not in connection with the implementation of SB 521, they will be presented separately.

Section 80.119 - A commenter proposed deleting the last sentence of §80.119(g)(2). This comment was adopted.

Section 80.121 - A commenter said that the list of records that retailers must keep on file should also include the 163 Disclosure that is required in §80.182. The comment was adopted and added as §80.121(a)(1)(H). The subsequent subparagraphs are relettered. Also, a commenter suggested adding to the list evidence that the 3-day right of rescission was delivered to the consumer at closing. The right of rescission is extended to 2-years and should be on file. No change was viewed as necessary because §80.121(b) requires all verifications and copies of notices required by the rules to be maintained in the retailer's sales file for a minimum of 6 years, regardless of whether they are listed in §80.121 or not.

Section 80.123(o) - It was asked that the rule be expanded to clarify the scope and application of the continuing education requirements. Language has been added to clarify that participating on a clerical or ministerial basis does not trigger the requirement to obtain continuing education. The same commenter asked for a clarification that courses could be offered online, and this has been made clear.

Section 80.123(i) - A commenter stated the last sentence of subsection (i) could cause confusion and suggested clarification. The sentence has been revised.

Section 80.126 - The phrase "default orders" in subsection (f) and "assessment of costs" in subsection (g) has been removed and clarified at the request of a commenter, along with the phrase "enforcement action." Generally speaking, the language has been clarified so that it does not use any "undefined terms" which appear to have special meanings. A number of commenters objected to what they perceived to be the imposition of costs on top of administrative penalties and asked that these additions not be adopted. These proposed sections have not been deleted. The recovery of costs is specifically authorized by law, and the Department is not in a position to incur significant out-of-pocket costs in order to enforce the laws and rules it administers.

Section 80.136(a)(2) - A commenter stated that for real property transactions the rules should also allow for other installation requirements required by a lender. If no lender is involved and the consumer chooses to treat the home as real property, they should be able to do so and only meet the manufacturer's installation requirements necessary to activate the warranty on new homes and the State generic code on used homes. The Department has deleted this paragraph.

Except as noted below, the rules as proposed on September 19, 2003 are adopted as final rules with the following non-substantive changes.

Section 80.11 is revised by adding new definitions: "Chattel Mortgage or Consumer Loan"; and "Long-Term Lease."

Section 80.11 is revised by deleting proposed new definitions: "Cash Transaction"; "Contractual agreement with a consumer regarding the purchase, exchange, or lease purchase of a manufactured home"; "Credit Application"; and "Sale Documents."

Section 80.11 is revised by deleting proposed amendments to existing definitions: "Creditor"; "Deposits"; "Down Payment"; and "Permanent Foundation."

Section 80.56(k)(1) is revised by changing "BTUH" to uppercase.

In §80.119(b)(1) the first sentence changed by moving the words "perform or" for better sentence structure.

In §80.119(g)(2) the last sentence is deleted because it is not needed.

In §80.121(a)(1) subparagraph (H) was added that requires the retailer retain the 163 Disclosure on file as part of the sales record.

In §80.123(i) the last sentence changed to reference a specific subsection.

In §80.123(o)(1)(B) the last sentence changed to clarify that a person is not required to take continuing education courses if not directly involved in the sale.

In §80.123(o)(2)(C) the last sentence is added to allow for online instructional courses.

Section 80.123(o)(2)(E) is deleted.

Section 80.123(o)(2)(F) changed to (E) and changes were made to the paragraph for clarification purposes and to add wording for courses provided online.

Section 80.123(o)(2)(G) is changed to (F). The text remains the same as proposed.

Section 80.124(c) is a new subsection for additional clarification of deposits and previously proposed subsections are relettered.

In §80.126(f) the first sentence "Default orders." is deleted and in the second sentence the words "respond to" is deleted.

In §80.126(g) the first sentence "Assessment of costs." is deleted and in the second sentence the word "enforcement" located in two places are deleted.

Deleted proposed paragraph §80.136(a)(2) and renumbered remaining paragraphs.

The following is a restatement of the rules' factual basis:

Section 80.11 is adopted (with changes) to make amendments and additions to the definitions. A number of terms added and revised are being clarified in order to facilitate the implementation of changes to the Act made by SB 521.

Section 80.51(c)(1) is adopted (without changes) for the purpose of clarification.

Section 80.55 is adopted (without changes) for the purpose of clarification.

Figure: 10 TAC §80.55(d)(2) - is adopted (without changes) that amends Item # 9 in Table 4A for the purpose of clarification.

Figure: 10 TAC §80.55(e)(1) - is adopted (without changes) that amends Item #9 in Table 5A for the purpose of clarification.

Section 80.56 is adopted (with changes) to make minor grammar changes for the purpose of consistency throughout the rules.

Section 80.62 is adopted (without changes) to make minor grammar changes for the purpose of consistency throughout the rules.

Section 80.64 is adopted (without changes) to make minor grammar changes for the purpose of consistency throughout the rules.

Section 80.66 is adopted (without changes) to make minor grammar changes for the purpose of consistency throughout the rules.

Section 80.119 is adopted (with changes) to change statutory references from Vernon's Revised Texas Civil Statutes to the Occupations Code, to comply with changes made by SB 521, and to make minor grammar changes for the purpose of consistency throughout the rules.

Section 80.121 is adopted (with changes) to change statutory references from Vernon's Revised Texas Civil Statutes to the Occupations Code, to comply with changes made by SB 521, and to make minor grammar changes for the purpose of consistency throughout the rules.

Section 80.122 is adopted (without changes) to change statutory references from Vernon's Revised Texas Civil Statutes to the Occupations Code.

Section 80.123 is adopted (with changes) to change statutory references from Vernon's Revised Texas Civil Statutes to the Occupations Code, to comply with changes made by SB 521, and to make minor grammar changes for the purpose of consistency throughout the rules.

Section 80.123(o) is adopted (with changes) that implement continuing education requirements put in place by the adoption of SB 521. This provision also specifies the requirements for the approval of third party coursework providers.

Section 80.124 is adopted (with changes) to change statutory references from Vernon's Revised Texas Civil Statutes to the Occupations Code and to comply with changes made by SB 521.

Section 80.126 is adopted (with changes) that enable the Division to recover certain costs when it takes successful enforcement action in a contested case.

Section 80.128 is adopted (without changes) to comply with changes made by SB 521, and to make minor grammar changes for the purpose of consistency throughout the rules.

Section 80.130 is adopted (without changes) to change statutory references from Vernon's Revised Texas Civil Statutes to the Occupations Code.

Section 80.132 is adopted (without changes) to change statutory references from Vernon's Revised Texas Civil Statutes to the Occupations Code.

Section 80.135 is adopted (without changes) to change statutory references from Vernon's Revised Texas Civil Statutes to the Occupations Code.

Section 80.136 is adopted (with changes) that delete the requirements for the surrendering of manufacturer's certificates of origin ("MCOs"), a change made possible by the adoption of SB 521, which changed the way that MCOs are treated after a first retail sale.

Subchapter B. DEFINITIONS

10 TAC §80.11

The amended rules are adopted under the Texas Manufactured Housing Standards Act, Occupations Code, Subtitle C, Chapter 1201, §1201.052, which provides the Department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the Department and under Texas Government Code, Chapter 2306, §2306.603, which authorizes the director to adopt rules as necessary to administer and enforce the manufactured housing program through the Manufactured Housing Division.

No other statute, code, or article is affected by the amendments.

§80.11.Definitions.

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1) Alteration - The replacement, addition, and modification or removal of any equipment or its installation after sale by the manufacturer to a retailer, but prior to sale and installation to a purchaser which may affect the construction, fire safety, occupancy plumbing, heat-producing, or electrical system. An alteration is deemed to be prior to sale if the alteration is part of the retail sales contract. It includes any modification made in the manufactured home which may affect the compliance of the home with the standards, but it does not include the repair or replacement of a component or appliance requiring plug-in to an electrical receptacle where the replaced item is of the same configuration and rating as the one being replaced. It also does not include the addition of an appliance requiring "plug-in" to an electrical receptacle, which appliance was not provided with the manufactured home by the manufacturer, if the rating of the appliance does not exceed the rating of the receptacle to which it is connected (FMHCSS §3287.7(c)).

(2) Anchoring components - Any component which is attached to the manufactured home and is designed to resist the horizontal and vertical forces imposed on the manufactured home as a result of wind loading. These components include auger anchors, rock anchors, slab anchors, ground anchors, stabilizing plates, connection bolts, j-hooks, buckles, and split bolts.

(3) Anchoring equipment - Straps, cables, turnbuckles, and chains, including tensioning devices, which are used with ties to secure a manufactured home to anchoring components or other approved devices.

(4) Anchoring systems - Combination of ties, anchoring components, and anchoring equipment that will resist overturning and lateral movement of the manufactured home from wind forces.

(5) APA - Administrative Procedure Act, Texas Government Code, Chapter 2001.

(6) Attachment - With respect to a manufactured home, that it has been installed in accordance with the Department's rules and connected to any one or more utilities including, but not limited to, electricity, water, natural gas, propane or bottled gas, or wastewater service. For purposes of determining whether a manufactured home is attached, the presence of installation deviations or violations shall not invalidate the home's status as being attached.

(7) Board - Governing Board of the Manufactured Housing Division of the Texas Department of Housing and Community Affairs.

(8) Business use - Any use other than for dwelling purposes.

(9) Calendar days - Includes every day on the calendar.

(10) Certificate of Attachment - A certificate issued by the department to the person who surrenders the Manufacturer's Certificate of Origin or document of title when the home has been permanently affixed to real estate. Certificates of Attachment are no longer issued after June 18, 2003.

(11) Chattel Mortgage or Consumer Loan - A loan subject to Chapter 347, Texas Finance Code, that is not a mortgage loan.

(12) Coastline - The shoreline that forms the boundary between the land and the Gulf of Mexico or a bay or estuary connecting to the Gulf of Mexico that is more than five miles wide.

(13) Credit document - The credit sale contract or the loan instruments including all the written agreements between the consumer and creditor that relate to the credit transaction.

(14) Creditor - A person involved in a credit transaction who:

(A) extends or arranges the extension of credit; or

(B) is a retailer or broker as defined in the Standards Act and participates in arranging for the extension of credit.

(15) Creditor-Lender - A person that is involved in extending or arranging for credit in inventory financing secured by manufactured housing.

(16) Custom designed stabilization system - An anchoring and support system that is not an approved method as prescribed by the state generic standards, manufacturer's installation instructions, or other systems pre-approved by the department.

(17) DAPIA - The Design Approval Primary Inspection Agency.

(18) Defect - A failure to comply with an applicable federal manufactured home safety and construction standard that renders the manufactured home or any part or component thereof not fit for the ordinary use for which it was intended, but does not result in an unreasonable risk of injury or death to occupants of the affected manufactured home (FMHCSS §3282.7(j)).

(19) Department - The Manufactured Housing Division of the Texas Department of Housing and Community Affairs (TDHCA).

(20) Department inspector - An inspector who is an employee of the Manufactured Housing Division of the Texas Department of Housing and Community Affairs or an inspector who is an employee of an entity performing inspection services under contract with the department.

(21) Deposits - Money or other consideration given by a consumer to a retailer, salesperson, or agent of a retailer to hold a home in inventory for subsequent purchase or to special order a home for subsequent purchase.

(22) Diagonal tie - A tie intended to primarily resist horizontal forces, but which may also be used to resist vertical forces.

(23) Director - The Executive Director of the Manufactured Housing Division of the Texas Department of Housing and Community Affairs (TDHCA).

(24) Down Payment - An amount, including the value of any property used as a trade-in, paid to a retailer to reduce the cash price of goods or services purchased in a credit sale transaction.

(25) Dwelling unit - One or more habitable rooms which are designed to be occupied by one family with facilities for living, sleeping, cooking and eating.

(26) FMHCSS - Federal Manufactured Home Construction and Safety Standards that implement the National Manufactured Home Construction and Safety Standards Act of 1974, 42 USC 5401, et seq., and means a reasonable standard for the construction, design, and performance of a manufactured home which meets the needs of the public including the need for quality, durability, and safety.

(27) Footing - That portion of the support system that transmits loads directly to the soil.

(28) Ground anchor - Any device at the manufactured home site designed to transfer manufactured home anchoring loads to the ground.

(29) HUD-Code manufactured home - A structure constructed on or after June 15, 1976, according to the rules of HUD, transportable in one or more sections, which, in the traveling mode, is eight body feet or more in width or 40 body feet or more in length, or, when erected on site, is 320 or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air-conditioning, and electrical systems. The term does not include a recreational vehicle as that term is defined by 24 CFR, §3282.8(g).

(30) Imminent safety hazard - A hazard that presents an imminent and unreasonable risk of death or severe personal injury that may or may not be related to failure to comply with an applicable federal manufactured home construction and safety standard (FMHCSS §3282.7(q)).

(31) Independent testing laboratory - An agency or firm that tests products for conformance to standards and employs at least one engineer or architect licensed in at least one state.

(32) Installation information - A term used to describe the reports used to inform the department of information needed to perform installation inspections (includes Notice of Installation).

(33) IPIA - The Production Inspection Primary Inspection Agency which evaluates the ability of manufactured home manufacturing plants to follow approved quality control procedures and/or provides ongoing surveillance of the manufacturing process.

(34) Lien - A security interest that is created by any kind of lease, conditional sales contract, deed of trust, chattel mortgage, trust receipt, reservation of title or other security agreement of whatever kind or character, if an interest, other than an absolute title, is sought to be held or given in a manufactured home, and any lien on a manufactured home that is created or given by the constitution or a statute.

(35) Long-Term Lease - For the purpose of determining whether or not the owner of a manufactured home may elect to treat the home as real property, is a lease on land to which the manufactured home has been attached and which:

(A) has been approved by each lienholder for the manufactured home by placing on file with the department written consent to have the home treated as real property; or

(B) is for at least five years if the home is not financed.

(36) Main frame - The structural components on which the body of the manufactured home is mounted.

(37) Manufactured home - A HUD-Code manufactured home or a mobile home and collectively means and refers to both.

(38) Manufactured home identification numbers - For purposes of title records, the numbers shall include the HUD label number(s) and the serial number(s) imprinted or stamped on the home in accordance with HUD departmental regulations. For homes manufactured prior to June 15, 1976, the Texas seal number, as issued by the department, shall be used instead of the HUD label number. If a home manufactured prior to June 15, 1976, does not have a Texas seal, or if a home manufactured after June 15, 1976, does not have a HUD label, a Texas seal shall be purchased from the department and attached to the home and used for identification in lieu of the HUD label number.

(39) Manufactured home site - That area of a lot or tract of land on which a manufactured home is installed.

(40) Mobile home - A structure that was constructed before June 15, 1976, transportable in one or more sections, which, in the traveling mode, is eight body feet or more in width or 40 body feet or more in length, or, when erected on site, is 320 or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air-conditioning, and electrical systems.

(41) Permanent foundation - A system of supports and securements, including piers, either partially or entirely below grade which is constructed or certified in accordance with the criteria outlined in §80.52(a) and (b), of this title (relating to Permanent Foundation Performance Criteria).

(42) Permanently affixed - Having been anchored to the real estate by attachment to a permanent foundation.

(43) Rebuild - To make a salvaged manufactured home habitable in accordance with §80.66 of this title (relating to Rebuilding or Repairing a "Salvaged" Manufactured Home).

(44) Rebuilder - Any person, within the state, who has been licensed by the department to rebuild a salvaged manufactured home, as defined in §1201.461 the Standards Act, in accordance with the rules and regulations of the department.

(45) Refurbish - To make a nonhabitable manufactured home or section habitable by repairing, adding, replacing, modifying, or removing components.

(46) Serious defect - Any failure to comply with an applicable federal manufactured home construction and safety standard that renders the manufactured home or any part thereof not fit for the ordinary use for which it was intended and which results in an unreasonable risk of injury or death to occupants of the affected manufactured home (FMHCSS §3282.7(gg)).

(47) Shim - A wedge-shaped piece of cedar, oak, walnut, pecan, gum, ash, hickory, elm, or other comparable hardwood or other accepted material not to exceed one (1) inch vertical (actual) height.

(48) Stabilizing components - All components of the anchoring and support system such as piers, footings, ties, anchoring equipment, ground anchors and any other equipment, which supports the manufactured home and secures it to the ground.

(49) Standards Act - Texas Manufactured Housing Standards Act, Occupations Code, Subtitle C, Chapter 1201.

(50) Statement of Ownership and Location - means a statement, issued by the Department on the prescribed form, based on a completed application for Statement of Ownership and Location, accompanied by the required fee and all required supporting documentation.

(51) Support system - A combination of footings, piers, caps and shims that support the manufactured home.

(52) TDHCA - The Manufactured Housing Division of the Texas Department of Housing and Community Affairs (Department).

(53) TMHSA - Texas Manufactured Housing Standards Act, Occupations Code, Subtitle C, Chapter 1201.

(54) Used home - Any manufactured home (or mobile home) for which a document of title has previously been issued by an appropriate agency of any state or which has been occupied.

(55) Vertical tie - A tie intended primarily to resist the uplifting and overturning forces.

(56) Wind Zone I - All Texas counties not in Wind Zone II.

(57) Wind Zone II - Aransas, Brazoria, Calhoun, Cameron, Chambers, Galveston, Jefferson, Kenedy, Kleberg, Matagorda, Nueces, Orange, Refugio, San Patricio, and Willacy counties.

(58) Working days - Includes every day on the calendar except Saturday, Sunday, and federal and state holidays.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 16, 2004.

TRD-200401986

Timothy K. Irvine

Executive Director, Manufactured Housing Division of TDHCA

Texas Department of Housing and Community Affairs

Effective date: May 2, 2004

Proposal publication date: September 19, 2003

For further information, please call: (512) 475-2206


Subchapter D. STANDARDS AND REQUIREMENTS

10 TAC §§80.51, 80.55, 80.56, 80.62

The amended rules are adopted under the Texas Manufactured Housing Standards Act, Occupations Code, Subtitle C, Chapter 1201, §1201.052, which provides the Department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the Department and under Texas Government Code, Chapter 2306, §2306.603, which authorizes the director to adopt rules as necessary to administer and enforce the manufactured housing program through the Manufactured Housing Division.

No other statute, code, or article is affected by the amendments.

§80.56.Multi-Section Connection Standards.

(a) Air infiltration and water vapor migration at mating surfaces: Before positioning additional sections, the mating line surfaces along the floor, endwall and ceiling, require material or procedures to limit air infiltration and water vapor migration. The following are acceptable materials and/or procedures:

(1) Expanding Foam: Foam may be used along surfaces that are accessible after the units have been joined. Where mating line walls line up between sections, non-porous materials must be installed prior to joining the units.

(2) Caulking: Caulking may be used along surfaces that are accessible after the units have been joined. Where mating line walls line up between sections, non-porous materials must be installed prior to joining the units.

(3) Non-porous gasket installed along the perimeter of all mating lines.

(4) Insulation, carpet, carpet pad or other porous materials are not acceptable.

Figure: 10 TAC §80.56(a)(4) (No change.)

(b) Floor Connections:

(1) Gaps between floors up to 1-1/2 inches maximum which do not extend the full length of the floor may be filled with lumber, plywood or other suitable shimming materials. Fastener lengths in shimmed areas may need to be increased to provide minimum 1-1/4 inches penetration into opposite floor rim joist.

(2) Gaps less than 1/2 inch width need not be shimmed.

(3) The floor assemblies of multi-section units must be fastened together. Fastener options and maximum spacings are listed in table 6A in paragraph (5) of this subsection.

(4) Any tears or damages to the bottom board due to fastener installation must be repaired.

(5) Table 6A: Floor connections - Wind Zone I and II:

Figure: 10 TAC §80.56(b)(5) (No change.)

(c) Endwall Connections:

(1) Endwalls must be fastened together at the mating line with minimum #8x4 inch wood screws or 16d nails at maximum 8 inches on-center or 12 inches on-center maximum for 5/16 lags; toed or driven straight; and

(2) Fastener length may need to be adjusted for gaps and/or toeing, to provide minimum 1-1/2 inch penetration into opposite endwall stud.

Figure: 10 TAC §80.56(c)(2) (No change.)

(d) Roof Connection: (Note: Fasteners must not be used to pull the sections together.)

(1) Roof shall be connected with the fasteners and spacings specified in Table 56(d)(3).

(2) Gaps between the roof sections (at ridge beam and/or open beam ledgers) of up to 1-1/2 inches wide maximum which do not extend the full length of the roof must be filled with lumber and/or plywood shims. Gaps up to 1/2 inch need not be shimmed. The fastener length used in the shimmed area may need to be increased to provide a minimum 1-1/4 inch penetration into the adjacent roof structural member.

(3) Table 56(d)(3): Roof Connection - Fastener type and spacing:

Figure: 10 TAC §80.56(d)(3) (No change.)

(4) Figure 56(d)(4).

Figure: 10 TAC §80.56(d)(4) (No change.)

(e) Exterior Roof Close Up:

(1) Ensure that shingles are installed to edge of roof decking at peak. Follow nailing instructions on the shingle wrapper. Note: Wind Zone II (high wind) installations require additional fasteners.

(2) Before installing ridge cap shingles, a minimum 6 inch wide piece of 30 gauge galvanized flashing must be installed the length of the roof.

(3) When flashing is not continuous, lap individual pieces a minimum of 6 inches.

(4) Fasten flashing into roof sheathing with minimum 16 gauge staples with 1 inch crown or roofing nails of sufficient length to penetrate roof decking. Maximum fastener spacing is 6 inches on-center each roof section. Place fasteners a minimum of 3/4 inches along edge of flashing.

(5) Install ridge shingles directly on top of flashing.

(6) Check remainder of roof for any damaged or lose shingles, remove any shipping plastic or netting, wind deflectors, etc. Make sure to seal any fastener holes with roofing cement.

Figure: 10 TAC §80.56(e)(6) (No change.)

(f) Exterior Endwall Close Up: Cut closure material to the shape and size required and secure in place, starting from the bottom up, i.e.: bottom starter, vertical or horizontal siding, then roof overhang, soffit and fascia. All closure material should be fitted and sealed as required to protect the structure or interior from the elements.

(g) HVAC (heat/cooling) Duct Crossover:

(1) Crossover duct must be listed for EXTERIOR use.

(2) Duct R-value shall be a minimum of R-4.

(3) The duct must be supported 48 inches on-center (maximum) and must not be allowed to touch the ground. Either strapping, to hang the duct from the floor, or pads to support it off the ground are acceptable.

(4) The duct to the collar or plenum connections must be secured with bands or straps approved for such use. Keep duct as straight as possible to avoid kinks or bends that may restrict the airflow. Extra length must be cut off.

Figure: 10 TAC §80.56(g)(4) (No change.)

(h) Water Crossover Connection (multi-sections only):

(1) If there is water service to other sections, connect the water supply crossover lines as shown in the applicable detail.

Figure: 10 TAC §80.56(h)(1) (No change.)

(2) If the water crossover connection is not within the insulated floor envelopes, wrap the exposed water lines in insulation and secure with a good pressure sensitive tape or nonabrasive strap, or enclose the exposed portion with an insulated box.

(3) If water piping at the inlet is exposed, a heat tape should be installed to prevent freezing. A heat tape receptacle has been provided near the water inlet. When purchasing a heat tape, it must be listed for manufactured home use, and it must be installed per manufacturer's instructions.

(i) Drain, Waste and Vent System (DWV):

(1) Portions of the DWV system which are below the floor may not have been installed, to prevent damage to the piping during transport. Typically, the DWV layout is designed to terminate at a single connection point to connect to the on-site sewer system. For a new home where on-site DWV connections are not assembled per the manufacturer's instructions, the DWV system must be assembled in accordance with Part 3280 of the FMHCSS.

(2) The following guidelines apply:

(A) All portions of the DWV system shall be installed to provide a minimum of 1/4 inch slope per foot, in the direction of the flow.

(B) Changes in direction from vertical to horizontal, and horizontal to horizontal, shall be made using long sweep elbows and/or tees.

(C) All drain piping shall be supported at intervals not to exceed 4 feet on-center. The support may be either blocking or strapping. When strapping is used, it should be nonabrasive.

(D) Piping must be assembled with the appropriate cleaners, primers and solvents (note: both ABS and PVC systems are common, but require different adhesives). Be sure to follow the instructions of the product used.

(E) A cleanout must be installed at the upper (most remote) end of the floor piping system (see diagrams in subparagraph (F) in this paragraph).

(F) Typical details:

Figure: 10 TAC §80.56(i)(2)(F) (No change.)

(j) Electrical Connections: Depending on the model and/or manufacturer of the home, electrical crossovers may be located in either the front end and/or rear end of the home. Check along mating line for other labeled access panels.

(1) Crossover connections may be one of the following:

(A) approved snap or plug-in type;

(B) junction boxes inside floor cavity (note: crossover wiring routed outside the floor cavity must be enclosed in conduit). If the boxes and/or covers are metal, they must be grounded by the use of the ground wire; or

(C) pigtail between receptacles/switches between sections (one circuit only).

(2) Chassis Bonding: Each chassis shall be bonded to the adjacent chassis with a solid or stranded, green insulated or bare, number 8 copper conductor. The conductor is connected to the steel chassis with a solderless lug. Alternate bonding: A 4 inch wide by 30 gauge continuous metal strap may be used as an alternate, when attached to the chassis members with two #8x 3/4 inch self tapping metal screws each end of the strap.

Figure: 10 TAC §80.56(j)(2) (No change.)

(3) typical crossover details:

Figure: 10 TAC §80.56(j)(3) (No change.)

(4) Shipped loose equipment:

(A) Electrical equipment such as ceiling fans, chandeliers, exterior lights, etc., which may have been shipped loose, must be installed in accordance with the adopted National Electric Code (NEC). Connect all corresponding color coded or otherwise marked conductors per the applicable sections of the NEC.

(B) Bonding strap removal: 240 volt appliances (range, dryer, etc.) shall have the bonding strap removed between the ground and the neutral conductors. Cords used to connect those appliances shall be four conductor, four prong.

(5) Electrical testing: At the time of installation, the following tests must be performed:

(A) All site installed or shipped loose fixtures shall be subjected to a polarity test to determine that the connections have been properly made.

(B) All grounding and bonding conductors installed or connected during the home installation shall be tested for continuity, and

(C) All electrical lights, equipment, ground fault circuit interrupters and appliances shall be subjected to an operational test to demonstrate that all equipment is connected and functioning properly.

(6) Main panel box feeder connection: The main panel box is wired with the grounding system separated from the neutral system (4-wire feeder). The grounding bus in the panel must be connected through a properly sized green colored insulated conductor to the service entrance equipment (meter base) located on or adjacent to the home. Refer to the following table for proper feeder conductor sizes.

Figure: 10 TAC §80.56(j)(6) (No change.)

(k) Fuel Gas Piping Systems:

(1) Crossover Connections: All underfloor fuel gas pipe crossover connections shall be accessible and be made with the connectors supplied by the home manufacturer, or, if not available, with flexible connectors listed for exterior use and a listed quick disconnect (Method A), or a shut-off valve (Method B). When shut-off valve is used, it must be installed on the supply side of the gas piping system. The crossover connector must have a capacity rating (BTUH) of at least the total BTUH's of all appliances it serves.

(2) Testing: The fuel gas piping system shall be subjected to an air pressure test of no less than 6 ounces and no more than 8 ounces. While the gas piping system is pressurized with air, the appliance and crossover connections shall be tested for leakage with soapy water or bubble solution. This test is required of the person connecting the gas supply to the home, but may also be performed by the gas utility or supply company.

Figure: 10 TAC §80.56(k)(2) (No change.)

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 16, 2004.

TRD-200401987

Timothy K. Irvine

Executive Director, Manufactured Housing Division of TDHCA

Texas Department of Housing and Community Affairs

Effective date: May 2, 2004

Proposal publication date: September 19, 2003

For further information, please call: (512) 475-2208


10 TAC §80.64, §80.66

The amended rules are adopted under the Texas Manufactured Housing Standards Act, Occupations Code, Subtitle C, Chapter 1201, §1201.052, which provides the Department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the Department and under Texas Government Code, Chapter 2306, §2306.603, which authorizes the director to adopt rules as necessary to administer and enforce the manufactured housing program through the Manufactured Housing Division.

No other statute, code, or article is affected by the amendments.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 16, 2004.

TRD-200401988

Timothy K. Irvine

Executive Director, Manufactured Housing Division of TDHCA

Texas Department of Housing and Community Affairs

Effective date: May 2, 2004

Proposal publication date: September 19, 2003

For further information, please call: (512) 475-2206


Subchapter E. GENERAL REQUIREMENTS

10 TAC §§80.119, 80.121 - 80.124, 80.126, 80.128, 80.130, 80.132, 80.135, 80.136

The amended rules are adopted under the Texas Manufactured Housing Standards Act, Occupations Code, Subtitle C, Chapter 1201, §1201.052, which provides the Department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the Department and under Texas Government Code, Chapter 2306, §2306.603, which authorizes the director to adopt rules as necessary to administer and enforce the manufactured housing program through the Manufactured Housing Division.

No other statute, code, or article is affected by the amendments.

§80.119.Installation Responsibilities.

(a) For new manufactured homes, the retailer is the installer and must warrant the proper installation of the home. If the retailer subcontracts with an independent licensed installer, then the subcontractor is jointly and severally liable for the portion of the installation that the subcontractor performed.

(b) For used manufactured homes, the person contracting with the consumer for the installation of the home is the installer and must warrant the proper installation of the home. If the contracting installer subcontracts with an independent licensed installer, then the subcontractor is jointly and severally liable for the portion of the installation that the subcontractor performed. The contracting installer is responsible to furnish the consumer with the installation warranty and site preparation notice. All verification and copies of the installation warranty and site preparation notice must be maintained in the installer's installation file for a period of no fewer than six (6) years from the date of installation.

(1) The person contracting directly with the consumer for only the transportation of the used home to a manufactured home site is not an installer if the person does not perform or contract to perform any installation functions. In this case, the installer is the person that contracts for the construction of the foundation systems, whether temporary or permanent, and the placement and erection of the used home and its components on the foundation system.

(2) The selling retailer may sell a used home and deliver possession to the consumer at the sales location (e.g., F.O.B. the sales location). In this case, the retailer shall not perform any installation functions nor transport the home to the home site.

(c) The installer is fully responsible for the complete installation even though the installer may subcontract certain installation functions to independent contractors pursuant to §1201.102(b) of the Standards Act. It is unlawful for a subcontractor who is acting as an agent for a licensed installer to advertise and/or offer installation services to any person unless the licensed installer's name appears prominently in the advertisement.

(d) The sale of a new or used home by a retailer which includes an agreement to deliver the home and install the home at the home site is not completed until possession of the home is tendered to the consumer at the home site.

(e) Electrical, fuel, mechanical, and plumbing system crossover connections for multi-section homes, and completions of drain lines underneath all homes in accordance with DAPIA approved on-site assembly drawings are installer responsibilities and cannot be excluded by wording of the installation contract. The installation of air conditioning at the home site must be performed by a licensed air conditioning contractor. The installation and ventilation of skirting or other material that encloses the crawl space underneath a manufactured home is an installer responsibility, if it is part of the sales or installation contract.

(f) For all secondary moves (where there is no title transfer) the Notice of Installation and the required fee must be submitted to the department within ten (10) working days after the installation is completed.

(g) When the installer selects the department to inspect the permanent foundation before concealment, the installer shall file an application to install a manufactured home on a permanent foundation on a form approved by the department. The required fee for the permanent foundation installation report shall be forwarded with the application. After the department inspects the permanent foundation and indicates acceptance of the permanent foundation on the form, the title company, attorney, retailer, or retailer's agent later files the Notice of Installation, including a copy of the form, with the public land records of the county and forwards a copy to the department. The reporting fee does not have to be paid to the department again.

(1) Unless the retailer/installer follows the home installation manual or a department pre-approved foundation systems, a copy of the foundation system drawing as stamped and signed by the licensed engineer or architect must be filed with the application.

(2) The application must be received by the department at least ten (10) calendar days prior to the date on which construction of the permanent foundation system is scheduled to begin.

(3) Installers shall provide a copy of the application and the foundation system drawing to the department inspector at the time an inspection is performed.

(4) If the permanent foundation system design is approved by the authorized local government official and if the applicable building inspection fees are paid to the local government, the provisions of this section do not apply. The installer must, however, file a sworn statement of these facts with the Notice of Installation.

(5) If the permanent foundation for a home acquired and installed before January 1, 2002 is certified by the consumer/mortgagor and the lender/mortgagee in a real estate transaction, or is certified by the owner if there is no lien or the lien has been released, as having permanently affixed the structure to the real estate, the provisions of this section do not apply. The installation reporting fee must be paid and sent to the department along with the certification.

(6) When specifically requested in writing by the department with a Department Real Estate Inspection Request Form, a contracting local government shall make and perform inspection and enforcement activities related to the construction of the foundation that permanently affixes a manufactured home to real estate. If the permanent foundation system and other site improvements are inspected and accepted by a contracting local government official before concealment, the local government records may be the verification required by §1201.222(c) of the Standards Act. The retailer/installer must file a Notice of Installation, including a copy of the local government inspection report, with the public land records of the county and forward a copy of the Notice of Installation to the department with the reporting fee.

(7) If the site suitability, site preparation, site improvement, foundation construction, and installation for a home acquired on or after January 1, 2002 are verified by a retailer or installer, the provisions of this section do not apply, but the title company, attorney, retailer, or retailer's agent must file a Notice of Installation with the public land records of the county and forward a copy of the Notice of Installation to the department with the reporting fee.

§80.121.Retailer's Responsibilities.

(a) Manufactured housing retailers shall retain as part of each sales record and make available for copying and review by department personnel, upon request during normal business hours, the following information:

(1) For all manufactured homes:

(A) name and address of the purchaser and the date of purchase;

(B) verification that the purchaser received the Formaldehyde Health Notice required by §1201.153 of the Standards Act;

(C) verification that the purchaser was advised of the Wind Zone, thermal zone, and roof load zone for which the home was constructed. If this information is not available for a used home, the purchaser will be advised of this fact and the used home will be disclosed as being constructed to Wind Zone I, thermal zone 1, and the roof load design for the South;

(D) verification that the purchaser received the Wind Zone notice as required by §80.50 of this title (relating to Wind Zone Regulations);

(E) verification that the purchaser received the site preparation notice;

(F) verification that the purchaser received written notice of the two (2) year limitation of notice for filing a claim with the department;

(G) verification that the Disclosure required by §80.181 of this title (relating to Section 162 Notice) was provided to the purchaser prior to completing a credit application;

(H) verification that the disclosure required by §80.182 (relating to 163 Disclosure) be delivered to the consumer at least 24 hours before execution of the contract in a chattel mortgage or consumer loan transaction;

(I) copies of the Notice of Installation and attached documents;

(J) if the sale of a home includes air conditioning, the name and license number of the air conditioning contractor which installed the air conditioning system in accordance with §80.64(d) of this title (relating to Procedures for Alterations); and

(K) complete records of all alterations, in accordance with 24 CFR §3282.254.

(2) For all new manufactured homes:

(A) verification that a copy or the general description of the manufacturer's new home warranty and installation warranty were given to the consumer prior to the retailer's signing of any binding retail installment sales contract or other mutually binding agreement.

(B) verification that the manufacturer's new home warranty, consumer's manual, and retailer's installation warranty were delivered to the purchaser;

(C) verification of the date that the manufactured home information card was mailed to the manufacturer; and

(D) verification of delivery of conspicuous notice relating to defect or damage under the new home warranty as required by §1201.359(b) of the Standards Act.

(3) For used manufactured homes:

(A) verification that the purchaser received the written 60-day habitability warranty;

(B) verification that a copy or the general description of the retailer's installation warranty were given to the consumer prior to signing of any binding retail installment sales contract or other mutually binding agreement, if the retailer contracted for the installation as a part of the sales agreement; and

(C) verification that the purchaser received the retailer's installation warranty if the retailer contracted for the installation as a part of the sales agreement.

(b) All verifications and copies of notices required by this chapter must be maintained in the retailer's sales file, and the sales file must be maintained for a period of not less than six (6) years from the date of sale. If a retailer has more than one sales location and wishes to maintain all of its records at a central location, it may do so provided that the retailer notifies the department more than sixty (60) calendar days in advance that its records are being maintained at a central location by providing the address of such location. Absent such notice the records of a particular home must be maintained at the address where the home is in inventory and from which it was sold. If the retailer wishes to discontinue the centralization of its records or to change the address where its records are kept, the retailer must notify the department more than sixty (60) calendar days in advance of the change of the location and the address and effective date of the new location.

(c) For new homes or used homes manufactured on or after September 1, 1997, a manufactured housing license holder shall not contract for sale or installation of any home under which the home would be installed in a wind zone, thermal zone, or roof load zone other than that allowed on the data plate.

§80.123.License Requirements.

(a) Manufacturer. Any person constructing or assembling new manufactured housing for sale, exchange, or lease purchase within this state shall be licensed as a manufacturer. An application shall be submitted on the form required by the department and shall be completed giving all the requested information. The application shall be accompanied by the required security, Articles of Incorporation or Assumed Name Certificate, and payment of the license fee. Every distinct corporate entity must be separately licensed. Each separate plant location operated by a license holder which is not on property which is contiguous to or located within 300 feet of the license holder's licensed manufacturing facility requires a separate license and security.

(b) Retailer. Any person engaged in the business of buying for resale, selling, or exchanging manufactured homes or offering such for sale, exchange, or lease purchase to consumers shall be licensed as a retailer. An application for license shall be submitted on the form required by the department and be completed giving all the requested information. The application shall be accompanied by the required security, Articles of Incorporation or Assumed Name Certificate, and payment of the license fee. No person shall be considered a retailer unless engaged in the sale, exchange, or lease purchase of two or more manufactured homes to consumers in any consecutive twelve (12) month period. Sales, exchanges, or lease purchases by any employee or agent of a business entity are deemed to be sales of the business entity. Each separate sales location which is not on property which is contiguous to or located within 300 feet of a licensed sales location requires a separate license and security.

(c) Broker.

(1) Any person engaged by one or more other persons to negotiate or offer to negotiate bargains or contracts for the sale, exchange, or lease purchase of a manufactured home to which a certificate or document of title has been issued and is outstanding shall be licensed as a manufactured housing broker. An application for license shall be submitted on the form required by the department and be completed giving all the requested information. The application shall be accompanied by the required security, Articles of Incorporation or Assumed Name Certificate, and payment of the license fee. Each office location of the broker shall be licensed and proper security posted unless an office is on property which is contiguous to or located within 300 feet of an office licensed with the department.

(2) A broker shall not maintain a location for the display of manufactured homes without being licensed as a retailer.

(3) Paragraphs (1) and (2) of this subsection shall not apply to the sale, exchange, or lease purchase of a manufactured home in a single real estate transaction when the home and land are sold as realty with improvements.

(d) Rebuilder. Any person who desires to be licensed by the department to alter, repair, or otherwise rebuild a salvaged manufactured home, as that term is defined in §1201.461 of the Standards Act, within this state, shall be licensed. An application shall be submitted on the form required by the department and shall be completed, giving all the requested information. The application shall be accompanied by the required license fee and Articles of Incorporation or Assumed Name Certificate.

(e) Installer.

(1) Every person who contracts to perform or performs installations shall submit the required security, complete the necessary license forms and any other information needed, and be issued a license prior to performing an installation function. The required license fee must accompany the application for license and Articles of Incorporation or Assumed Name Certificate.

(A) Each applicant for license shall have public liability insurance coverage, including completed operations coverage in an amount of not less than $300,000 for bodily injury each occurrence and property damage insurance in an amount of not less than $100,000 each occurrence. A combined single limit of $300,000 will be considered to be in compliance with this section. If the applicant will be engaged in the transportation of manufactured housing incidental to the installation, the applicant must also have motor vehicle liability insurance coverage in an amount of not less than $250,000 bodily injury each person, $500,000 bodily injury each occurrence, $100,000 property damage each occurrence. A combined single limit of $500,000 will be considered to be in compliance with this section. Cargo insurance on each home or transportable section of not less than $50,000 per towing motor vehicle is required.

(B) At the time of initial license and on renewal, a certificate of insurance must be filed with the department by the insurance carrier or its authorized agent certifying the kind, type and amount of insurance coverage and which provides for thirty (30) calendar days notice of cancellation. If the applicant does not provide proof of the required motor vehicle liability insurance and the cargo coverage, the applicant must sign an affidavit that the applicant will not engage in any transportation of manufactured housing. If the applicant transports only his/her own property, and furnishes the department with an affidavit attesting to that fact, cargo coverage is not required.

(C) An installer, also licensed as a retailer, may satisfy the insurance requirements by filing a certificate of insurance which shows that the license holder has motor vehicle-garage liability coverage including completed operations, and has dealer's physical damage (open lot) including transit insurance coverage in amounts not less than those set forth in subparagraph (A) of this paragraph.

(D) If the required insurance coverage expires or is canceled, and proof of replacement coverage is not received prior to the expiration date or date of cancellation, the installer's license is automatically terminated.

(2) The installer responsible for the installation in accordance with the provisions of §80.119 of this title (relating to Installation Responsibilities) shall maintain a file containing a copy of the installation report as filed with the department.

(f) Homeowner's Temporary Installation.

(1) A homeowner may apply for a temporary license as an installer for the purpose of installing such owner's used manufactured home. The application shall be submitted on a form and contain such information as required by the department, and it must be accompanied by a cashier's check or money order payable to TDHCA in payment for the required fee. The issuance of a homeowner's temporary installer's license by the department shall not relieve any warranty responsibility required by the Standards Act except for damage or defects which may occur as a result of the installation of the home by the homeowner.

(2) The application must be accompanied by a certificate of insurance issued by the insurance carrier or its authorized agent to prove insurance coverage for the installation of the home as follows: public liability insurance coverage including completed operations in an amount of not less than $300,000 for bodily injury each occurrence and property damage insurance in an amount of not less than $100,000 each occurrence, for which a combined single limit of $300,000 will be considered to be in compliance with this section; and motor vehicle liability insurance coverage of not less than $250,000 bodily injury each person, $500,000 bodily injury each occurrence and $100,000 property damage each occurrence, for which a combined single limit of $500,000 will be considered to be in compliance with this section. A copy of the home manufacturer's installation instructions, custom designed installation instructions stamped by a Texas licensed professional engineer or architect, or an installation plan with details and specifications conforming to the state's generic standards shall accompany the application.

(3) Upon approval of the application, the homeowner will be issued a temporary license for the installation of that home set out in the application and a temporary installer's (TI) number. The temporary license shall be valid only for thirty (30) calendar days.

(4) The temporary installer's (TI) number must be displayed on the back of the home in letters and figures not less than 8 inches in height when the home is moved over the roads, streets, or highways in this state.

(g) Salesperson.

(1) A salesperson means an individual, partnership, company, corporation, association, or other group who, for any form of compensation, sells or lease-purchases or offers to sell or lease-purchase manufactured housing to consumers as an employee or agent of a retailer or broker. A person or entity licensed as a retailer or broker with the department is not required to be licensed as a salesperson, and the owner of a sole proprietorship, a partner in a partnership, or an officer in a corporation which is duly licensed does not need a salesperson's license so long as such individual is listed in the ownership of the application filed with the department.

(2) The salesperson is an agent of the retailer or broker for whom sales or lease-purchases, or offers, are made. This includes the general manager, sales manager, office manager or anyone involved in showing and offering homes for sale. The retailer or broker is liable and responsible for the acts or omissions of a salesperson in connection with the sale or lease-purchase of a manufactured home. It is a violation of the Standards Act and this chapter for a retailer or broker of manufactured housing to employ a salesperson who is not licensed with the department.

(3) An application for license must be made by every salesperson. Each applicant for a salesperson's license must file with the department an application for license on a form provided by the department containing:

(A) the full legal name, permanent mailing address, date of birth, telephone number, Texas driver's license number or Texas identification number, and social security number of the applicant;

(B) places of employment of the applicant for the preceding three (3) years, providing the name of firm(s), address(es), and dates of employment; and

(C) a statement that the applicant is the authorized agent for a manufactured housing retailer or broker; the statement shall be signed by the employer. If there is a change in name, address, telephone, email address, or employer, an amended application must be submitted to the department within ten (10) calendar days of this change.

(4) Except as may otherwise be authorized, the fee for a salesperson's license shall be submitted to the department in the form of a cashier's check or money order. Salesperson licenses shall be valid for a period of one (1) year from the date of issuance.

(5) Payment of the renewal fee shall be made by the salesperson and submitted to the department along with the completed license renewal notice prior to the expiration of the current license.

(6) Salespersons shall be issued a license card by the department containing effective date and license number. The salespersons shall be required to present a valid license card upon request.

(h) Applicable License Holder Ownership Changes.

(1) A license holder shall not change the location of a licensed business unless the license holder first files with the department:

(A) a written notification of the address of the new location;

(B) an endorsement to the bond reflecting the change of location; and

(C) the original license.

(2) The change of location is not effective until the notification and endorsement are received by the department.

(3) For a change in ownership of less than fifty percent (50%) of the licensed business entity, no new license is required provided that the existing bond or other security continues in effect. However, the current Articles of Incorporation or Assumed Name Certificate must accompany the request.

(4) For a change in ownership of fifty percent (50%) or more, the license holder must file with the department, along with the appropriate fee and Articles of Incorporation or Assumed Name Certificate:

(A) a license addendum by the purchaser providing information as may be required by the department; and

(B) certification by the surety that the bond for the licensed business entity continues in effect after the change in ownership; or

(C) an application for a new license along with a new bond or other security and proof that the education requirements of §1201.113 of the Standards Act, have been met.

(i) Education Requirements. Effective September 1, 1987, all applicants for license, except salespersons, shall attend and complete 20 hours of educational instruction as required by the Standards Act and this chapter. A manufacturer may request a one-day in-plant training session be presented by the department in lieu of completing the instruction requirement. The license will not be issued until the owner, partner, corporate officer, or other person who will personally have the day-to-day management responsibility for the business location, or the salesperson to be licensed, attends and completes this educational requirement. Except as provided in §80.123(o), this section shall not apply to the renewal of licenses, nor to the license of additional business locations.

(j) Approving a training program conducted by a nonprofit educational institution or foundation as sanctioned by §1201.104(c)(2) of the Standards Act.

(1) An organization requesting approval to conduct the educational course required by the Standards Act must file a course approval request and course materials at least ninety (90) calendar days before the date of the first scheduled presentation. The director shall deliver a written notice of approval or denial no later than thirty (30) calendar days after receiving the request. If denied, the requestor may resubmit the course with corrections. The director will deliver a written notice of approval or denial no later than fifteen (15) calendar days after receiving the re-submittal.

(A) Approval of Training Program: The director will approve the training program if the requirements in this subsection are met and the materials submitted comply with the required course topics in paragraph (3) of this subsection.

(B) Denial of Training Program: The director will not approve the training program if the requirements are not met and the materials submitted do not comply with the required course topics in paragraph (3) of the subsection. The requestor will receive a written notice detailing the reason(s) for the denial. The requestor may re-submit the course with corrections as mentioned in paragraph (1) of this subsection.

(2) As a prerequisite for a license, the course must be twenty (20) hours in length and instruct the potential attendee in the law and consumer protection regulations.

(3) An educational training course shall consist of the following topics:

(A) Presentation of the Law and Rules.

(i) Occupations Code, Chapter 1201, the Standards Act

(ii) Chapter 80, Texas Administrative Code, Administrative Rules

(iii) Texas Finance Code (applicable sections)

(iv) Texas Transportation Code (applicable sections)

(v) Federal Truth -in-Lending Act

(vi) Property Code

(B) Statement of Ownership and Location.

(i) Seals

(ii) Application Fees

(iii) Application Processing

(iv) Description of Forms

(v) Property Election

(C) Licensing.

(i) Manufacturer Application Form Requirements

(ii) Retailer Application Form Requirements

(iii) Installer Application Form Requirements

(iv) Salesperson Application Form Requirements

(v) Broker Application Form Requirements

(vi) Salvage/Rebuilder Application Form Requirements

(vii) Insurance and Bond Requirements

(viii) License Renewal and Revision Requirements

(ix) Sale of non-habitable homes

(x) Retailer and Installer Responsibilities

(D) Installations.

(i) Anchoring, supporting, and multi-section connecting standards

(ii) Requirements for Completing the Installation Inspection Report Form

(E) Consumer Complaints.

(i) Consumer Complaint Process

(ii) Delivery of Warranty

(iii) Correction Requirements

(iv) Requirements for Completing the Complaint Forms

(F) Dispute Resolution.

(i) Dispute Resolution Process

(ii) Texas Government Code, Chapter 2306

(iii) Federal Trade Commission Manual: "How to Advertise Consumer Credit"

(iv) Business & Commerce Code, Deceptive Trade Practices (applicable sections)

(4) The training organization must provide each attendee of the class with written proof of having completed the entire 20 hour course.

(5) The primary administrator for the training program will be notified by the director of changes to the Law and Rules and the date that the changes will become effective.

(6) The director may revoke course approval for failure to comply with the standards or procedures set forth in this subsection. Unless surrendered or revoked for cause, the approval will be valid for a period of two (2) years.

(k) Denial, Suspension, Renewal Denial, or Revocation of License Relating to Repeat Violations of the Standards Act or Department Rules.

(1) The following criteria shall be utilized to determine whether an applicant shall be issued or renewed a license if the applicant within the last two years from the date of the application has:

(A) two Agreed Final Orders of the same kind or type of violations; or

(B) one Final Order of the same kind or type of violations.

(2) If the department suspends, revokes, or denies renewal of a valid license, or denies a person's license or the opportunity to be examined for a license in accordance with this subsection because of the person's prior violations history, the department shall:

(A) notify the person in writing stating reasons for the suspension, revocation, renewal denial, denial of disqualification; and

(B) offer the person the opportunity for a hearing on the prior violation history.

(l) Denial, Suspension, Renewal Denial, or Revocation of License relating to the history of non-compliance with the Standards Act and Rules.

(1) The department will consider the background of the applicant, license holder, sole proprietor, partner officer, managing employee, chief executive officer, chief executive operating officer, and directors of a corporation.

(2) In the evaluation the department will consider the non-compliance history with the Standards Act and this chapter and will comply with the Texas Government Code, Chapter 2001, in proceeding with denial, suspension, or revocation of a license.

(m) Denial, Suspension, Renewal Denial, or Revocation of License Relating to Criminal Background.

(1) The following criteria shall be utilized to determine whether an applicant shall be issued a license if that applicant states in his/her application for said license that he/she has a record of criminal convictions within five (5) years preceding the date of the application:

(A) the nature and seriousness of the crime;

(B) the relationship of the crime to the intended manufactured housing business activity;

(C) the extent to which a license holder might engage in further criminal activity of the same or similar type as that in which the applicant previously had been involved;

(D) the relationship of the crime to the ability, capacity, or fitness required to perform the duties and discharge the functions and responsibilities of the license holder's occupation or industry; and

(E) whether the offenses were defined as crimes of moral turpitude by statute or common law, from Class A misdemeanors to first, second, and third degree felonies carrying fines and/or imprisonment or both. Special emphasis shall be given to the crimes of robbery, burglary, theft, embezzlement, sexual assault, and conversion.

(2) In addition to the factors that may be considered in paragraph (1) of this subsection, the department, in determining the present fitness of a person who has been convicted of a crime, may consider the following:

(A) the extended nature of the person's past criminal activity;

(B) the age of the person at the time of the commission of the crime;

(C) the amount of time that has elapsed since the person's last criminal conviction;

(D) the conduct and work activity of the person prior to and following the criminal conviction;

(E) evidence of the person's rehabilitation or attempted rehabilitation effort while incarcerated or following release; and

(F) other evidence of the person's present fitness, including letters of recommendation from prosecution, law enforcement, and correctional officers who prosecuted, arrested, or had custodial responsibility for the person; the sheriff and chief of police in the community where the person resides; and any other persons in contact with the convicted person.

(3) It shall be the responsibility of the applicant to the extent possible to secure and provide to the department the recommendations of the prosecution, law enforcement, and correctional authorities as required by this subsection.

(4) The applicant shall furnish proof in any form, as may be required by the department, that he/she has maintained a record of steady employment and has otherwise maintained a record of good conduct and has paid all outstanding court costs, supervision fees, fines, and restitution as may have been ordered in all criminal cases in which the applicant was convicted.

(5) If the department suspends or revokes a valid license, or denies a person a license or the opportunity to be examined for a license in accordance with this subsection because of the person's prior conviction of a crime and the relationship of the crime to the license, the department shall:

(A) notify the person in writing stating reasons for the suspension, revocation, denial, or disqualification; and

(B) offer the person the opportunity for a hearing on the record.

(n) License Renewal Requirements. It is the responsibility of the license holder to renew the license prior to its expiration date.

(1) The department will mail each license holder a renewal notice and application for renewal at least forty-five (45) calendar days prior to the date on which the current license expires. Notice will be mailed to the last known address indicated in department records.

(2) In order to prevent the expiration of a certificate of license, all applications for license renewals must be received by the department prior to the date on which the current license expires.

(3) If an application for license renewal is received by the department after the date on which the current license expires, the license will not be reinstated except with approval of the director. The director may require a hearing prior to reinstatement.

(4) All renewal licenses and a reinstatement license approved by the director shall be dated as of the day following the date on which the current license expires.

(o) Continuing Education Requirements.

(1) Covered persons. The following persons are deemed to be engaged in sales of manufactured housing and, therefore, must be certified as having completed eight (8) hours of approved continuing education each year in order to renew any license as a retailer, broker, or salesperson on or after January 1, 2005:

(A) Any principal of any sole proprietorship or business organization that is licensed as a retailer or broker. As used herein a person is deemed to be a principal if they are an officer, manager, or other person participating in making management or policy decisions for the licensee;

(B) Any agent or other representative of any retailer or broker that is involved in any activity of that retailer or broker relating to the marketing or sale of manufactured homes to consumers, not including a person whose sole involvement is ministerial, clerical, or incidental;

(C) Any licensed salesperson.

(2) Approval of courses and providers. In order to be considered for approval by the Board to provide continuing education courses a party wishing to be considered for such approval must submit, for each course for which approval is sought, a letter application, accompanied by a nonrefundable processing fee of $300, and the following:

(A) A narrative overview of the course, describing subject matter to be covered;

(B) Brief biographies, including credentials, of each instructor;

(C) A copy of any course materials to be used. If the course materials are deemed to be proprietary they should be placed in a separate envelope, marked confidential, and accompanied by a written statement as to why they should not be treated as open records. There is no assurance that such materials will ultimately be accorded any exemption from disclosure under the Open Records provisions of the Government Code. If the course is to be offered online, a hard copy of the material as well as an electronic version must be submitted.

(D) A schedule of fees to be charged for the course;

(E) As such information becomes available, an indication as to the locations, times, and dates for offerings, or if provided online, instructions for how and when the course may be taken; and

(F) Such other information as the Department may require.

(3) Once the staff determines that a request for approval is complete, that request will be placed on the next regularly scheduled meeting of the board of Directors for consideration. The staff will provide the board with a written recommendation on each such request. The staff will advise the applicant of the board's action within ten (10) working days of the date of the board meeting, including a written statement as to any limitations, conditions, or other requirements imposed.

(A) Approvals shall be for a period not to exceed two years. The Director may, at no cost, send a representative to attend any approved course to determine that the course is being taught in accordance with the terms of approval.

(B) The Director may revoke or suspend approval of a course if the Director determines that the course is not being taught in accordance with the terms of approval or that the course is not being administered in accordance with the law or these rules. Any action to revoke or suspend such an approval is a contested matter under Chapter 2001, Government Code, and the party against whom revocation or suspension is sought may make a written request for a hearing before an Administrative Law Judge. If no such hearing is requested within thirty (30) calendar days after receipt of notice from the Director, the Director's order of suspension or revocation shall become final.

(p) Application and Appeals.

(1) Initial application processing.

(A) It is the policy of the department to issue the license within seven (7) working days after receipt of all required information and the following conditions have been met:

(i) all required forms are properly executed; and

(ii) all requirements of applicable statutes and department rules have been met.

(B) License applications and accompanying documents received shall be processed and issued within seven (7) working days if all conditions for license have been met.

(C) License applications and accompanying documents found to be incomplete or not properly executed shall be returned to the applicant with an explanation of the specific reason and what information is required to complete license. Upon receipt of all required information, the license will be issued within seven (7) working days.

(D) Upon written request, the department will call the license holder and provide the license number assigned.

(2) Appeals. Applicants may appeal any dispute arising from a violation of the time periods set for processing an application. An appeal is perfected by filing with the director a letter explaining the time period dispute. The letter of appeal must be received by the director no later than twenty (20) calendar days after the date of the letter of explanation from the department outlined in paragraph (1)(C) of this subsection. The department will decide the appeal within twenty (20) calendar days of the receipt of the letter of appeal by the director.

§80.124.Deposits and Down Payments.

(a) The retailer, salesperson, or agency of the retailer shall not retain or keep a deposit except in accordance with this section.

(b) A deposit on a home in inventory must be refunded within fifteen (15) calendar days following the date of written notice from the depositing consumer requesting the refund. The retailer must hold the home in inventory for purchase by the consumer making the deposit until the deposit is refunded. The retailer may refund the deposit at any time to the depositing consumer, but the retailer must not sell the home to any other consumer until the deposit on the home in inventory has been refunded.

(c) A retailer may require an earnest money deposit on a specially ordered manufactured home only if:

(1) an earnest money contract has been signed by all parties;

(2) if applicable, the original binding loan commitment letter issued by the lender is delivered to the consumer; and

(3) the consumer has not rescinded the contract under §1201.1521 in the Standards Act.

(d) A deposit on a special ordered home which is not in inventory must be refunded within fifteen (15) calendar days following the date of written notice from the depositing consumer requesting the refund under the following conditions:

(1) The retailer, salesperson, or agent does not have record of the consumer being given conspicuous written notice of the requirements for retaining the deposit as set forth by §1201.151 in the Standards Act, along with all of the notices and forms required by the Standards Act to be given to the consumer prior to the execution of any mutually binding contract.

(2) The special ordered home is delivered or ready to be delivered and fails to conform to the specifications or representations, if any, made to the consumer by the retailer.

(e) On a special ordered home which is not in inventory, the retailer may retain the deposit provided that:

(1) the home conforms to the specifications of the special order and the representations, if any, made to the consumer are not altered without the consumer's consent;

(2) the consumer fails or refuses to accept delivery and installation of the home by the retailer; and

(3) the consumer is given conspicuous written notice of the requirements for retaining the deposit as set forth in this subsection along with all of the notices and forms required by this chapter to be given the consumer prior to the execution of any mutually binding contract.

(f) The retailer may not retain more than five percent (5%) of the estimated cash price of the home which is specially ordered, and the retailer must refund any amount of the deposit which exceeds five percent (5%).

(g) In a financed transaction, the deposit becomes the down payment, or part thereof, following credit approval and the execution of a retail installment sales contract, and the provisions of this section do not apply.

(h) To ensure that the down payment required by the creditor in a financed transaction is actually received by the retailer at the time of the execution of the contract or document, the actual source of the funds for the down payment must be verified by the consumer, the retailer, and the salesperson on a form prescribed by the department. The Down Payment Verification Affidavit must be signed and notarized by the consumer, the retailer, and the salesperson prior to the execution of a retail installment sales contract or agreement.

(i) This Down Payment Verification Affidavit must denote in at least 14 point bold font "The amount of my down payment is the true amount noted on my retail installment contract."

(j) The provisions of this section do not apply to a deposit or funds held in an escrow account in connection with a real estate transaction.

§80.126.Rules for Hearings.

(a) Unless otherwise expressly set forth in the Standards Act or this chapter, all hearings shall be held and conducted pursuant to the applicable provisions of Government Code, Chapter 2001.

(b) Any party to a hearing may request that a record of the hearing be made and transcribed by an independent court reporter, other than an employee of the department. Such request must be made not later than seven (7) calendar days prior to the hearing. The additional cost and expense of the independent court reporter may be assessed against the party making the request. In all hearings, the published rules and regulations of the secretary of HUD shall be considered, if relevant. If the department believes that such rules and regulations are relevant to any issue to be involved in the hearing, the notice of hearing shall specifically refer to such HUD rules and regulations.

(c) If, after receiving notice of a hearing, a party fails to appear in person or by representative on the day and time set for hearing or fails to appear by telephone in accordance with Government Code, Chapter 2001, the hearing may proceed in that party's absence and a default judgment may be entered.

(d) Any person for whom a license was revoked, denied, or suspended by a final order issued after a hearing under Government Code, Chapter 2001, may only be issued a new license after a hearing under Government Code, Chapter 2001, and determination by the director that the certificate of license may be issued.

(e) Pursuant to the Administrative Procedures Act, each party has the right to file exceptions to the Proposal for Decision and present a brief with respect to the exceptions. All exceptions must be filed with the department within ten (10) working days of the Proposal for Decision, with replies to be filed ten (10) working days after the filing of exceptions.

(f) When an administrative hearing is held for any matter in which the Department seeks to take action against a licensee for violating the Standards Act or these rules, whether such action is an action to assess administrative penalties, to require corrective action, to require cessation of improper activities, to suspend or revoke a license, or any combination thereof, the Department shall assess the costs of the proceeding against any party that fails to appear at a duly noticed administrative hearing. The costs assessed shall be the greater of $100 or the actual costs charged to the Department by the State Office of Administrative Hearings, the Office of the Attorney General, any court reporter, or any other third party providing services in connection with such hearing.

(g) The Department will seek the recovery of its costs from any party against whom it initiates an action if that action results in the entry of a final order taking any administrative action against that party, including the assessment of administrative penalties, requiring corrective action, requiring cessation of improper activities, suspension or revocation of a license, or any combination thereof.

§80.136.Homes Acquired on or after January 1, 2002.

(a) When a retail sale of a manufactured home occurs and that home will be treated as real property under §1201.2055 of the Standards Act:

(1) The closing of that sale must occur at either a title company authorized to do business in Texas, an attorneys' office, or an office of a federally insured depository institution, regardless of whether the manufactured home or the real property on which it will be located is or will be the homestead of the purchaser.

(2) The method or manner of installation must be supported by documentation establishing the particular requirement with which it complies and the basis on which it was concluded that such particular requirement and particular department standard were met, such as a report by:

(A) an FHA, FNMA, or FHLMC approved inspector;

(B) an engineer, architect, real estate inspector, or appraiser licensed by the state of Texas; or

(C) an inspector employed by and inspecting for the state of Texas or a local government in Texas.

(b) When a manufactured home is installed or re-installed, the licensed installer (or, in the case of a retail sale of a new home, the retailer) shall provide to the Department a statement as to the name of the legal owner(s) of the property on which such manufactured home is being installed.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 16, 2004.

TRD-200401989

Timothy K. Irvine

Executive Director, Manufactured Housing Division of TDHCA

Texas Department of Housing and Community Affairs

Effective date: May 2, 2004

Proposal publication date: September 19, 2003

For further information, please call: (512) 475-2206