[Federal Register Volume 68, Number 155 (Tuesday, August 12, 2003)]
[Proposed Rules]
[Pages 47881-47886]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-20485]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 3282

[Docket No. FR-4867-C-03]


Manufactured Housing Consensus Committee--Rejection of Consumer 
Complaint Handling Proposal; Correction

AGENCY: Office of the General Counsel, HUD.

ACTION: Denial of proposed recommendation for revisions for 
regulations; correction.

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SUMMARY: This document corrects an error in a denial of proposed 
recommendation for revisions for regulations, concerning how 
manufacturers are required to handle reports of problems with 
manufactured homes, that was published in incomplete form on July 25, 
2003.

FOR FURTHER INFORMATION CONTACT: Nicholas Hluchyj, Regulations 
Division, Office of General Counsel, Room 10276, Department of Housing 
and Urban Development, 451 Seventh Street, SW., Washington, DC 20410-
0500, (202) 708-3055 (this is not a toll-free number). Persons with 
hearing or speech impairments access this number through TTY by calling 
the toll-free Federal Information Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION: On July 25, 2003 (68 FR 35850), HUD 
published a denial of a proposed recommendation by the Manufactured 
Housing Consensus Committee to revise regulations concerning how 
manufacturers are required to handle reports of problems with 
manufactured homes. That document was inadvertently published in 
incomplete form, and to correct that error, the text is being 
republished in its entirety for the convenience of the public as 
Attachment 1.

    Dated: August 5, 2003.
Camille E. Acevedo,
Associate General Counsel for Legislation and Regulations.

Attachment 1--Department of Housing and Urban Development

24 CFR Part 3282

[Docket No. FR-4867-N-02]

Manufactured Housing Consensus Committee--Rejection of Consumer 
Complaint Handling Proposal

AGENCY: Office of the Assistant Secretary for Housing-Federal Housing 
Commissioner, HUD.
ACTION: Denial of proposed recommendation for revisions for 
regulations.
SUMMARY: The Secretary has rejected a proposed recommendation by the 
Manufactured Housing Consensus Committee to revise regulations 
concerning how manufacturers are required to handle reports of problems 
with manufactured homes. The Secretary has determined that the proposal 
conflicts in several ways with the requirements of the National 
Manufactured Housing Construction and Safety Standards Act of 1974.
FOR FURTHER INFORMATION CONTACT: William W. Matchneer III, 
Administrator, Manufactured Housing Program, U.S. Department of Housing 
and Urban Development, 451 Seventh Street, SW., Washington, DC 20410-
8000; telephone (202) 708-6401 (this is not a toll-free number). 
Hearing- or speech-impaired individuals may access this number via TTY 
by calling the toll-free Federal Information Relay Service at (800) 
877-8339.
SUPPLEMENTARY INFORMATION: The Manufactured Housing Consensus Committee 
(MHCC) has transmitted to the Secretary a recommendation dated March 
26, 2003 (MHCC proposal), that the Manufactured Home Procedural and 
Enforcement Regulations, 24 CFR part 3282, be amended by revising 
Subpart I, Consumer Complaint Handling and Remedial Actions (24 CFR 
3282.401-416) (Subpart I).

Background

    The MHCC was established by the National Manufactured Housing 
Construction and Safety Standards Act of 1974, 42 U.S.C. 5401-5426 (the 
Act) for the purpose of providing periodic recommendations to the 
Secretary to adopt, revise, and interpret the federal manufactured 
housing construction and safety standards and the procedural and 
enforcement regulations. 42 U.S.C. 5403(a)(3)(A). It may submit to the 
Secretary proposed procedural and enforcement regulations and 
recommendations for the revision of the regulations. 42 U.S.C. 
5403(b)(1). To be promulgated by HUD, the regulations and revisions 
recommended by the MHCC must be consistent with the Act.
    Within 120 days from the date on which the Secretary receives a 
proposed procedural or enforcement regulation from the MHCC, the 
Secretary must approve or reject the proposal. If the Secretary rejects 
the proposal, HUD must provide to the MHCC a written explanation of the 
reasons for rejection and publish in the Federal Register the rejected 
proposal and the reasons for the rejection. 42 U.S.C. 5403(b)(4).

Procedural Explanation

    The Secretary recognizes and appreciates that the members of the 
MHCC are working hard to implement the role of the MHCC in the federal 
manufactured housing program. Although this proposal is inconsistent 
with the authority granted to the MHCC under the Act, HUD is publishing 
this proposal (Appendix A) and the Secretary's reasons for rejecting 
the proposal, as if the proposal were subject to the procedures in 
section 604(b).

Decision of the Secretary

    The Secretary rejects the MHCC's proposal for the revision of 
regulations in Subpart I for the handling of reports of problems in 
manufactured housing for reasons that include the following:
    The MHCC proposal is in direct conflict with parts of the Act. In 
section 615 of the Act (42 U.S.C. 5414), Congress placed responsibility 
for the correction and notification of defects in manufactured homes on 
manufacturers, and set guidelines for manufacturers to meet these 
responsibilities. Section 613 of the Act (42 U.S.C. 5412) imposes 
additional repair and repurchase requirements on manufacturers. Subpart 
I, which the MHCC proposal would amend, contains the regulations by 
which the Department has implemented the intent of Congress with 
respect to notification and correction requirements.
    The MHCC proposal seeks to limit the statutory responsibilities of 
manufacturers while imposing similar duties on parties on whom Congress 
did not place these responsibilities, such as retailers, distributors, 
transporters, and landscapers. HUD does not have authority to shift 
statutory

[[Page 47882]]

responsibilities away from manufacturers. The MHCC has not established 
that HUD has authority to hold these newly identified parties 
responsible for correction and notification of defects in manufactured 
homes.
    The MHCC proposal adds significantly to the administrative 
responsibilities of HUD and the states, by making HUD and the State 
Administrative Agencies (SAA's) the initial arbiters of responsibility 
on all complaints and information about problems in manufactured homes. 
The proposal does not take into account the self-policing 
responsibilities of the manufacturers set out in section 615 of the Act 
(42 U.S.C. 5414). The concern about additional administrative burdens 
also applies to the provisions that make SAA's responsible for assuring 
that all notifications are sent and all corrections are made. In 
addition, the MHCC proposal may define roles for HUD and the SAAs that 
require them to interfere in matters that are traditionally settled 
through private contracts. Further, HUD cannot permit voluntary 
undertakings by private parties to constitute governmental action for 
purposes of judicial review.
    The MHCC proposal would, in effect, create a warranty for products 
found in the home, and would then limit the applicable time of the 
warranty. There is no authority in the Act to create a warranty. In 
fact, during consideration of the most recent amendments to the Act, 
Congrss heard testimony suggesting a statutory warranty, but declined 
to adopt this approach. Instead, the Act was amended in section 623 (42 
U.S.C. 5422) to establish an additional protection for consumers 
through a dispute resolution program that covers problems reported in 
the first year after a manufactured home is installed.
    The MHCC proposal does not adequately implement the provision in 
section 615(h) of the Act (43 U.S.C. 5414(h)), which requires 
manufacturers to submit a notification and correction plan to the 
Secretary for approval before the plan is implemented. Under the MHCC 
proposal, a party would be permitted to correct a home without first 
having a plan of correction approved.
    The MHCC proposal seeks to establish time limits for a 
manufacturer's responsibilities under section 615 (42 U.S.C. 5414) that 
are not consistent with the Act. Section 615 contemplates enforcement 
authority over certain defects about which the consumer would not have 
knowledge unless notified or until his or her safety is compromised. 
While the Act places affirmative notification and correction 
requirements on manufacturers for defects as a protective measure even 
if an affected consumer has not yet complained, the MHCC proposal would 
limit a manufacturer's responsibility to act until after a consumer 
complains. Further, the MHCC proposal would limit the responsibility of 
manufacturers and retailers to those defects discovered within 5 years 
from the date of the first sale. An even shorter period of 2 years 
would be established for defects that could be attributed to other 
parties. Section 615 includes no such limits.
    The MHCC proposal raises further questions relating to section 623 
of the Act (42 U.S.C. 5422). Section 623 requires HUD to implement a 
dispute resolution program by December 2005, which would be used to 
resolve disputes among manufacturers, retailers, and installers about 
responsibility for the correction of defects reported in the first year 
after a manufactured home is installed. The MHCC proposal is not in 
agreement with the section 623 process because the proposal: adds 
potentially responsible parties (e.g., landscapers, contractors, 
product suppliers); creates time limits that are inconsistent with 
section 623; and fails to provide for a forum in which the disputes are 
to be resolved.

Text of MHCC Proposal

    The text of the rejected proposal as submitted by the MHCC is 
published as Appendix A.

Dated: July 17, 2003.

John C. Weicher,

Assistant Secretary for Housing-Federal Housing Commissioner.

Appendix A

Manufactured Housing Consensus Committee Proposal To Amend Manufactured 
Housing Home Procedural and Enforcement Regulations 24 CFR Part 3282

March 26, 2003.


Sec.  3282.7  Definitions.

    (i) Dealer--See Retailer.
    (j) Defect means a failure to comply, or the failure of a component 
used to comply with an applicable Federal Manufactured home safety and 
construction standard that renders the manufactured home or any part 
thereof not fit for the ordinary use for which it was intended, but 
does not result in an unreasonable risk of injury or death to occupants 
of the affected manufactured home. See related definitions of imminent 
safety hazard (definition q), non-compliance (definition x), and 
serious defect (definition ff).
    (dd) Retailer means any person engaged in the sale, leasing, or 
distribution of new manufactured homes primarily to persons whom in 
good faith purchase or lease a manufactured home for purposes other 
than resale.
    (ee) Responsible Party means any of the following: manufactured 
home manufacturers, retailers, distributors, contractors, product 
suppliers, product distributors, installers, transporters, developers, 
landscapers, and/or homeowners.

Subpart--Consumer Complaint Handling and Remedial Actions


Sec.  3282.401  Purpose and scope.

    (a) The purpose of this subpart is to establish a system under 
which the protections of the Act are provided with a minimum of 
formality and delay, but in which the rights of all parties are 
protected.
    (b) This subpart sets out the procedures to be followed by 
responsible parties, State Administrative Agencies, primary inspection 
agencies, and the Secretary to assure proper notification and/or 
correction with respect to manufactured homes as required by the Act. 
Notification and correction may be required to be provided with respect 
to manufactured homes that have been sold or otherwise released by the 
manufacturer to another party when the responsible party, an SAA or the 
Secretary determines that an imminent safety hazard, serious defect, or 
defect may exist in those manufactured homes as set out herein. For 
non-compliances, corrections shall be required to the single home it's 
reported in.
    (c) This subpart sets out the rights of retailers under section 613 
of the Act, 42 U.S.C. 5412, to obtain remedies from manufacturers in 
certain circumstances.


Sec.  3282.402  General principles.

    (a) Nothing in this subpart or in these regulations shall limit the 
rights of the purchaser under any contract or applicable law.
    (b) The liability of manufactured home manufacturers to provide 
remedial actions under this subpart is limited by the principle that 
manufacturers are not responsible for failures that occur in 
manufactured homes or parts thereof as the result of the actions of 
other responsible parties, normal wear and aging, gross and 
unforeseeable consumer abuse, or unforeseeable neglect of maintenance.
    (c) Responsibility for remedial actions under this subpart may also 
be assessed to responsible parties to the extent that

[[Page 47883]]

they have contributed to or caused the failure.
    (d) The extent of a responsible party's responsibility for 
providing notification and/or correction depends upon the seriousness 
of problems for which they may be responsible under this subpart.
    (e) It is the policy of these regulations that all consumer 
complaints or other information indicating the possible existence of an 
imminent safety hazard, serious defect, defect, or non-compliance 
should be referred to the manufacturer and/or retailer and/or other 
responsible party of the potentially affected manufactured home as 
early as possible so that the manufacturer or other responsible party 
can begin to timely respond to the consumer and take any necessary 
remedial actions. If the responsible party receiving the notice 
believes the issue is the responsibility of another responsible party, 
the information may be forwarded to that party.


Sec.  3282.403  Limitations

    This shall limit the requirements under this subpart for 
notification or correction to the time frames listed below;
    (a) By a manufactured home manufacturer or retailer, to a period of 
five (5) years from the date of first sale and completion of set-up of 
the manufactured home to the first purchaser. Any home over five (5) 
years in age from the date of sale and delivery to the first purchaser 
is exempt from these regulations or requirements for notification or 
correction by a manufactured home manufacturer or retailer;
    (b) By an installer, contractor, product supplier, product 
distributor, transporter, developer, or landscaper for work completed 
and/or product supplied, to a period of two (2) years from the date 
such work is completed or such product is supplied. Any home over two 
(2) years after the date of completion of such work is exempt from 
these regulations by an installer, contractor, product supplier, 
product distributor, transporter, developer, or landscaper.
    (c) The homeowner has a continuing obligation for providing 
adequate upkeep and maintenance of their manufactured home.
    (d) Manufacturers and/or other responsible parties are not liable 
for the notification and correction of work done by others.


Sec.  3282.404  Consumer complaint and information referral.

    When a consumer complaint or other information indicating the 
likely existence of a non-compliance, defect, serious defect, or 
imminent safety hazard is received by a State Administrative Agency or 
the Secretary, the SAA or the Secretary shall forward the complaint or 
other information to the responsible party. The responsibility to 
assure proper investigation and assignment of responsible party belongs 
to the SAA in the state in which the home is located. The SAA or the 
Secretary may, when it appears from the complaint or other information 
that more than one manufactured home may be involved, simultaneously 
send a copy of the complaint or other information to the SAA of the 
state where the manufactured home was manufactured or to the Secretary 
if there is no such SAA. When it appears that an imminent safety hazard 
or serious defect may be involved, the SAA shall send a copy to the 
Secretary. The SAA in the state of production of the manufactured home 
shall assist the SAA in the state in possession of the manufactured 
home as needed. The SAA in the state of production shall be responsible 
to assure the manufacturer's records reflect the proper investigation, 
record keeping, corrective action, and responses of manufacturer 
actions.


Sec.  3282.405  Investigation, Determination, Repair and Notification 
by Responsible Parties.

    (a) The manufacturer shall review its records to determine whether 
or not a defect, serious defect, or imminent safety hazard is indicated 
as set out in this subpart with respect to all manufactured homes 
produced by the manufacturer within five (5) years of the date of sale 
to the first purchaser, in which there likely exists an imminent safety 
hazard, serious defect, or defect.
    (b) Whenever a responsible party receives from any source 
information that indicates the likely existence of a defect, serious 
defect, or imminent safety hazard in a manufactured home for which they 
are responsible for repair, the responsible party shall, as soon as 
possible, but not later than 20 days after receipt of the information, 
carry out any necessary investigations or inspections to determine and 
shall determine whether they are responsible for correction and/or 
notification. They shall report the results of the initial 
investigation to the SAA as required.
    (c) Determinations and investigations must be completed within 20 
days of the date of notification. These determinations may be initial 
determinations with more thorough investigation to follow. The original 
assessment and determination is required within the 20-day period and 
may be followed up as more information is gathered during the process 
of investigation. The responsible party shall maintain complete records 
of all such information and determinations in a form that will allow 
the Secretary or an SAA to determine the severity of the defect, 
serious defect, or imminent safety hazard.
    (d) The responsible party for the violation shall be required to 
determine the severity of the problem reported. The severity shall be 
determined as identified in the definitions as imminent safety hazard, 
serious defect, defect, or non-compliance. Such records shall be kept 
for a minimum of five (5) years from the date of completion of the 
investigation.
    (e) If the determination is a serious defect or an imminent safety 
hazard, the responsible party that caused the serious defect or 
imminent safety hazard shall be required to determine and identify how 
many homes have the same serious defect or imminent safety hazard. All 
homes with the same serious defect or imminent safety hazard must be 
corrected by the responsible party or their agent in accordance with 
the DAPIA design, regulation, or prevailing code, subject to the 
limitations in Sec.  3282.403.
    (f) If the determination is a defect that affects the performance 
of the home, the party responsible for the defect shall be required to 
make a good faith determination as to the likely cause of the defect 
and a good faith determination as to whether a class is identifiable 
because the cause of the defect, actually known to the responsible 
party, is such that the same defect would probably have been 
systematically introduced by the responsible party into more than one 
home during the construction process at the manufacturer's plant, or 
the same defect would probably have been systematically introduced into 
more than one home by a non-manufacturer responsible party after the 
home was sold or otherwise released by the manufacturer. If the 
responsible party determines that a class exists, the responsible party 
shall provide notification of the defect to all affected homeowners as 
set out in this subpart. Such notice shall include a description of the 
defect and the possible solution or repair. If the SAA chooses to have 
the item repaired, the responsible party shall be required to make the 
repair in accordance with the DAPIA design, or the federal standards in 
effect at the date of manufacture of such home, or prevailing code for 
items not governed by the federal standards, whichever is applicable, 
subject to the limitations in

[[Page 47884]]

Sec.  3282.403. Reporting to the appropriate SAA or the Secretary is 
required as requested.
    (g) If the determination is a non-compliance, repair is required, 
by the responsible party, of only the home involved in a complaint, but 
only if such a non-compliance affects the performance of the home.
    (h) For an individual complaint on a single home, upon discovery, 
all non-compliances, defects, serious defects, and imminent safety 
hazards introduced during construction of the home in the 
manufacturer's construction facility that affects the performance of 
the home shall be corrected by the manufacturer, and those created as a 
result of work another responsible party, such as retailer, 
distributor, installer, contractor, product supplier, product 
distributor, transporter, developer, or landscaper completed on the 
home shall be corrected by the party responsible when the performance 
of the home is affected, subject to the limitations in Sec.  3282.403.
    (i) All required work shall be completed within sixty (60) days of 
the required determination. Providing for the 20-day investigation 
period and adding the 60-day repair period, there is an 80-day period 
of time to complete investigation and corrective action. Extensions may 
be granted by the responsible SAA or the Secretary. Reporting to the 
appropriate SAA or the Secretary is required as requested.
    (j) Damages that take the home out of compliance, resulting from 
any defect, serious defect, or imminent safety hazard are required to 
be repaired by the responsible party. Damage to the home as a result of 
the neglect or an intentional act or omission of the consumer is not 
required to be repaired. Such conduct may include, but is not limited 
to a failure of the consumer to report failures to the responsible 
party in a timely manner and failure to take steps to protect their 
home and property while awaiting repair.
    (k) Listed appliances, materials, fixtures, equipment, and similar 
items used in the assembly of the home shall be considered a defect if 
they fail prior to the home manufacturer's warranty, the product 
warranty, or a period of two years, whichever is greater and affects 
the performance of the home. Product warranties that extend beyond a 
period of two years or beyond the manufactured home warranty shall be 
the sole responsibility of the appliance or product supplier.
    (l) Product suppliers who are required to repair or replace 
products shall be held to the same repair requirements, time 
requirements, and reporting requirements as the manufacturers and 
retailers.
    (m) The determinations of severity and of the number of homes 
involved shall be recorded in the home record of each home involved. 
The determinations for severity are required to be identified for each 
item listed in the complaint. The identification of the determination 
may be either individual line entries, full page entries, or a 
combination thereof. The record must also show if the issue involves 
more than one home.
    (n) All home records shall be kept by the manufacturer and retailer 
for five (5) years from the date the home was sold to the first 
purchaser or for a period of five (5) years from the date of completion 
of an investigation and/or repair campaign.


Sec.  3282.406  SAA Authority and Responsibilities.

    (a) As set out at Sec.  3282.302(b)(5), each SAA is the authority 
to and is responsible for, overseeing the handling of consumer 
complaints within their state. As part of that authority and 
responsibility, including assignment of responsible party after proper 
investigation, the SAA is required to monitor manufacturer compliance 
with this subpart, and particularly with Sec.  3282.405. This 
monitoring will be done primarily by periodically checking the records 
that manufacturers are required to keep under Sec.  3282.405.
    (b) The SAA shall utilize the authority granted by Federal and 
State laws and regulations to assure the requirements of this consumer 
assistance subpart are accomplished.


Sec.  3282.407  Required responsible party correction.

    A responsible party shall correct, at its expense, any imminent 
safety hazard, serious defect or defect that can be related to an error 
in design, construction, assembly, modification, addition, or 
alteration of, or to, the manufactured home which would include errors 
in design, workmanship or assembly of any component or system 
incorporated in the manufactured home that is discovered, subject to 
and within the limitations in Sec.  3282.403.


Sec.  3282.408  Reimbursement for prior correction by owner.

    A responsible party that is required to correct, shall provide 
reimbursement for reasonable cost of correction to any owner of an 
affected manufactured home who chose to make the correction before the 
responsible party did so, providing the responsible party was notified 
prior to the repair being performed.


Sec.  3282.409  Plan for notification and correction.

    (a) This section sets out the requirements that shall be met by 
responsible parties in preparing plans they are required to submit 
under Sec.  3282.405. The underlying requirement is that the plan shows 
how the responsible party will fulfill its responsibilities with 
respect to notification and correction that arise under this subpart.
    (b) The plan shall identify, by serial number and other appropriate 
identifying criteria, all manufactured homes with respect to which 
correction and/or notification is required to be provided. Homes 
identified in the plan shall be those identified in accordance with the 
criteria set forth in Sections 405 (e) and 405 (f) of this subpart. 
Methods that may be used in determining the extent of the class, once 
the existence of a class on manufactured homes has been determined, 
includes for all responsible parties, but are not limited to:
    (1) Inspection of the design of the manufactured home, alteration, 
or addition in question to determine whether the failure resulted from 
the design itself;
    (2) Identification of the cause as relating to a particular 
employee, or process that was employed for a known period of time in 
producing or altering or adding to or affecting the manufactured home;
    (3) Inspection of records relating to components supplied by other 
parties and known to contain or suspected of containing imminent safety 
hazards, serious defects or defects. The class of manufactured homes 
identified by these methods may include only manufactured homes 
actually affected. If it is not possible to identify the precise 
manufactured homes, the class shall include manufactured homes 
suspected of containing the failure because the evidence shows that 
they may have been affected. For manufactured home manufacturers the 
methods may also include:
    (1) Inspection of manufactured homes produced before and after the 
manufactured homes known to be affected;
    (2) Inspection of manufacturer quality control records to determine 
whether quality control procedures were followed;
    (3) Inspection of IPIA records to determine whether the imminent 
safety hazard or failure to conform was either detected or specifically 
found not to exist in some manufactured homes;
    (4) The plan shall include a statement by the IPIA operating in 
each plant in

[[Page 47885]]

which manufactured homes in question were produced if requested by the 
SAA. In this statement, the IPIA shall concur in the methods used by 
the manufacturer to determine the class of potentially affected 
manufactured homes or state why it believes the methods to have been 
inappropriate, inadequate, or incorrect.
    (c) The plan shall include a deadline for completion of all 
notifications and corrections subject to 3282.405(j).
    (d) If the responsible party disputes a finding, ruling, or 
determination of the SAA, the responsible party may, within ten days of 
notice of any such finding, ruling, or determination, appeal such 
action to the Secretary.
    (e) The responsible party may propose a settlement offer that is 
acceptable to the SAA or Secretary for any situation involving non-
compliances, defects, serious defects, or imminent safety hazards. 
Acceptance of a settlement offer by the SAA or the Secretary shall be 
binding and may supersede portions of this subpart specifically 
identified in the agreement.
    (f) Compliance with the steps and the methods outlined in this 
section shall constitute ``good faith'' efforts on the part of the 
responsible party or parties, and shall be prima facie evidence of 
compliance with this subpart.


Sec.  3282.410  Completion of remedial actions and report.

    (a) Where the responsible party is required to provide notification 
under this subpart, the responsible party shall maintain in its files 
for five (5) years from the date notification is completed, a copy of 
the notice sent and a complete list of the people and their addresses. 
The files referred to in this section shall be organized such that each 
notification and/or correction can be readily identified and reviewed 
by an SAA or the Secretary.
    (b) Where a responsible party is required to provide correction 
under Sec.  3282.407 or where the responsible party otherwise corrects 
under Sec.  3282.405, the responsible party shall maintain in its 
files, for five (5) years from the date the correction work is 
completed, one of the following, as appropriate, for each manufactured 
home involved.
    (1) Where the correction is made, a certification that the repair 
was made to satisfy completely the standards in effect at the time the 
manufactured home was manufactured and that the failure has been 
eliminated, or
    (2) Where the owner refuses to allow repair to the home, a 
certification by the responsible party that the owner has been informed 
of the violation and that the owner has refused repair must be placed 
in the home file and made available upon request.
    (c) The responsible party shall, within 30 days after the deadline 
for completing any notifications and, where required, corrections, 
under an approved plan or under an order of an SAA or the Secretary, or 
any accepted settlement, provide a complete report of the action taken 
to the SAA or the Secretary, whoever approved the plan.


Sec.  3282.411  Replacement or repurchase of manufactured home from 
purchaser.

    (a) Whenever an imminent safety hazard or serious defect, which 
must be corrected by the responsible party at their expense under Sec.  
3282.407, cannot be repaired within 60 days in accordance with section 
615(i) of the Act, the Secretary may require:
    (1) That the manufactured home be replaced by the responsible party 
with a manufactured home substantially equal in size, equipment, and 
quality, and either new or in the same condition the defective 
manufactured home would have been in at the time of discovery of the 
imminent safety hazard or serious defect had the imminent safety hazard 
or serious defect not existed; or
    (2) That the responsible party take possession of the manufactured 
home and refund the purchase price in full, less a reasonable allowance 
for depreciation based on actual use if the home has been in the 
possession of the owner for more than one year. Such depreciation shall 
be based upon an appraisal system approved by the Secretary, and shall 
not take into account damage or deterioration resulting from the 
imminent safety hazard or serious defect.
    (b) In determining whether to order replacement or refund by the 
responsible party, the Secretary shall consider:
    (1) The threat of injury or death to manufactured home occupants;
    (2) Any costs and inconvenience to manufactured home owners, which 
will result from the lack of adequate repair within the specified 
period;
    (3) The expense to the responsible party;
    (4) Any obligations imposed on the responsible party under contract 
or other applicable law of which the Secretary has knowledge; and
    (5) Any other relevant factors which may be brought to the 
attention of the Secretary.
    (c) In those situations where, under contract or other applicable 
law, the owner has the right of election between replacement and 
refund, the manufacturer shall inform the owner of such right of 
election and shall inform the Secretary of the election, if any, by the 
owner.
    (d) This section applies where an attempted correction of an 
imminent safety hazard or serious defect relieves the safety problem 
but does not bring the home in conformity to the standards.
    (e) Where replacement or refund by the responsible party is ordered 
under this section, it shall be carried out within 30 days of the 
Secretary's order to replace the manufactured home or refund the 
purchase price unless the Secretary, for good cause shown, grants an 
extension of time for implementation of such order.


Sec.  3282.412  Manufactured homes in the hands of retailers and 
distributors.

    (a) The responsible party shall correct any failures to conform and 
imminent safety hazards that exist in manufactured homes which have 
been sold or otherwise released to a distributor or retailer but which 
have not yet been sold to a purchaser. This responsibility does not 
extend to failures to conform or imminent safety hazards that result 
from transit damage or alteration by others to the manufactured home 
after it leaves the control of the manufacturer. This section sets out 
the procedures to be followed by retailers and distributors for 
handling manufactured homes in such cases. Regardless of whether the 
responsible party is responsible for repairing a manufactured home, no 
retailer or distributor may sell a manufactured home if it contains a 
failure to conform, which affects the performance of the home.
    (b) Whenever a retailer or distributor finds a problem in a 
manufactured home, which a responsible party is responsible for 
correcting under paragraph (a) of this section, the retailer or 
distributor shall contact the responsible party, provide full 
information concerning the problem, and request appropriate action by 
the responsible party in accord with paragraph (c) of this section. 
Where the responsible party agrees to correct, the responsible party 
shall maintain a complete record of its actions. Where the responsible 
party authorizes the retailer to make the necessary corrections on a 
reimbursable basis, the retailer or distributor shall maintain a 
complete record of its actions. Agreement by the responsible party to 
correct or to authorize corrections on a reimbursable basis under this 
paragraph constitutes a determination of the Secretary for purposes of 
Section 613(b) of the Act with respect to judicial

[[Page 47886]]

review of the amount which the responsible party agrees to reimburse 
the retailer or distributor for corrections.
    (c) Upon a final determination by the Secretary or a State 
Administrative Agency under Sec.  3282.409, or upon a determination by 
a court of competent jurisdiction that a manufactured home fails to 
conform to the standard after such manufactured home is sold or 
otherwise released by a manufacturer to a distributor or retailer and 
prior to the sale of such manufactured home by such distributor or 
retailer to a purchaser, the responsible party shall have the option to 
either:
    (1) Immediately furnish, at the responsible party's expense, to the 
purchasing distributor or retailer the required conforming part or 
parts or equipment for installation by the distributor or retailer on 
or in such manufactured home, and the responsible party shall reimburse 
such distributor or retailer for the reasonable value of such 
installation plus a reasonable reimbursement of not less than one per 
centum per month of the manufacturer's or distributor's selling price, 
prorated from the date of receipt by certified mail of notice of non-
compliance to the date such manufactured home is brought into 
compliance with the standards, so long as the distributor or retailer 
proceeds with reasonable diligence with the installation after the part 
or component is received; or
    (2) Immediately repurchase, at the responsible party's expense, 
such manufactured home from such distributor or retailer at the price 
paid by such distributor or retailer, plus all transportation charges 
involved and a reasonable reimbursement of not less than one per centum 
per month of such price paid prorated from the date of receipt by 
certified mail of notice of the imminent safety hazard, serious defect, 
defect or non-compliance to the distributor. The value of such 
reasonable reimbursements as specified in this paragraph shall be fixed 
by mutual agreement of the parties or by a court in an action brought 
under Section 613(b) of the Act.
    (d) This section shall not apply to any manufactured home purchased 
by a retailer or distributor, which has been leased by such retailer or 
distributor to a tenant for purposes other than resale. In that 
instance the retailer or distributor has the remedies available to a 
purchaser under this subpart.


Sec.  3282.413  Notices, bulletins and other communications.

    Each responsible party shall, at the time of dispatch, furnish to 
the SAA or the Secretary a true or representative copy of all notices, 
bulletins, and other written communications to the retailers or 
distributors of such responsible party or purchasers or owners of 
manufactured homes of such responsible parties regarding any serious 
defect or imminent safety hazard which may exist in any such 
manufactured homes produced by such manufacturer. Manufacturers shall 
keep complete records of all communications regarding imminent safety 
hazards, serious defects, defects, and noncompliances.


Sec.  3282.414  Supervision of notification and correction actions.

    (a) The SAA shall be responsible for assuring that notifications 
are sent to all owners, purchasers, retailers, or distributors of whom 
the responsible party has knowledge under Sec.  3282.211 or otherwise 
as required by these regulations, and the SAA shall be responsible for 
assuring that the required corrections are carried out by auditing the 
records required by Sec.  3282.410.
    (b) The SAA or Secretary to which the report required by Sec.  
3282.410(c) is sent shall be responsible for assuring through oversight 
that remedial actions described in the report have been carried out as 
described in the report.
    (c) The SAA of the state in which an affected manufactured home is 
located may inspect that manufactured home to determine whether any 
required correction is carried out to the approved plan or, if there is 
no plan, to the standards or other approval obtained by the responsible 
party.

[FR Doc. 03-20485 Filed 8-11-03; 8:45 am]
BILLING CODE 4210-27-P