SCUTT LAW PLLC

Texas has some surprising (and very agreeable) consumer protection codes on the books that you as a consumer should be aware of. Most of these codes are “tie-in statutes,” which means that they can be brought under the Texas Deceptive Trade Practices Act (DTPA). Since the DTPA allows very favorable remedies, this is a definite advantage to the consumer. Scutt Law, PLLC will be presenting and explaining a few of the tie-in statutes at a time in installments, so that you the consumer are aware of the protections afforded to you under these Acts. This installment covers certain sales of a homestead and new and used manufactured housing standards.

Certain Sales of Homestead [Tex. Prop. Code Section 41.006]: This portion of the property code covers certain types of sales of a homestead. What is a homestead, you ask? In Texas, a homestead is a set of exemption laws that prevent the forced sale of a home to meet the demands of creditors. It provides the surviving spouse with shelter in the event of a death, and was added to the Texas Constitution to protect wives and children from gambling husbands back in the days of the “wild, wild west”. However, in most cases, homestead exemptions do not apply to forced sales to satisfy mortgages, mechanics liens, or sales to pay property taxes. A rural homestead may consist of no more than 200 acres for a family, and not more than 100 acres for a single adult. An urban homestead may not amount to more than 10 acres of land, together with any improvements on it. Unlike rural homesteads, the lots in an urban homestead must be contiguous.

The Texas legislature enacted the certain sales of homestead statute to protect homeowners against improper sham loans against a homestead. Texas prohibits a “sale-leaseback” of a homestead. If a homestead is sold at a price that is less than the appraised fair market value of the property, and in connection with the sale the buyer executes a lease of the property to the seller at a lease payment that exceeds fair rental value, all payments in excess of the sales price are considered interest. Under this law, the deed given to the buyer is void and no lien attaches to the homestead as a result of the purported sale.

The law applies to any sale of a homestead. However, it does not apply to the sale of a family homestead to a parent, stepparent, grandparent, child, stepchild, brother, half-brother, sister, half-sister or grandchild of an adult family member.

Manufactured Housing Standards Act [Tex. Civ. Stat. Ann. art. 5221f, sections 8, 14]: This Act is designed to provide the citizens of Texas with safe, affordable and well-constructed housing. It applies to manufactured homes constructed since 1976 under the rules of the United States Department of Housing and Urban Development (HUD) and to mobile homes constructed prior to 1976 that are transportable in one or more sections, and are eight body feet or more in width or 40 feet or more in length when in the traveling mode.

The major provisions of the Act regarding used homes include the requirement that a person may not sell, exchange or lease-purchase a used manufactured home to a consumer unless the appropriate seal or label is affixed to it. In addition, the Act requires that a written warranty be given on each home that the home is habitable. The term “habitable” means that there is no defect, damage or deterioration to the home that creates a dangerous or unsafe situation or condition. It also requires that the plumbing, heating and electrical systems are in working order, that the walls, floors and roof are free from substantial openings not designed and are structurally sound. Finally, it requires that all windows and doors are in place.

The consumer then has 60 days after the date of the sale to notify the seller in writing of any defects that make the home uninhabitable. Failure to give this written notice of the defects terminates the obligations and the liabilities of the seller. However, the warranty must conspicuously disclose this requirement to the buyer.

The new home provisions include the requirement that the manufacturer warrant that each new HUD-manufactured home is constructed or assembled in accordance with all building codes, standards, requirements and regulations prescribed by HUD. The manufacturer must also warrant that the home and all appliances and equipment included in the home are free from defects in materials and workmanship. The warranty must be in writing and must be effective for at least one year.

The new manufactured home retailer must give the buyer a written warranty that the installation will be completed in accordance with rules and regulations of the Texas Department of Housing and Community Affairs. Additionally, the retailer shall warrant that any appliance or equipment installed with the home will be installed in accordance with the manufacturer’s instructions and specifications. The retailer’s warranty must be in writing and must be effective for at least one year.

In the case of a breach of warranty by either the retailer or manufacturer of a new manufactured home, the consumer must notify the offender in writing of the need for warranty repair or service. If the manufacturer or retailer does not provide warranty service as requested, the consumer may request that the Texas Department of Housing and Community Affairs inspect the home. If after the inspection it is determined that the home needs repairs and that the manufacturer or retailer failed to make the repairs, the department may suspend or revoke the offending party’s license.

Texas has some very beneficial consumer protection laws, and it is to your advantage as a consumer to know your rights and to act on them. Therefore, you should contact an attorney if you feel you have a claim under the DTPA or any of the tie-in statutes.

*Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.