BP BHEAD INT H

AN ACT Relating to consumer remedies for purchasers of manufactured homes; amending RCW 46.70.070 and 46.70.075; and adding a new chapter to Title 59 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds that the purchase of a manufactured home is a sizable investment for most families. The legislature also finds that consumer remedies for purchases of manufactured homes lack clarity and are often inadequate. Therefore, the legislature declares that it is the purpose of this act to strengthen consumer warranties, clarify escrow provisions, and establish a recovery fund with respect to manufactured housing sales.

NEW SECTION. Sec. 2. The manufactured housing transaction recovery fund is created in the custody of the state treasurer. All assessment fees collected from manufactured home manufacturers, dealers, and installers in accordance with section 3 of this act shall be deposited into the fund. All interest earned by deposits in the fund shall accrue to the fund. The fund is not subject to allotment reductions under chapter 43.88 RCW, and no appropriation is required for expenditures. The department of community development may be reimbursed from the fund for its costs incurred for investigating and enforcing claims under this chapter. Only the director of the department of community development, or the director's designee, may authorize expenditures from the fund.

NEW SECTION. Sec. 3. Each manufactured home manufacturer, dealer, and installer doing business in the state of Washington shall pay an initial assessment fee to the manufactured housing transaction recovery fund established in section 2 of this act. The fee shall be assessed as follows:

(1) A manufacturer shall pay the sum of three thousand dollars for selling manufactured homes in the state;

(2) A dealer shall pay the sum of five hundred dollars for each retail location in the state;

(3) An installer shall pay five hundred dollars for each business location in the state.

The fee shall be collected by the licensing or certifying agency, or its agents, at the time the manufacturer, dealer, or installer submits an application for certification or licensure or renewal. A manufacturer or dealer who also acts as an installer of manufactured homes is not required to pay the fee required for an installer, but must pay the fee assessed for a manufacturer or dealer. This fee shall not be collected more than once except as provided in section 4 of this act. The department of licensing, the department of labor and industries, and the department of community development shall consult with each other before adopting rules necessary to implement this section. The fee shall be forwarded to the state treasurer for deposit into the manufactured housing transaction recovery fund.

NEW SECTION. Sec. 4. Whenever the balance of the manufactured housing transaction recovery fund falls below two hundred fifty thousand dollars, the department of community development may reimpose the fee established under section 3 of this act.

NEW SECTION. Sec. 5. A buyer of a manufactured home who wishes to recover damages from the manufactured housing transaction recovery fund must file an application with the department of community development. The department shall review the application and determine the buyer's eligibility for recovery in accordance with section 6 of this act. Any decision of the department concerning eligibility may be appealed as an adjudicative proceeding under the administrative procedure act, chapter 34.05 RCW.

NEW SECTION. Sec. 6. (1) A buyer of a manufactured home is eligible to recover from the manufactured housing transaction recovery fund, if the following conditions are met:

(a) The buyer obtains a final judgment in any court of competent jurisdiction against a manufactured home manufacturer, dealer, or installer;

(b) The judgment is on the grounds of failure to honor a warranty or guarantee, or for fraud, or for willful misrepresentation of the kind or quality of the product sold or the work provided, or for conversion, arising directly out of any transaction that occurs after July 1, 1993;

(c) The buyer has presented evidence that the judgment has been executed against all the assets of the judgment debtor or presented satisfactory evidence that the judgment debtor is judgment proof;

(d) The claim against the fund is filed within one year from the date of the judgment;

(e) The buyer has agreed to subrogate to the department all rights against the judgment debtor to the extent of the payment; and

(f) The fund balance is sufficient to pay the award.

(2) The amount of damages awarded from the fund is limited to the actual cost of repairs to the manufactured home. No punitive damages, court costs, or attorneys' fees may be awarded from the fund.

(3) If the aggregate of claims against the fund exceeds the balance in the fund, then the money in the fund shall be prorated by the department of community development among the claimants and paid in proportion to the amounts of their awards remaining unpaid.

NEW SECTION. Sec. 7. (1) The judgment debtor is liable for repayment in full for the amount arising from claims against the debtor paid from the fund, plus interest.

(2) A discharge in bankruptcy does not relieve a judgment debtor from the responsibility from repaying moneys paid from the fund to satisfy claims against the judgment debtor.

NEW SECTION. Sec. 8. If a claim is paid from the fund, or the manufacturer, dealer, or installer fails to pay the assessment required under section 3 of this act, the department that licensed or certified the judgment debtor shall suspend or deny the judgment debtor's license, registration, or certification until the judgment debtor has paid the assessment or repaid the fund the amounts paid on its behalf, plus interest. The department of licensing shall suspend a judgment debtor's license in accordance with chapter 46.70 RCW. The department of labor and industries shall suspend a judgment debtor's registration in accordance with chapter 18.27 RCW. The department of community development, the department of licensing, and the department of labor and industries shall consult with each other before adopting rules necessary to implement this section.

NEW SECTION. Sec. 9. For purposes of this chapter, "judgment debtor" means a manufactured housing manufacturer, dealer, or installer who is required to pay damages to a buyer of a manufactured home under a final judgment rendered by a court of competent jurisdiction.

NEW SECTION. Sec. 10. Sections 1 through 9 of this act shall

constitute a new chapter in Title 59 RCW.

Sec. 11. RCW 46.70.070 and 1989 c 337 s 15 are each amended to read as follows:

(1) Before issuing a vehicle dealer's license, the department shall require the applicant to file with the department a surety bond in the amount of:

(a) Fifteen thousand dollars for motor vehicle dealers;

(b) ((~~Thirty~~)) Ten thousand dollars for mobile home((,)) and park trailer dealers, and fifteen thousand dollars for travel trailer dealers((~~: PROVIDED, That if such dealer does not deal in mobile homes or park trailers such bond shall be fifteen thousand dollars~~));

(c) Five thousand dollars for miscellaneous dealers, running to the state, and executed by a surety company authorized to do business in the state. Such bond shall be approved by the attorney general as to form and conditioned that the dealer shall conduct his or her business in conformity with the provisions of this chapter.

Any retail purchaser, consignor who is not a motor vehicle dealer, or a motor vehicle dealer who has purchased from a wholesale dealer, who has suffered any loss or damage by reason of any act by a dealer which constitutes a violation of this chapter shall have the right to institute an action for recovery against such dealer and the surety upon such bond. However, under this section, motor vehicle dealers who have purchased from wholesale dealers may only institute actions against wholesale dealers and their surety bonds. Successive recoveries against ((~~said~~)) the bond ((~~shall be~~)) is permitted, but the aggregate liability of the surety to all persons shall in no event exceed the amount of the bond. Upon exhaustion of the penalty of ((~~said~~)) the bond or cancellation of the bond by the surety the vehicle dealer license shall automatically be deemed canceled.

(2) The bond for any vehicle dealer licensed or to be licensed under more than one classification shall be the highest bond required for any such classification.

(3) Vehicle dealers shall maintain a bond for each business location in this state and bond coverage for all temporary subagencies.

Sec. 12. RCW 46.70.075 and 1981 c 152 s 3 are each amended to read as follows:

Before issuing a manufacturer license to a manufacturer of mobile homes or travel trailers, the department shall require the applicant to file with the department a surety bond in the amount of ((~~forty~~)) twenty thousand dollars ((~~in the case of a mobile home manufacturer and twenty thousand dollars in the case of a travel trailer manufacturer~~)), running to the state and executed by a surety company authorized to do business in the state. ((~~Such~~)) The bond shall be approved by the attorney general as to form and conditioned that the manufacturer shall conduct his or her business in conformity with the provisions of this chapter and with all standards set by the state of Washington or the federal government pertaining to the construction or safety of such vehicles. Any retail purchaser or vehicle dealer who has suffered any loss or damage by reason of breach of warranty or by any act by a manufacturer which constitutes a violation of this chapter or a violation of any standards set by the state of Washington or the federal government pertaining to construction or safety of such vehicles has the right to institute an action for recovery against such manufacturer and the surety upon such bond. Successive recoveries against the bond shall be permitted, but the aggregate liability of the surety to all persons shall in no event exceed the amount of the bond. Upon exhaustion of the penalty of the bond or cancellation of the bond by the surety the manufacturer license is automatically deemed canceled.