DOWNLOAD MATERIAL FOR CE COURSE 10/20/2017

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1 DOWNLOAD MATERIAL FOR CE COURSE 10/20/2017 CONSUMER COMPLAINTS & HOW TO COMPLY WITH RULES NOTE: A complaint may be initiated by a consumer or by the Department. Certain requests by licensees may result in TDHCA opening a complaint. Sec Notice of Need for Warranty Service The consumer now can give a notice of need for warranty service to the installer who gave the installer s warranty. A consumer or other written notice to TDHCA is deemed to be notice to any licensee (who gives a warranty) commencing three business days after receipt of regular mail or electronic mail sent by TDHCA CONSUMER CLAIM FOR WARRANTY SERVICE UNDER THE NEW OR USED HOME WARRANTY a. Corrective Action Required : Now an installer, manufacturer, or retailer shall take appropriate corrective action immediately for safety hazard claim or 30 days for any other claim. (Receipt of a consumer claim is official notification of a request for warranty service and the 30 days to correct begins.) LICENSEE HAS 30 DAYS TO RESOLVE A CONSUMER CLAIM b. Retailer, Installer, or Manufacturer shall repair or correct other warranty items within 30 calendar days after receiving a written claim from a consumer. (The time to respond to a request for warranty service may be extended for good cause (disputed claims) by filing a written request with TDHCA for an inspection and if TDHCA approves the request, the 30-day time to resolve stops until a TDHCA inspection is completed. Once the inspection is completed and TDHCA issues its findings, a reasonable time will be given to licensees to address the findings. In the event the parties cannot agree on a reasonable time, the Director shall issue a revised order assigning a time for compliance. Any such order shall be subject to appeal and a hearing. c. All paperwork for warranty items shall be made available for TDHCA review. IF TDHCA BECOMES INV0LVED IN A DISPUTE BETWEEN A CONSUMER AND LICENSEE TDHCA OPENS A COMPLAINT CLAIM BECOMES COMPLAINT A. IF LICENSE HOLDER DOES NOT SATISFY CONSUMER OR LICENSE HOLDER DOES NOT RESPOND TO CLAIM (CONSUMER REQUEST FOR SERVICE) COVERED BY A WARRANTY, TDHCA WILL SEND THE

2 CONSUMER A COMPLAINT FORM (See next form) & AFTER REVIEWING THE FORM, TDHCA WILL OPEN A VALID COMPLAINT.

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6 TYPES OF COMPLAINTS 1) NEW HOME WARRANTY 2) IMMINENT SAFETY HAZARD 3) 60-DAY WARRANTY (USED HOMES) 4) INDUSTRY REQUESTED INSPECTION 5) ABATEMENT COURT ORDERED INSPECTION 6) INSTALLATION 7) ADVERTISING COMPLAINT IS SUBMITTED ON 8) DEPOSIT 9) DECEPTIVE TRADE OR DECEPTIVE PRACTICES 10) HOMEOWNERS RECOVERY TRUST FUND 11) SAA (STATE ADMINISTRATIVE AGENCY) 12) UNLICENSED INSTALLER, RETAILER, SALESPERSON B. THE VALID COMPLAINT IS REVIEWED, PROCESSED, AND THEN DISTRIBUTED TO THE APPROPRIATE TDHCA FIELD OFFICE WITH CODEABLE ITEMS SPECIFIED PURSUANT TO FEDERAL AND STATE STANDARDS OR WARRANTY REQUIREMENTS. 1 to 10-DAY COMPLAINT RESPONSE FORM C. TDHCA WILL FAX OR SEND ALL LICENSEES A COPY OF THE COMPLAINT FORM FOR LICENSEES RESPONSE ALONG WITH A 1 to 10-DAY COMPLAINT RESPONSE FORM DEPENDING ON NATURE OF COMPLAINT. (NOTE: TDHCA SETS THE RESPONSE TIME IN THE LETTER) C. LICENSE HOLDERS HAVE 1 to 10 CALENDAR DAYS TO FILE THE 1to 10-DAY COMPLAINT RESPONSE FORM TO A TDHCA FIELD OFFICE.

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8 E. AFTER TDHCA HAS REVIEWED A CONSUMER COMPLAINT AND LICENSEES RESPONSES TDHCA PERSONNEL WILL DETERMINE IF A POSSIBLE DEVIATION EXISTS. A CONSUMER COMPLAINT INSPECTOR WILL CONTACT THE CONSUMER TO SCHEDULE AN INSPECTION IF TDHCA DEEMS IT APPROPRIATE. ALL PARTIES ARE NOTIFIED OF THE INSPECTION AND ARE INVITED TO ATTEND THE INSPECTION. Sec Consumer Complaint Home Inspection A consumer may file a complaint against an installer and the department may complete an inspection without cost to the consumer. Also, an installer may request an inspection by TDHCA for a $150 fee. New law gives authority to TDHCA to make an inspection at any time if the department believes an imminent threat to health or safety exists. F. AFTER THE INSPECTION, THE TDHCA INSPECTOR WILL MAIL A REPORT TO ALL CONCERNED PARTIES THAT WILL DETAIL ALL DETERMINATIONS AND ASSIGNED RESPONSIBILITIES UNDER THE RESPECTIVE LICENSE HOLDERS WARRANTIES. TDHCA 10-DAY DEVIATION NOTIFICATION UP TO 30 DAYS TO RESOLVE TDHCA ORDER Sec Report and Order; Amendment; Compliance (10 DAY DEVIATION NOTICE) After a warranty claim inspection by TDHCA is completed an inspector will send within 10 days a written report to all licensees detailing what is required of each licensee to bring each deviation into compliance. Included in the report is an order(s) to a licensee to take corrective action and a date that it is to be accomplished. Both the retailer and installer are responsible for the installation of a new home, but for all installation deviations TDHCA is mandated to send orders to the installer. If the installer does not correct the problems, TDHCA will send another order to the retailer who is required to correct the problem(s) within 10 days and the retailer may seek reimbursement from the installer, including filing a claim on the installer s security filed with TDHCA. Depending on the seriousness of the problems TDHCA may shortened the 10 days. G. THE INSPECTOR S REPORT THAT IS SENT TO ALL CONCERNED PARTIES WILL BE MAILED WITHIN TEN (10) DAYS AFTER THE INSPECTION. THIS IS TDHCA S ORDER TO RESOLVE THE COMPLAINT WITHIN THE TIME PERIOD STATED IN THE ORDER. Inspectors have authority to establish time periods to correct an item using the 30-day rule. FIVE (5) DAYS TO SEND COMPLETION ORDERS TO TDHCA

9 H. INITIALLY, THE LICENSEE HAD 30 DAYS TO REPAIR OR CORRECT ANY DEVIATION OR BRING INTO COMPLIANCE + 5 MORE DAYS TO SEND THE SIGNED OR COMPLETED SERVICE WORK ORDERS TO TDHCA. ITEMS TO BE SENT TO TDHCA MAY BE A WORK ORDER SIGNED BY THE CONSUMER THAT THE WORK WAS COMPLETED SATISFACTORILY OR AN AGREEMENT BETWEEN CONSUMER AND LICENSEE THAT THE ITEM WAS RESOLVED TO CONSUMER S SATISFACTION. IF LICENSEE ATTEMPTS TO SATISFY THE CONSUMER AND IS UNABLE TO DO SO, LICENSEE SHALL REPORT THIS TO TDHCA ALONG WITH THE UNSIGNED WORK ORDER I. WHEN TDHCA RECEIVES THE SIGNED WORK ORDERS, THE CONSUMER IS MAILED A NOTICE THAT THE COMPLAINT WILL BE CLOSED IF A WRITTEN RESPONSE IS NOT RECEIVED FROM THE CONSUMER WITHIN 30 DAYS. II. LICENSEE MAY REQUEST AN INSPECTION or RE-INSPECTION J. LICENSEE MAY REQUEST A TDHCA INSPECTION OR RE-INSPECTION BY MAILING TDHCA A REQUEST ON THE LICENSEE S LETTERHEAD AND PAYING THE $150 FEE. (PURPOSE OF RE- INSPECTION IS TO DEMONSTRATE TO TDHCA THAT A SINCERE EFFORT WAS MADE TO SATISFY THE CONSUMER) TDHCA WILL COMPLETE A RE-INSPECTION OR CLOSE THE FILE AFTER THE CONSUMER HAS BEEN NOTIFIED. Sec Inspections Not Limited; Corrections- TDHCA may inspect any manufactured home at any time. If at any time TDHCA identifies a non-conforming problem with an installation TDHCA will order the responsible licensee to correct the non-conforming items and if licensee is no longer in business, TDHCA will reassign to another licensed installer who will be reimbursed from the trust fund for the cost of the correction. CONSUMER PROTECTION-ADMINISTRATIVE ACTIONS DEVIATION VS VIOLATION K. IF COMPLAINT IS NOT RESOLVED THEN EACH DEVIATION THAT HAS NOT BEEN BROUGHT INTO COMPLIANCE WITHIN THE ALLOTTED TIME BECOMES A VIOLATION. L. THE COMPLAINT, WITH ALL THE VIOLATIONS, IS THEN SENT TO TDHCA S CONSUMER PROTECTION SECTION FOR ADMINISTRATIVE ACTION. Sec Failure to Provide Warranty Service DIRECTOR S DISCIPLINARY MEETING

10 Licensees must provide warranty service as ordered by TDHCA and if a licensee fails to perform as required the licensee must show good cause in writing as to why correction was not completed when ordered to do so. An informal meeting will be conducted by TDHCA personnel or director, and licensees and the licensees must show cause why their licenses should not be suspended or revoked for not bringing problems into compliance. Following the informal meeting the director shall: 1. resolve the matter by agreed orders, or 2. dismiss the matter if no violation is found to have occurred, or 3. institute an administrative action, which may include license suspension or revocation, assessing administrative penalties, or a combination of such actions. If a consumer prevents the licensee from completing the work ordered by TDHCA a written statement describing the good cause problem shall be sent to TDHCA. TDHCA will investigate the validity of the licensee s written information, and if such information is found to be credible, TDHCA will issue a new order by certified mail specifying the date and time of the proposed corrective action to all applicable licensees and to the consumer involved. If consumer refuses to comply with the new order all involved licensees are discharged from their warranty obligations stated in the new order. Sec Failure to Show Good Cause; Hearing Results If a licensee fails to show good cause at the informal hearing it is sufficient basis for license suspension or revocation. If Director determines that an order was incorrect regarding a warranty obligation, the Director shall issue a final order stating the correct warranty obligation and the right of the licensee to indemnification from one of the other parties, including the right to file on a security filed with TDHCA as if that licensee to be indemnified were a consumer. N.O.V. NOTICE OF VIOLATION CONSUMER PROTECTION ADMINISTRATIVE ACTIONS 30-DAY ACTION LETTER M.TDHCA WILL ISSUE AN ADMINISTRATIVE ACTION LETTER. Prior to 30 days after receiving a NOV a violator must: resolve violation, and comply with TDHCA action order or penalties in letter, or request a hearing.

11 A violation that constitutes an imminent threat to health or safety may be a basis for pursuit of maximum statutory penalties and/or suspension or revocation of licenses as provided in the Standards Act regardless of whether it is a first or reoccurring occurrence. Anytime the record indicates that there is a high likelihood that a licensee s violation is a direct result of a systemic problem, it is appropriate to request the licensee to develop a plan to prevent future occurrences. Undertaking to develop such a system is an appropriate mitigating factor to be taken into account in determining what penalty to pursue. To determine the amount of an administrative penalty assessed, the Director shall consider: 1. the seriousness of the violation; 2. the history of previous violations; 3. the amount necessary to deter future violations; 4. efforts made to correct the violation; and 5. any other matters that justice may require. POSSIBLE TDHCA ACTIONS FOR NOT PROVIDING INFORMATION: FIRST TIME VIOLATOR LETTER TO $1000 FINE PLUS TDHCA HAS AUTHORITY TO ASSESS PENALTIES OF $2000 FOR A SECOND VIOLATION ($4000 for 3rd & subsequent) PER EACH VIOLATION BY A LICENSE HOLDER + TDHCA MAY IMPOSE A FINE OF $10,000 PER VIOLATION BY A PERSON WHO FAILS TO COMPLY WITH LAW OR FAILS TO COMPLY WITH A TDHCA RULE OR ORDER + A person may have to pay attorney fees, administrative costs, witness fees, investigative costs, and deposition expenses if that person becomes a violator of law, or TDHCA rules, or TDHCA order. + Director may issue a CEASE & DESIST order if a person gives an indication that he has violated the law or rules or is about to violate same. TDHCA MAY CARRY OUT STING OPERATIONS TO DETERMINE COMPLIANCE BY SUSPECTED VIOLATORS +

12 A PERSON or a DIRECTOR, OFFICER, or AGENT of a corporation commits a Class A misdemeanor offense if that individual knowingly and willfully violates the STANDARDS ACT or a rule adopted or order issued by TDHCA in a manner that threatens consumer health or safety. The misdemeanor is punishable by a fine not to exceed $4000; confinement in county jail up to 1 year; or both fine and confinement. + INJUNCTIVE RELIEF BY ATTORNEY GENERAL AND CIVIL PENALTIES OF $1000 PER VIOLATION UP TO $250,000 IN THE AGGREGATE. ANY PENALTIES ARE IN ADDITION TO BRINGING VIOLATION IN COMPLIANCE WITH STANDARDS ACT AND TDHCA RULES CONSUMER PROTECTION ADMINISTRATIVE HEARINGS ALL HEARINGS WHETHER TDHCA OR VIOLATOR REQUESTED ARE HELD IN COMPLIANCE WITH GOVERNMENT CODE, CHAPTER NOTICE OF ADMINISTRATIVE HEARING IS: 1. SENT TO VIOLATOR & OTHER PARTIES BY REGISTERED MAIL & 2. STATE OFFICE OF ADMINISTRATIVE HEARINGS (SOAH) WILL CONDUCT THE HEARING 3. AN ADMINISTRATIVE LAW JUDGE WILL HEAR EVIDENCE FROM ALL PARTIES & DECIDE WHAT COURT ACTIONS WILL BE TAKEN 4. RESPONDENTS (VIOLATORS) ARE NOTIFIED OF SOAH S RECOMMENDATION. 5. THE TDHCA/MHD BOARD ISSUES AN ORDER. IF VIOLATORS DO NOT COMPLY WITH FINAL ORDERS TDHCA MAY USE FUNDS FROM THE MANUFACTURED HOMEOWNERS RECOVERY TRUST FUND TO COMPENSATE THE CONSUMER AND THEN FILE A CLAIM AGAINST ANY BOND.