Part 1.
TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS
Chapter 80.
MANUFACTURED HOUSING
Subchapter E. GENERAL REQUIREMENTS
10 TAC §§80.116 - 80.118
The Manufactured Housing Division of the Texas Department
of Housing and Community Affairs (the "Department") proposes new §§80.116
- 80.118, to clarify responsibilities of installers and brokers and to provide
a license for liquidators.
New §80.116 is proposed to provide a means to sell repossessed manufactured
homes without the need to move the home to a licensed retailer's location.
Currently, repossessing lenders that want to use a licensed retailer to sell
their repossessed homes must move the home to the retailer's lot, since the
retailer can only do business at their licensed location. There are some undesirable
consequences that we hope to eliminate by this new rule. One, it moves a home
unnecessarily, which puts a great deal of stress on the home. Second, it builds
in significant additional costs that the consumer will have to pay. It will
probably cost at least $2,000 to pull the home and clean up the site and cost
at least $2,000 more to reinstall the home. We anticipate the new rule will
eliminate one of those trips, which will reduce the purchase price of that
home, thereby making the home more affordable for the Texas consumer and facilitating
a more rapid disposition of inventory.
The new rule will provide a licensed retailer the opportunity to apply
for a license for a specific location in the field where homes are installed.
The license fee will be $100 and the retailer must obtain a separate bond
for each location. The home would be sold from that location by the person
who holds the license. They will be responsible for providing habitability
warranties. The consumer will be advised of the licensee's main location where
they can address warranty, service, installation, or titling issues.
New §80.117 is proposed to clarify broker responsibilities. The new
rule requires the broker to provide the purchaser with a disclosure statement
that will inform the purchaser if they are dealing with a licensed person
and what responsibilities that person will provide. The new rule will help
to reduce the titling problems we are currently having that appear to be caused
by broker transactions for repossessing lenders.
Figure: 10 TAC §80.117(d)--Broker Disclosure Statement
New §80.118 is proposed to clarify the installer's responsibilities
prior to installing a manufactured home. The new rule requires the installer
to visually inspect the site to ensure it is properly prepared, which includes
determining that the site has no drainage problems, that the site has no inappropriate
organic material, that it does not involve a septic system or other improvement
that will be beneath the home, that access to the site will enable the home
to be brought in without damage, and that all utilities that renders the home
habitable are available at the site. Also, the new rule requires the installer
to confirm the adequacy of the soil for the particular type of anchoring that
will be utilized, requires the installer to maintain a checklist for each
installation performed that addresses each concern noted in this rule for
a period of three years.
Timothy K. Irvine, Executive Director of the Manufactured Housing Division
of the Texas Department of Housing and Community Affairs, has determined that
for the first five-year period that these sections as proposed are in effect
there will be no fiscal implications for state or local government as a result
of enforcing or administering these sections.
Mr. Irvine also has determined that for each year of the first five years
the sections as proposed are in effect the public benefit as a result of enforcing
the sections will be: clarification of responsibilities that will increase
compliance; facilitate a more rapid disposition of inventory, and provide
Texas consumers with a more affordable home. The probable economic costs for
each section of the rules are as follows:
The proposed new §80.116 is expected to have an economic cost to persons/businesses
of $100 for each liquidator's license. There will be a savings of approximately
$2,000 for each home that is not moved from its original installation site,
which additionally will benefit the consumer by not putting unnecessary stress
on the home. There are expected to be no fiscal implications for units of
local government as a result of enforcing or administering the section.
The proposed new §80.117 is expected to have no material economic
costs to persons/businesses who are required to comply with these section
as proposed. There are expected to be no fiscal implications for units of
local government as a result of enforcing or administering the section.
The proposed new §80.118 is expected to have no material economic
costs to persons/businesses who are required to comply with these section
as proposed. There are expected to be no fiscal implications for units of
local government as a result of enforcing or administering the section.
Comments may be submitted to Mr. Timothy K. Irvine, Executive Director
of the Manufactured Housing Division, of the Texas Department of Housing and
Community Affairs, P.O. Box 12489, Austin, Texas 78711-2489 or by e-mail to
tirvine@tdhca.state.tx.us. The deadline for comments is 30 days after publication
in the
Texas Register
.
The new sections are proposed 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 proposed new rules.
§80.116.Liquidator's License.
(a)
A licensed retailer may obtain one or more additional licenses
to be used solely for selling manufactured homes acquired from or sold on
behalf of repossessing or foreclosing lenders. Such a license is referred
to herein as a "Liquidator's License." The licensed retailer that applies
for a Liquidator's License is the sponsor of that license and is responsible
for the conduct of all activity under that Liquidator's License.
(b)
Each such Liquidator's License requires that:
(1)
The licensed location is the location at which the repossessing
or foreclosing lender has one or more manufactured homes to be sold, and until
each such home is sold, it may not be moved to any other location except for
a licensed retail location (not another location licensed under a Liquidator's
License).
(2)
The retailer must obtain a separate bond for each Liquidators
License and such bond must specifically state each location covered by that
bond. Additional locations may be added under a Liquidator's License. A location
may not be used for the sale of a manufactured home until the surety has provided
the Division with evidence that the surety bond covers that location. The
bond must be available for the full amount for each covered location.
(c)
The fee for each location under a Liquidator's license
is $100.
(d)
A Liquidator's License is valid for each location from
the time it becomes effective until all manufactured homes specified as being
at that location are sold or moved to a retail location.
(e)
When a manufactured home is sold under a Liquidator's License:
(1)
The selling retailer must give all required warranties,
including the warranty of habitability and the warranty of good and marketable
title.
(2)
A manufactured home may not be sold under a Liquidator's
License until and unless all ad valorem property taxes have been paid. If
a holder of a Liquidator's License sells a manufactured home without confirming
that all such taxes have been paid, a claim may be made on the surety bond
for the payment of such taxes.
(3)
Give all required notices and disclosures.
(4)
Advise the consumer of the retailer's licensed retail location
that is not licensed under a Liquidator's License. It must notify the consumer
of the right to obtain warranty work from that location.
§80.117.Broker's Responsibilities.
(a)
A broker may not arrange, negotiate, or facilitate the
sale of a manufactured home if that home is at a retail location for which
they are licensed. If a broker arranges, negotiates, or facilities the sale
of a manufactured home from a retail location licensed under someone else,
the selling retailer's responsibilities in the sale may not be disclaimed
or transferred to the broker or to anyone else. When a manufactured home is
sold at a licensed retail location, the purchaser is entitled to rely on and
enforce the purchase as having been made directly from the retailer even though
a broker assisted or participated in the transaction.
(b)
The parties to a brokered transaction must participate
in the execution of the documents to consummate the transaction, although
they may do so by acting through a duly appointed attorney-in-fact or other
lawfully authorized agent. If they participate through an attorney in fact
or other agent, the actual parties must be provided with executed copies of
all such documents.
(c)
A broker must verify that any seller in a transaction in
which they are acting as a broker is either duly licensed or exempt from the
licensing requirements of the Standards Act.
(d)
A broker, prior to arranging, negotiating, or facilitating
a legally binding agreement to purchase a manufactured home, must provide
the purchaser with the following disclosure, properly completed:
(e)
In the event that a broker does not either confirm that
the seller is licensed at the time of the sale or provide the disclosure required
under subsection (d) of this section, the broker shall be responsible for
assuring that the purchaser receives all that he or she would be entitled
to in a purchase from a licensed retailer, including the delivery of a good
and marketable title and the required sixty (60) day habitability warranty.
(f)
It is the broker's responsibility when the seller is a
licensed retailer to see that all required disclosures are timely delivered
to the buyer and to maintain records to show that this was done.
§80.118.Installer's Responsibilities.
(a)
Before installing a manufactured home, the installer must
first determine that the site has been properly prepared and that the home
may be installed thereon by:
(1)
Confirming by means of a visual inspection that:
(A)
the site has no obvious drainage problems, such as visible
depressions, evidence of wet weather creeks or other evidence of run-off in
the event of significant rainfall;
(B)
all inappropriate organic material, refuse, and other items
have been cleared from the site;
(C)
the site does not involve a septic system, well, or other
system or improvement that will be beneath the home when it is installed unless
it has been first determined that this is an appropriate place for such system
or improvement to be located once the home is installed over it;
(D)
access to the site will enable the home to be brought in
and installed without damage to the home from tree limbs, dips, culverts,
or other conditions; and
(E)
that all utilities necessary to render the home habitable
are available at the site.
(2)
Confirming from the party who was responsible for the preparation
of the site that:
(A)
the soil conditions will support the home when installed
in the manner specified without further compaction, grading, or other work;
and
(B)
the soil conditions will be compatible with any anchors
specified.
(b)
Installers shall maintain for a period of three (3) years
a copy of a checklist for each installation performed to document that each
and all of the foregoing requirements have been appropriately addressed.
(c)
In addition to the requirements set forth in subsection
(a) of this section, an installation checklist shall show that the installer
has properly addressed each and all of the following, as applicable:
(1)
No gaps at the close-up; marriage line is properly sealed;
(2)
Chassis bonding wire is properly connected;
(3)
All exits, including emergency egress via windows, work
properly;
(4)
All fixtures are properly secured and connected;
(5)
All utilities are properly connected (or confirm, if a
utility is connected by someone else, such as an electrician, that the person
who did it was qualified and that they did, in fact, perform the connection
service);
(6)
No open uncapped water, sewer, or gas lines;
(7)
All vents are working properly, no vents into enclosed
spaces above or below the living area;
(8)
All installed appliances and all related safety features
are working properly;
(9)
No holes are in bottom board unless properly repaired;
and
(10)
All items specified on sales documents are present and
accounted for or noted in writing as missing.
(d)
The foregoing requirements are in addition to the general
requirement to complete the installation in accordance with the lawful method
specified.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on July 11, 2003.
TRD-200304186
Timothy K. Irvine
Executive Director, Manufactured Housing Division
Texas Department of Housing and Community Affairs
Earliest possible date of adoption: August 24, 2003
For further information, please call: (512) 476-2206