Basics That Every Manufactured Home Professional Must Know-Retailer Responsibilites

We have been talking about some of the basics of the manufactured housing program, and today I want to focus on one particular area of the Manufactured Home Procedural and Enforcement Regulations; Subpart F-Retailer and Distributor Responsibilites.

Before we dig into this discussion, it is important to note that with one exception, the requirements listed in Subpart F only apply to new manufactured homes to the first purchaser.

This subpart lays out three critical elements of the manufactured housing program:

  1. That a retailer may not sell or lease a new manufactured home that does not meet all applicable requirements of the HUD Code (24 CFR 3282.252).
  2. That the retailer must forward any and all information regarding the performance of the home to the manufacturer (24 CFR 3282.256).
  3. That the retailer must inform the manufacturer of the location of any manufactured home they sell, both new and relocated (or used) manufactured homes (24 CFR 3282.255).

Let’s break these down a little bit.

Everyone knows that a new manufactured home is pre-empt from state or local building codes. However, it is easy to forget that preemption is earned by assurance that new manufactured homes meet the federal building code. Without exception!

Manufacturers Certification Label

To put some teeth in the assurance that every new manufactured home meets the HUD Code, retailers are prohibited from selling or leasing a new manufactured home if a code related problem is observed. Unless a new manufactured home meets all applicable code requirements, it cannot even be offered for sale or lease! This prohibition of sale remains in effect until the problem has been corrected by the manufacturer, or the retailer when authorized by the manufacturer to make the repair or correction.

Now, a retailer is not expected to inspect every new home looking for problems, but rather have a basic understanding of the HUD Code and report any possible issues. I think it is a reasonable assumption that all manufactured home retailers have a copy of the Manufactured Home Construction & Safety Standards. If you don’t have a copy of the HUD Code CLICK HERE and print yourself a copy.

This prohibition of sale remains in effect until all goods and services agreed to in the sales contract with the purchaser have been delivered. If installation is included in the sale, then the home must meet the standards throughout the completion of the installation. If you are not providing installation, make sure you are fully disclosing the installation requirements to the purchaser prior to the sale! More on that in a future post.

In my opinion, the most important provision of the manufactured housing program is that retailers must tell the manufacturer of all possible failures to meet the HUD Code. There are no exceptions to this requirement. If you believe that a new manufactured home has a problem, you must report it to the manufacturer. If you get a consumer complaint that might be code related, you must report it to the manufacturer. If you receive information from any source that might suggest a problem with a new manufactured home that you sold, you need to tell the manufacturer. Without exception!

If the home is out of warranty, it doesn’t matter! Tell the manufacturer. Even if the service manager tells you to stop reporting, keep on reporting every possible code violation. Even if the issue concerns an appliance or fixture, the regulations require you to report the issue to the manufacturer and they can make a determination regarding any further action. And equally  important, keep a record of everything you report!

Lastly, a retailer must inform the manufacturer where their homes are installed. Typically, this is done by submitting the purchaser card provided by the manufacturer. If you have ever seen these purchaser cards and wondered why there are three, it is because this requirement goes beyond new home sales, but applies to any relocated manufactured homes as well. The remaining cards are for subsequent sales and/or locations of the home.

Purchaser Cards from Manufacturer to report home location.

If the cards are missing, retailers are still required to send the same information to the manufacturer that the card required, most importantly the serial number of the home and the location.

You never know when the manufacturer may have to take some sort of remedial action or notification to address a problem with a home they have produced. For more information on the purchaser card, check out 24 CFR 3282.255 and 3282.211. Click Here for these regulations

The only exception for this requirement is if the manufacturer is out of business.

That is a quick overview of Subpart F.

There are still other retailer requirements, such as retailer alterations (3282.254),  consumer and dispute resolution disclosures (3282.7 & 3288.5) and proper handling of homes being stored and displayed. For more information on these issues, check out this post from November 2017, Four Things Every Retailer Must Know!

Keep in mind, this is my informal interpretation of these requirements and should never be confused as actual law or regulation.

Four Things Every Retailer Must Know!

If you have attended any of my training courses, you’ve probably heard me say how the entire installation process starts with the retailer. Manufactured home retailers have some very important requirements under federal law that range from disclosing information to consumers, reporting information to the manufacturer and even the handling of home on display at their sales lots!

But here is the problem, far too many manufactured home retailers are either not aware of all of the things they are required to do under the federal program or just misinformed about them. Failing to carry out these tasks can derail a positive sales process and can put the retailer and homeowner in jeopardy.

This post will attempt to outline four of the most important things that retailers should know.  

Consumer Disclosure:    Before the sales contract is executed, retailers are required to provide an informational disclosure to their customers. The disclosure must be a separate document to inform to the customer that:

  • The new home must be installed to state or federal installation requirements (whichever applies)
  • Additional state or local requirements may apply
  • That the retailer can provide additional information on these requirements
  • Compliance with these requirements may involve added costs
  • If the home is relocated, it should be professionally inspected after set-up 

I think retailers should consider using this requirement as a marketing opportunity. I created this brochure (in the picture) that provides the necessary information and can be used to promote your business. This Consumer Brochure is intended to be used in states where HUD has control of installation. A few edits can make it state specific. Feel free to download and edit this with your company information, logo, change the images, etc. If you prefer a more official looking disclosure, you can use the sample form that SEBA has available on their website. Click Here. Either way, make sure you are providing a disclosure to your customers.  24 CRF 3286.7(b)

Dispute Resolution Disclosure:   At the time of signing a contract, the retailer must provide the purchaser with a notice of the Dispute Resolution Program. This notice may be in a separate document from the sales contract, or may be incorporated clearly in a separate section at the top of the sales contract. The notice must include the following language:

“The U.S. Department of Housing and Urban Development (HUD) Manufactured Home Dispute Resolution Program is available to resolve disputes among manufacturers, retailers, or installers concerning defects in manufactured homes. Many states also have a consumer assistance or dispute resolution program. For additional information about these programs, see sections titled “Dispute Resolution Process” and “Additional Information—HUD Manufactured Home Dispute Resolution Program” in the Consumer Manual required to be provided to the purchaser. These programs are not warranty programs and do not replace the manufacturer’s, or any other person’s, warranty program.”

If the state you are selling the home into operates their own dispute resolution program, check their requirement for consumer disclosure. If you are not sure, you get more information at http://www.huddrp.net

General Retailer Responsibilities:   I hope that all retailers of new manufactured homes print a copy and read Retailer Responsibilities, found at Sub-Part F, of the Manufactured Home Procedural & Enforcement Regulations. If you don’t have a copy, click Subpart F 3282 .  The three bullet points below summarize what you should know:

  • Retailer may not sell or lease or offer for sale or lease a new manufactured home that does not fully meet the HUD Code. 24 CFR 3282.252
  • Retailer must submit “Purchaser Card” to manufacturer. 24 CFR 3282.255 
  • Retailer must report ALL possible code violations to the manufacturer. 24 CFR 3282.256

Storing Homes on Retail Lots:  Since we are talking about retailer responsibilities, we shouldn’t forget retailer responsibility for homes that are stored at their sales or storage lots. Check the installation instructions that come with every home. They require the retailers to inspect and repair damaged shipping plastic to make sure the home is weather tight. If the home is on display, support at 12’O.C. along the main beams and sidewall/marriage wall openings 4’ or greater. You even need to install any roof vents.

Typical instructions from every manufacturer.

If the home is being stored  (no people going in and out) for more than 30 days, support the chassis 2’ from each end, and mid-way between tire/axle and hitch. 24 CFR 3286.11

 

 

 

 

 

For more information on these requirements, you can visit HUD’s website HERE  or their contractor SebaPro’s website: www.manufacturedhousinginstallation.com