YOUR HOUSE:  A – Z

Never buy a manufactured home without the services of an attorney. Three quarters of these homes are damaged during transit or installation, and laws protecting the consumer are inadequate.  You must protect yourself before your money is transferred.
     In the 1970s, federal laws were enacted to upgrade the standards of manufactured housing.  Since that time, these homes are built according to HUD code, and this code is enforced by inspectors who visit the plants where the units are assembled.  Problems remain, however, because transportation and installation of the homes is left up to the individual states.
     Installation, and to a lesser extent transportation, is where much damage occurs to these homes.  In a 1999 survey conducted by AARP, 3 out of every 4 new manufactured homes were found to have serious problems!  Many reported defects like shoddy foundations and water leaks, defects that can cause further damage if not repaired.  AARP also found that the majority of buyers were unable to obtain repairs from the manufacturer or dealer/installer and ended up fixing problems at their own expense.
     It is difficult for buyers of a manufactured home to enforce their legal rights.  As Robert Wilden, author of Manufactured Housing and Its Impact on Seniors (2002), says: “Manufactured housing is ... more like purchasing a car rather than purchasing a home.”  The buyer is often caught between manufacturer and dealer/installer, each telling the buyer it is the other’s fault.  And it is costly for buyers to get legal help because provisions for attorney’s fees are not commonly included in manufactured home contracts.
     The national office of HUD furnishes links to housing authorities in all 50 states and directs buyers to these agencies for resolution, but warns them that “the on-site installation of a manufactured home is not regulated by HUD.”
     Although states have regulatory agencies and licensing boards, buyers lack protection because licensing agencies also serve the very trades people who cause the damage to manufactured housing. Business and professional code as it relates to manufactured housing is corrective, not punitive, and contractors’ boards often allow numerous chances to repair construction defects spread over many weeks or months (with no penalty to the dealer/installer).
     Worse, state agencies may try to protect dealers by impeding public access to information about dealers that have been cited for violations of building code.
     Consumers Union believes that the state and federal agencies that collect complaint information about licensed manufactured home manufacturers, dealers, and installers should make information about the comparative performance of its licensees freely and easily available to consumers in the form of complaint ratios.  View this information from the state of Texas.
      In California the HCD/HUD ombudsman (the agency responsible for issuing dealer licenses) is required by law to furnish information about dealers’ violations to the public for a “reasonable fee,” but this agency charges a base fee of $196 for such research (minimum of $45 per dealer) even though all other public record information about dealers is available on the agency’s website! View our sidebar "HCD hides violations."
     Some states hand over the supervision of transportation and installation of manufactured homes to county government. In counties that issue a permit for occupancy following an inspection of the home, buyers expect this final permit to be proof that their home is good quality and satisfactorily installed.  However, the dealer is actually the owner of the home until the enforcing agency (county or state) issues the final permit to occupy, at which time the buyer becomes owner of the property.  The buyer is not adequately represented in this transaction, and funds may even be transferred without the buyer’s knowledge or approval.  And although the enforcing agency may verify the health & safety conditions of the home, the enforcing agency‘s inspection does not check the sales contract nor guarantee that the terms of this contract have been met.
     Here are some of the problems that consumers have reported to the Manufactured Housing Citizens Group after the county permitted occupancy:  heating systems/AC systems not connected, water collecting in substructure, house sinking on one side, flooring uninstalled or missing, or paint and fixtures missing.
     In the Manufactured Housing Citizens Group's “Legislative Proposal” we suggest a mandatory disclosure notice informing buyers of 1) which agency will be inspecting their home, 2) a description of items included in this inspection, and 3) a summary of their legal rights as a purchaser.  In the absence of stronger state or federal laws controlling the transportation and installation of manufactured housing, we feel government should be responsible for making sure consumers are aware of their legal rights in such a purchase so that they may better protect themselves.

WE ADVISE:

We endorse the plan proposed by Consumers Union, the non-profit advocacy branch of Consumer Reports (this group has done more than any group or agency in the United States to help buyers and potential buyers of new manufactured housing).  This plan advocates that all buyers of new homes have their contracts reviewed by an attorney and that this attorney designate that escrow funds (10 to 20% of total purchase price) be held back (not transferred) until a third-party inspection is hired.  This plan would add up to $1,000 to the total cost of the purchase (from $250 to $500 for each professional), but is far less than the cost of even one major repair to your home.
     In “How to Prevent Trouble” (below), Consumers Union cites $650 or 1% of purchase price as a typical fee for an attorney in the city of New York.  Rates for a home inspection vary from $350 for a smaller home up to $500 for a larger home.  You might also want to consider writing into your contract that an additional inspection take place at the plant before your home is shipped (we have recently found cases of no tarpaper under roofing or siding, windows leaking into walls, wrong floor plan, etc).
     Finally, keep a record of all transactions (at the very least, jot down the date, name, and a brief note of the subject of all phone calls).  If phoning does not prove effective, put all requests in writing, and register or certify your mail if you think you may need a legal record.