1-1 AN ACT
1-2 relating to the licensing and regulation of manufactured housing.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 3(1), Texas Manufactured Housing
1-5 Standards Act (Article 5221f, Vernon's Texas Civil Statutes), is
1-6 amended to read as follows:
1-7 (1) "Advertising" or "advertisement" means any
1-8 commercial message which promotes the sale, exchange, or
1-9 lease-purchase of manufactured homes and which appears in, or is
1-10 presented on, radio, television, a public-address system,
1-11 newspapers, magazines, leaflets, flyers, catalogs, direct mail
1-12 literature, other printed material, electronic media, an inside or
1-13 outside sign or window display, or in point-of-sale literature or
1-14 price tags. Materials which are educational or that may be
1-15 required by law do not constitute advertising. Any advertisement
1-16 relating to manufactured housing shall be considered as an offer to
1-17 sell, exchange, or lease-purchase to consumers.
1-18 SECTION 2. Section 4, Texas Manufactured Housing Standards
1-19 Act (Article 5221f, Vernon's Texas Civil Statutes), is amended to
1-20 read as follows:
1-21 Sec. 4. MANUFACTURED HOUSING STANDARDS. (a) The director
1-22 shall adopt standards and requirements for the installation and for
1-23 the construction of manufactured housing, that are reasonably
1-24 necessary in order to protect the health, safety, and welfare of
2-1 the occupants and the public. The collection of these standards
2-2 and requirements is the Texas Manufactured Housing Code.
2-3 (b) [The requirements and standards for the plumbing,
2-4 heating, air-conditioning and electrical systems and construction
2-5 of manufactured homes in effect on September 1, 1989, remain in
2-6 full force and effect until amended in accordance with the
2-7 procedure set forth in this section.]
2-8 [(c)] The director shall adopt standards and requirements
2-9 for the construction of HUD-code manufactured homes in compliance
2-10 with the federal standards and requirements established under
2-11 Title VI of the Housing and Community Development Act of 1974,
2-12 entitled the National Manufactured Home Construction and Safety
2-13 Standards Act of 1974.
2-14 (c) [(d)] The director shall adopt standards and
2-15 requirements for the installation of all manufactured housing in
2-16 the state that are necessary for the protection of the health,
2-17 safety, and welfare of all the citizens. The standards must assure
2-18 that the installation of manufactured housing on both permanent and
2-19 nonpermanent foundation systems resists overturning and lateral
2-20 movement of the housing according to the design loads for the
2-21 particular wind zone for which the housing was constructed.
2-22 (d) [(e) The requirements and standards for the installation
2-23 of manufactured homes as adopted by the state in existence on
2-24 September 1, 1989, remain in force until amended in accordance with
2-25 the procedure set forth in this section.]
2-26 [(f)] All manufactured housing must be installed in
2-27 compliance with the standards, rules, regulations, or
3-1 administrative orders of the director. The department shall
3-2 establish an inspection program whereby at least 25 percent of the
3-3 manufactured homes installed are inspected on a sample basis for
3-4 compliance. The department's program shall place priority on
3-5 multi-section homes and homes installed in Wind Zone II.
3-6 (e) [(g)] A local governmental unit of this state, without
3-7 the express approval of the board following a hearing on the
3-8 matter, may not adopt different standards from those promulgated by
3-9 the director for the construction or installation of manufactured
3-10 housing within the local governmental unit. The local governmental
3-11 unit must demonstrate that the public health and safety require the
3-12 different standards.
3-13 (f) [(h)] Before the adoption or promulgation of any
3-14 standards or requirements authorized by this section, any change in
3-15 or addition to the standards authorized in this section, or the
3-16 approval of different standards by any local governmental unit, the
3-17 director shall publish a notice and conduct a public hearing under
3-18 Section 9 of this Act.
3-19 (g) [(i)] Every requirement or standard or modification,
3-20 amendment, or repeal of a requirement or standard adopted by the
3-21 director shall state the date it shall take effect as provided by
3-22 Section 9 of this Act.
3-23 (h) [(j)] The department shall cooperate with all units of
3-24 local government in this state and shall authorize local units of
3-25 government, on request, to make and perform inspection and
3-26 enforcement activities related to the construction of foundation
3-27 systems and the erection and installation of manufactured housing
4-1 at the homesite pursuant to contracts or other official
4-2 designations and the rules and regulations of the director. The
4-3 department shall notify each local governmental unit biennially in
4-4 writing to advise the local governmental unit of the program for
4-5 contracting installation inspections. The department shall
4-6 encourage local building inspection officials to perform
4-7 enforcement and inspection activities for manufactured housing
4-8 installed within the local governmental unit and may establish
4-9 cooperative inspection training programs. The department may
4-10 withdraw the authorization if the local governmental unit fails to
4-11 follow the rules, regulations, interpretations, and written
4-12 instructions of the department.
4-13 SECTION 3. Section 6, Texas Manufactured Housing Standards
4-14 Act (Article 5221f, Vernon's Texas Civil Statutes), is amended by
4-15 amending Subsections (h) and (l) and adding Subsection (m) to read
4-16 as follows:
4-17 (h) It is unlawful for a person to sell, convey, or
4-18 otherwise transfer to a consumer in this state a [salvaged]
4-19 manufactured home for which a salvage title has been issued under
4-20 [as such term is defined in] Section 8 of this Act. A salvaged
4-21 manufactured home may only be sold to a licensed retailer or
4-22 licensed rebuilder.
4-23 (l) It is unlawful for a retailer or a salesperson to aid or
4-24 assist a consumer in preparing or providing false or misleading
4-25 information on a document related to the purchase or financing of a
4-26 manufactured home or for a salesperson to submit information known
4-27 to be false or misleading to a retailer or for a retailer or a
5-1 salesperson to submit information known to be false or misleading
5-2 to a credit underwriter or lending institution.
5-3 (m) It is unlawful for a retailer, salesperson, or agent of
5-4 the retailer to refuse to refund a consumer's deposit except in
5-5 accordance with this subsection.
5-6 (1) The deposit must be refunded within 15 days
5-7 following the receipt of written notice from the consumer
5-8 requesting the refund.
5-9 (2) If a retailer, salesperson, or agent of the
5-10 retailer violates the provisions of this subsection, the consumer
5-11 may recover, cumulative of other remedies, three times the amount
5-12 of the deposit plus reasonable attorney's fees.
5-13 (3) The consumer's deposit may only be retained if:
5-14 (A) the consumer specially orders a home from
5-15 the manufacturer because the home is not in the retailer's
5-16 inventory;
5-17 (B) the home conforms to the specifications of
5-18 the special order and the representations, if any, made to the
5-19 consumer;
5-20 (C) the consumer fails or refuses to accept
5-21 delivery and installation of the home by the retailer; and
5-22 (D) the consumer was given conspicuous written
5-23 notice of the requirements for retaining the deposit.
5-24 (4) The retailer must not retain more than five
5-25 percent of the estimated cash price of the home which is specially
5-26 ordered and must refund any amount of the deposit which exceeds
5-27 five percent.
6-1 (5) This subsection does not apply to a deposit in
6-2 escrow in a real estate transaction nor to a down payment as shown
6-3 on an executed retail installment sales contract.
6-4 SECTION 4. Texas Manufactured Housing Standards Act (Article
6-5 5221f, Vernon's Texas Civil Statutes) is amended by adding Section
6-6 6A to read as follows:
6-7 Sec. 6A. LAND-HOME REGULATIONS. (a) This section is
6-8 applicable to those transactions in which the manufactured home
6-9 will be sold as personal property and titled under Section 19 of
6-10 this Act. This section does not apply to real estate transactions
6-11 when the manufactured home is, or will become, real estate under
6-12 Section 2.001, Property Code.
6-13 (b) The retailer is prohibited from selling, or representing
6-14 for sale, or offering for sale any real estate in conjunction with
6-15 the sale of a manufactured home except as may be authorized by the
6-16 department consistent with the provisions of The Real Estate
6-17 License Act (Article 6573a, Vernon's Texas Civil Statutes).
6-18 SECTION 5. Section 7, Texas Manufactured Housing Standards
6-19 Act (Article 5221f, Vernon's Texas Civil Statutes), is amended by
6-20 amending Subsections (o) and (q) and adding Subsection (s) to read
6-21 as follows:
6-22 (o) Any person not licensed or registered with the
6-23 department or a predecessor agency as of September 1, 1987, must
6-24 attend and complete twenty (20) hours of instruction in the law and
6-25 consumer protection regulations as a prerequisite for a license.
6-26 The instruction shall be given not less than one time each quarter.
6-27 No test shall be made a prerequisite of licensing, but actual
7-1 attendance at the instruction sessions is required. The director
7-2 shall not issue a license until the instruction is completed. This
7-3 subsection does not apply to a license holder or registrant making
7-4 application to license additional business locations, to renew or
7-5 reinstate a license, or to make application for licensing as a
7-6 salesperson. In lieu of this instruction requirement, a
7-7 manufacturer may request that a one-day, in-plant training session
7-8 be presented by an authorized representative of the department.
7-9 The manufacturer shall reimburse the department for the actual
7-10 costs of the training session.
7-11 (q) In lieu of the instruction requirements imposed under
7-12 Subsection (o) of this section, the director may recognize and
7-13 approve a training program for an applicant for a license
7-14 [installers] that is conducted by a nonprofit educational
7-15 institution or foundation [in the field by a private institution or
7-16 other person].
7-17 (s) A person who is licensed as a broker or salesperson
7-18 under The Real Estate License Act (Article 6573a, Vernon's Texas
7-19 Civil Statutes) may act as a manufactured housing broker or
7-20 salesperson and is not required to be licensed or post bond or
7-21 other security under this Act, provided negotiations for the sale,
7-22 exchange, or lease-purchase of the manufactured home are conducted
7-23 on behalf of a person for whom the real estate licensee otherwise
7-24 acts as a real estate broker or salesperson.
7-25 SECTION 6. Sections 8(b) and (g), Texas Manufactured Housing
7-26 Standards Act (Article 5221f, Vernon's Texas Civil Statutes), are
7-27 amended to read as follows:
8-1 (b) It is unlawful for a person to sell, exchange, or
8-2 lease-purchase any used manufactured home to a consumer for use as
8-3 a dwelling or residence without giving a written warranty that the
8-4 manufactured home is habitable. The consumer has 60 days after the
8-5 date of the sale, exchange, or lease-purchase agreement to notify
8-6 the seller in writing of any defects that make the home
8-7 uninhabitable. Failure to give this required notice terminates any
8-8 obligations and liabilities of the seller under this section. The
8-9 warranty must conspicuously disclose this requirement to the
8-10 consumer. If the sale, exchange, or lease-purchase is to a
8-11 purchaser for the purchaser's business use, the manufactured home
8-12 need not be habitable; however, the title to the home shall be
8-13 surrendered to the department for cancellation by the seller.
8-14 "Business use" means any use other than for a dwelling or
8-15 residence. This subsection does not apply to a sale, exchange, or
8-16 lease-purchase from one consumer to another consumer.
8-17 (g) For the purposes of this Act, a "salvaged" manufactured
8-18 home means a manufactured home that has been scrapped, dismantled,
8-19 or destroyed or for which an insurance company has paid the full
8-20 insured value [obtained by a property and casualty insurer from the
8-21 insured by reason of the insurer's payment of the policy value
8-22 written on the home to the insured]. The reasonableness of the
8-23 insurer's judgment that the costs of repair to the home would
8-24 exceed the insured value of the home does not affect the status of
8-25 the home as salvage. The person possessing the original document
8-26 of title to a used [salvaged] manufactured home that is salvaged
8-27 must surrender such document of title to the director for
9-1 cancellation of the title and issuance of a salvage title. If a
9-2 new manufactured home becomes salvaged, the retailer must remove
9-3 the label and must surrender the label along with the
9-4 manufacturer's certificate of origin to the director for issuance
9-5 of the salvage title. If the manufactured home is rebuilt in
9-6 accordance with the provisions of this Act and the rules and
9-7 regulations of the director, the director shall issue, upon proper
9-8 application, a [new original] document of title in lieu of the
9-9 salvage title.
9-10 SECTION 7. Sections 9(e) and (g), Texas Manufactured Housing
9-11 Standards Act (Article 5221f, Vernon's Texas Civil Statutes), are
9-12 amended to read as follows:
9-13 (e) All rules shall be promulgated and adopted in accordance
9-14 with Chapter 2001, Government Code, and with the provisions of this
9-15 section. Public and administrative hearings shall be held in
9-16 Travis County unless all parties agree to another location.
9-17 (g) A rule, amendment to a rule, or repeal of a rule as
9-18 finally adopted shall be published in the Texas Register and
9-19 include a statement of the effective date. The effective date of a
9-20 rule relating to installation standards shall be not less than 60
9-21 days following the date of publication of notice that the rule has
9-22 been adopted. All other rules are effective 30 days following the
9-23 date of publication [Any other rule is effective as provided by
9-24 Chapter 2001, Government Code, or such later date as is published].
9-25 SECTION 8. Sections 14(d), (i), and (j), Texas Manufactured
9-26 Housing Standards Act (Article 5221f, Vernon's Texas Civil
9-27 Statutes), are amended to read as follows:
10-1 (d) The retailer shall give the consumer a written warranty
10-2 that the installation of the new HUD-code manufactured home at the
10-3 initial homesite will be completed in accordance with all
10-4 standards, rules, regulations, administrative orders, and
10-5 requirements of the department and that any appliances or equipment
10-6 included with the sale of the home to be installed by the retailer
10-7 have been, or will be, installed in accordance with the
10-8 instructions or specifications of the manufacturer of the appliance
10-9 or equipment and are free from defects in materials or workmanship.
10-10 The retailer's warranty is for a period of one year from the date
10-11 of initial installation of the home at the consumer's homesite.
10-12 The retailer must give the consumer a copy, or a general
10-13 description, of the manufacturer's new home construction warranty
10-14 and the retailer's installation warranty prior to the signing of
10-15 any binding retail installment sales contract or other binding
10-16 purchase agreement. At the time of the initial installation at the
10-17 consumer's homesite, the retailer must deliver [shall deliver to
10-18 the consumer at the time the contract of sale is signed] the
10-19 following documents:
10-20 (1) the manufacturer's warranty;
10-21 (2) the retailer's warranty;
10-22 (3) the warranties for all appliances and equipment
10-23 given by the manufacturers of the appliances and equipment included
10-24 with, or installed in, the home; and
10-25 (4) the name and address of the manufacturer and
10-26 retailer to which the consumer is to give notice of warranty
10-27 service requests.
11-1 (i) After receipt of a request for a home inspection, the
11-2 department shall perform an [such] inspection within 30 [15] days.
11-3 Within 10 [five] days following the inspection, the department
11-4 shall mail a written report and orders, if any, to the consumer,
11-5 manufacturer, and retailer by certified mail, return receipt
11-6 requested. The report shall detail each of the consumer's
11-7 complaints, whether or not each complaint is covered by either of
11-8 the warranties and which warranty. The director shall issue
11-9 appropriate orders to the manufacturer or retailer for correction
11-10 or repair of the defects and the time allowed, which must be
11-11 reasonable, for the correction.
11-12 (j) The manufacturer, [and] retailer, and installer shall
11-13 comply with the initial report and warranty service orders of the
11-14 director. The department may issue an amended report and warranty
11-15 orders if all parties receive notification of and are given an
11-16 opportunity to respond to the report and warranty orders. The
11-17 amended report and warranty orders must supersede the initial
11-18 report and warranty orders [Such orders are not contested cases
11-19 within the meaning of Chapter 2001, Government Code, so as to
11-20 provide an opportunity for an adjudicative hearing prior to
11-21 compliance].
11-22 SECTION 9. Section 18, Texas Manufactured Housing Standards
11-23 Act (Article 5221f, Vernon's Texas Civil Statutes), is amended by
11-24 amending Subsections (e) and (g) and adding Subsection (j) to read
11-25 as follows:
11-26 (e) Nothing in this Act shall be construed to modify or
11-27 amend any provisions of The Real Estate License Act, as amended
12-1 (Article 6573a, Vernon's Texas Civil Statutes). The provisions of
12-2 this Act, as amended, shall not apply to a person licensed as a
12-3 real estate broker or salesperson [salesman] pursuant to The Real
12-4 Estate License Act, as amended (Article 6573a, Vernon's Texas Civil
12-5 Statutes), who, as agent of the buyer or seller, negotiates the
12-6 sale or lease of a manufactured home and the real property to which
12-7 it is affixed; provided that the ownership of the manufactured home
12-8 and real property are of record in the same person and that such
12-9 sale or lease shall be in a single real estate transaction.
12-10 (g) A local governmental unit or home-rule city may not
12-11 require any permit, fee, bond, or insurance for the transportation
12-12 and installation of manufactured housing by a licensed retailer or
12-13 installer except as may be approved by the department. This
12-14 subsection does not prohibit the collection of actual costs
12-15 incurred by a local governmental unit or home-rule city that result
12-16 from the transportation of a manufactured home.
12-17 (j) A licensed retailer is a "warehouseman" as defined by
12-18 Section 7.102, Business & Commerce Code, for the storage of
12-19 manufactured homes for hire. The provisions of the Business &
12-20 Commerce Code relating to the storage of goods for hire apply to
12-21 the licensed retailer acting as a warehouseman.
12-22 SECTION 10. Section 19(g), Texas Manufactured Housing
12-23 Standards Act (Article 5221f, Vernon's Texas Civil Statutes), is
12-24 amended to read as follows:
12-25 (g) The owner designated in the original document of title
12-26 must transfer the title on a form prescribed by the director and
12-27 must file the form with the department before a manufactured home
13-1 may be conveyed, transferred, or otherwise disposed of at a
13-2 subsequent sale. The form must include any information the
13-3 director requires and must include a statement that the person
13-4 signing is the owner of the manufactured home and that there are no
13-5 liens on the home except a lien shown on the document of title. If
13-6 an original document of title is unavailable because a previous
13-7 owner or lienholder, or both, cannot be located or because a home
13-8 has been abandoned, a person may apply to the department for a
13-9 replacement title by presenting evidence satisfactory to the
13-10 department that efforts to locate the previous owner or lienholder,
13-11 or both, have been unsuccessful and an affidavit stating that to
13-12 the best of the applicant's knowledge, the applicant is entitled to
13-13 have a good and marketable title to the manufactured home. A title
13-14 to a manufactured home may not pass or vest at a subsequent sale
13-15 until the transfer is executed as provided by this section and an
13-16 application for the issuance of a new document of title is sent to
13-17 the department.
13-18 SECTION 11. Sections 347.303, 347.304, 347.305, and 347.306,
13-19 Finance Code, are repealed.
13-20 SECTION 12. This Act takes effect September 1, 1999, except
13-21 for Section 5, which takes effect January 1, 2000.
13-22 SECTION 13. The importance of this legislation and the
13-23 crowded condition of the calendars in both houses create an
13-24 emergency and an imperative public necessity that the
13-25 constitutional rule requiring bills to be read on three several
13-26 days in each house be suspended, and this rule is hereby suspended,
13-27 and that this Act take effect and be in force from and after its
14-1 passage, and it is so enacted.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1193 was passed by the House on April
7, 1999, by a non-record vote; and that the House concurred in
Senate amendments to H.B. No. 1193 on May 27, 1999, by a non-record
vote; and that the House adopted H.C.R. No. 314 authorizing certain
corrections in H.B. No. 1193 on May 30, 1999, by a non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 1193 was passed by the Senate, with
amendments, on April 29, 1999, by the following vote: Yeas 30,
Nays 0; and that the Senate adopted H.C.R. No. 314 authorizing
certain corrections in H.B. No. 1193 on May 30, 1999, by a
viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor