TDHCA Sunset Recommendation #7: 3 in 1 on manufactured housing

As previously discussed here at Texas Housers, TDHCA is currently undergoing Sunset Review.  We are presenting recommendations for ways to improve TDHCA that have been endorsed by a broad range of stakeholders in TDHCA’s activities.

Issue:

The Manufactured Housing Division could better serve its mission to “improve the general welfare and safety of purchasers of manufactured housing in this state.”

Background:

The Manufactured Housing Division of the Texas Department of Housing and Community Affairs in Texas administers the Texas Manufactured Housing Standards Act and acts as HUD’s state supervisory agent to administer the National Manufactured Housing Construction and Safety Standards Act of 1974.

Recommendations:

The Department should consider lease-purchase transactions to be sales at the time of the contract execution.

Sellers may structure a sale as a “lease purchase” to avoid the proof of ownership, departmental licensing, and disclosure requirements of a straight sale.  Currently, the department does not provide oversight of lease-purchase transactions at the time the contract is initiated.  Consumers may pay years on a home before they discover the seller does not have a Statement of Location (which functions similar to a title in conventional housing) clear of liens and eligible for transfer.  At that point, sellers may use eviction under tenant statutes to avoid their obligations under the lease-purchase contract. The department should apply all licensing and disclosure requirements under the Manufactured Housing Standards Act to lease-purchase contracts at the time of execution, including licensing requirements, the use of standardized forms and sales disclosures, and proof of a clear statement of location held by the seller.  The department should be given authority to review evictions on homes under lease-purchase contract to ensure landlord-tenant law is not being misused to void a valid sales contract.

Direct and fund the Manufactured Housing Division to inspect 100% of home installations in manufactured home parks and high wind areas.

All purchasers of a newly installed home pay a “Statement of Location” and “Notice of Installation” fee to the department, but only 25% of installations receive an inspection by the department.[1] An improperly installed home can fail in a high-wind event such as a hurricane and endanger other homes, especially in high-density manufactured home parks.  The National Hurricane Center reports: “debris from the damaged or destroyed homes will become missiles that have the potential to substantially damage other units…[2]” Given this, the department should, at the minimum, inspect 100% of homes installed in manufactured home parks or in coastal areas listed as Wind Zone II or higher by HUD.  These inspections should be in addition to its 25% base inspection rate in the rest of the state.

The Department should better use its licensee information to inform consumers about the marketplace.

The department should notify consumers in the promulgated consumer disclosure notice about the public availability of information regarding complaint and enforcement activity against licensees.  The department should design its web interface for easier consumer reference by integrating complaint, violation, and enforcement information with the licensing database.  This information should be kept current.  As of February 2010, the department has not updated their “enforcement ratio” report since 2004 and information on enforcement actions is only available via a search separate from licensing information.  A consumer searching to confirm the license status of a retailer should also be provided with any relevant enforcement, complaint, or code violation information held by the department.

These Recommendations are Endorsed By:

Advocacy, Inc. Association of Rural Communities in Texas Center on Disability and Development – Texas A&M University Easter Seals Central Texas Habitat Texas Motivation Education & Training, Inc.

Texas Association of Community Development Corporations Texas Association of Local Housing Finance Agencies Texas Council for Developmental Disabilities Texas Center for Disability Studies-UT Texas Low Income Housing Information Service

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[1] A review of the installation records suggests that if an inspection is attempted but the department is unable to access the home, the unit is labeled as ‘inspected.’  If this is true, the actual rate of completed inspections may be less than the reported rate.

[2] http://www.ihrc.fiu.edu/lwer/docs/DELIVERABLE7structural.pdf