Issue link: https://read.dmtmag.com/i/205269
MHARR VIEWPOINT MHARR Focus and Persistence on Subpart I Brings Long-Needed Changes BY DANNY GHORBANI Reforming Subpart I of HUD's Procedural and Enforcement Regulations and eliminating or significantly reducing the substantive and procedural irregularities associated with those regulations has been a key MHARR goal since the Association was established nearly 30 years ago. And now, with the publication of a final HUD rule modifying portions of Subpart I, it appears that this persistence has been rewarded in certain important respects. To start, let's be clear -- as MHARR stated in its written comments to HUD, Subpart I is an outmoded relic from an era when manufactured homes were relegated to the status of "trailers" and treated like vehicles, rather than housing. Subpart I is not appropriate for manufactured housing -- or any type of "housing," for that matter -- especially after the Manufactured Housing Improvement Act of 2000, which was designed to complete the transition of manufactured homes to legitimate "housing" at parity with all other types of residential construction. By its very existence, Subpart I unfairly implies that manufactured housing is inferior to other types of homes, helping to fuel (and aggravate) a wide range of discriminatory policies affecting consumer financing, placement, zoning and other matters in ways that penalize both the industry and manufactured homebuyers. Subpart I implements part of the original 1974 manufactured housing law (section 615) that was largely copied from the federal regulatory law for automobiles, the National Traffic and Motor Vehicle Safety Act of 1966 (NTMVSA). With this vehicle-based heritage, Subpart I effectively provides for manufactured home "recalls," in much the same manner that NTMVSA provides for automobile recalls. In NOVEMBER 2013 10 THE JOURNAL the intervening years, though, the world has changed and so have manufactured homes. Today's manufactured homes -- as industry members and homeowners both know – are far superior to the products of yesteryear, as technology, materials and construction techniques have all advanced at a rapid pace. Recognizing this transformation, Congress, in the 2000 reform law, enacted specific modifications to the federal manufactured housing program designed to end discrimination against manufactured housing by, among other things, more appropriately protecting manufactured housing consumers as homebuyers. Thus Congress provided for installation standards and enforcement in all fifty states and nationwide dispute resolution systems, with the authority to enter notification and correction orders against manufactured home producers, retailers and installers -- above and beyond the protection provided by standard or extended warranties offered by manufacturers. Consequently, while the 2000 law did not repeal section 615 (and with it, Subpart I), it did establish new, cost-effective, multi-level and multi-party homeowner safeguards -- appropriate to housing -- that justify a more flexible and less burdensome approach to Subpart I than has been the case since 1976. This led MHARR to immediately submit a Petition for Rulemaking to HUD in 2001 -- after the enactment of the 2000 law -- seeking amendments to make Subpart I less costly, less bureaucratic, less complex, less rigid and less paperwork-intensive. MHARR's Petition ulti- mately became the base document for consideration of this issue by the Manufactured Housing Consensus Committee (MHCC) when it was constituted in 2003 and, after extensive debate, became the core of consensus Subpart I amendments recommended to HUD not once, but twice. And while the HUD proposed rule – and now final rule -- incorporate significant elements of the initial MHARR proposal and MHCC recommendations that should make Subpart I less onerous, burdensome and confusing than in the past, there is still room for further improvement going forward that will continue to be a key focus for MHARR. The most notable Subpart I improvements incorporated within the final HUD rule will affect the processing of consumer referrals or other information received either directly by the manufacturer, or indirectly through a retailer, a State Administrative Agency (SAA), or HUD. Under the old Subpart I, manufacturers were required to investigate every single scrap of information – received from any source – that could possibly indicate the existence of a "problem" in a home. And since anything not barred by the laws of physics is "possible," manufacturers were compelled to expend significant resources to investigate claims that were clearly not valid – to the benefit of absolutely no one. The new rule, by contrast, requires information to be forwarded to the manufacturer by a retailer, SAA, or HUD only if it shows the "likely" ex- 19 \