A performance audit of the Arizona Mobile and Manufactured Housing Standards Board

              STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
A PERFORMANCE AUDIT
0 f
THE ARIZONA MOBILE AND
MANUFACTURED HOUSING STANDARDS BOARD
OCTOBER 1979
IMPROVEMENTS ARE NEEDED IN TRUST,
ESCROW AND BONDING REQUIREMENTS FOR
MOBILE HOME PURCHASES TO ENSURE ADE-QUATE
PROTECTION FOR CONSUMERS
A REPORT TO THE
ARIZONA STATE LEGISLATURE
REPORT 79- 13
DOUGLAS R. NORTON, CPA
AUDITOR GENERAL
SUITE 600
112 NORTH CENTRAL AVENUE
PHOENIX, ARIZONA 85004
255- 4385
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
SUITE 820
33 NORTH STONE AVENUE
TUCSON, ARIZONA 85701
882- 5465
October 22, 1979
The Honorable Bruce B a b b i t t , Governor
Members of the Arizona L e g i s l a t u r e
Members of the Mobile and Manufactured Housing Standards Board
Transmitted herewith is a r e p o r t of the Auditor General, - A P erformance Audit of
t h e Arizona Mobile and Manufactured Housing Standards Board. This r e p o r t is i n
response t o a September 19, 1978 r e s o l u t i o n of the J o i n t L e g i s l a t i v e Budget
Committee and a January 18, 1979 r e s o l u t i o n of the J o i n t L e g i s l a t i v e Oversight
Committee.
A summary of t h i s r e p o r t is found on t h e blue pages at the f r o n t of t h e r e p o r t .
A response t o t h i s r e p o r t by the Director and Board members is found on the
yellow pages preceding the appendices of the r e p o r t .
My s t a f f and I w i l l be happy t o meet with the a p p r o p r i a t e l e g i s l a t i v e
committees, i n d i v i d u a l l e g i s l a t o r s o r other s t a t e o f f i c i a l s t o discuss or
c l a r i f y any items i n t h i s r e p o r t or t o f a c i l i t a t e the implementation of the
recommendations.
Respectfully submitted,
~ b u ~ $ dRs. Norton
Auditor General
S t a f f : Gerald A. S i l v a
Dwight Ochocki
Slake Peterson
Kin Beck
Brent Nelson
O F F I C E O F THE AUDITOR GENERAL
A PERFORMANCE AUDIT OF
THE MOBILE AND MANUFACTURED HOUSING STANDARDS BOARD
A REPORT TO THE
ARIZONA STATE LEGISLATURE
REPORT 79- 13
TABLE OF CONTENTS
INTRODUCTION AND BACKGROUND
AUDIT SCOPE AND APPROACH
SUNSET FACTORS
FINDINGS
FINDING I
Improvements a r e needed i n t r u s t , escrow and bonding
requirements f o r mobile home purchases t o ensure
adequate p r o t e c t i o n f o r consumers.
CONCLUSION
RECOMMENDATION
FINDING I1
Improvements a r e needed t o reduce the number of
consumer complaints regarding mobile homes.
CONCLUSION
RECOMMENDATION
FINDING I11
The Division of Mobile and Manufactured Housing
Standards has not adequately informed t h e public
of t h e a s s i s t a n c e it can provide i n resolving
consumer complaints.
CONCLUSION
RECOMMENDATION
FINDING I V
The Division needs t o e s t a b l i s h standards f o r
t r a v e l t r a i l e r s used as permanent residences.
Page
1
3
5
CONCLUSION
RECOMMENDATION
OTHZR PERTINENT INFORMATION
Page
3 4
Recreational vehicle and factory b u i l t building
in- plant i n s p e c t i o n s
PassiSle c o n s o l i d a t i o n o f the Division of Mobile
and Nanufactured Housing Standards within t h e
3 e g i s t r a r of Contractors
WRITTEN RESPONSE TO THE AUDITOR GENERAL'S REPORT
APPENDICES
APPENDIX I - Frequency of i n s p e c t i o n s and monitoring
i n s p e c t i o n procedures performed by
s t a t e s with r e c r e a t i o n a l vehicle
i n s p e c t i o n programs
APPENDIX I1 - S t a t e i n s p e c t i o n programs of factory b u i l t
buildings
ATPZNDIX I11 - Factory b u i l t building manufacturers inspected
i n c a l e n d a r y e a r 1978
APPENDIX I V - L e g i s l a t i v e Council Opinion, September 25, 1979
APPENDIX V - Analysis of complaint review ( sample only)
January 1, 1978 t o December 31, 1978
APPFdJDIX V I - Comparison of manufacturers, d e a l e r s , and
complainants treatment by Division i n resolving
complaints
APPENDIX V I I - Summary of complainant q u e s t i o n n a i r e
APPENDIX V I I I - L i s t i n g of s t a t e a d m i n i s t r a t i v e agencies
taken from Manufacturer's Consumer Manual
APPENDIX I X - Cost of escrow s e r v i c e t o purchasers of new
mobile homes and f a c t o r y b u i l t buildings
The Division o f Building Codes s t a r t e d operations on September 17, 1972. I n
August 1977, the Division nane was changed t o t h e Division of !. lobile and
Manufactured Housing Standards and the Mobile and Manufactured Housing
Standards Board was e s t a b l i s h e d .
The agency was e s t a b l i s h e d t o maintain s t a n d a r d s o f q u a l i t y and s a f e t y f o r
mobile homes, f a c t o r y b u i l t buildings and r e c r e a t i o n a l vehicles and t o p r o t e c t
the consumer of such products and s e r v i c e s . Operations a r e funded primarily
through f e e s f o r i n s p e c t i o n s , l i c e n s e s , plan reviews and i n s i g n i a s , and monies
received from a non- profit corporation.
Our review of the Mobile and Manufactured Housing Standards Board revealed t h a t
d e a l e r t r u s t accounts and bonds do not provide consumers with adequate
p r o t e c t i o n from unscrupulous or i n s o l v e n t d e a l e r s . ( page 19)
I n a d d i t i o n , the number of consumer complaints f i l e d with the Division
regarding mobile homes increased d r a m a t i c a l l y from f i s c a l year 1977- 78 t o 1978-
79. D i v i s i o n p o l i c y and r e g u l a t o r y changes a r e needed t o reduce the number of
such complaints i n t h a t :
- The Division should i n s t i t u t e d i s c i p l i n a r y a c t i o n s a g a i n s t those
manufacturers with an i n o r d i n a t e number of complaints; and
- The Division should continue t o develop a s t r o n g program t o r e g u l a t e
the i n s t a l l a t i o n of mobile homes. ( page 24)
Our reviex a l s o disclosed t h a t many purchasers of new mobile homes,
r e c r e a t i o n a l vehicles and f a c t o r y b u i l t buildings do not know t h a t the Division,
through its complaint process, can help t o r e c t i f y s e r v i c e problems. ( page 29)
F i n a l l y , r e c r e a t i o n a l vehicles which a r e designed t o be used as temporary
l i v i n g q u a r t e r s a r e being used as permanent residences i n Arizona. However, no
performance o r c o n s t r u c t i o n s t a n d a r d s e x i s t i n Arizona f o r r e c r e a t i o n a l
vehicles being used a s peraanent residences. ( page 33)
It is recommended t h a t :
1. Arizona Revised S t a t u t e s 32- 1185 be amended t o eliminate the use of t r u s t
accounts by d e a l e r s . A 1 1 new mobile home s a l e s should be processed
through an escrow agent. Bonds should be increased t o a l e v e l t h a t would
provide adequate p r o t e c t i o n t o consumers. ( page 19)
2. The Board e s t a b l i s h a r u l e or r e g u l a t i o n t o conduct an i n v e s t i g a t i o n on
r e c e i p t of a s p e c i f i e d excessive number of v e r i f i e d complaints.
The D i r e c t o r , a f t e r n o t i c e and hearing suspend o r revoke a l i c e n s e based
upon a f i n d i n g t h a t a l i c e n s e e h a s r e c e i v e d an excessive number of
v e r i f i e d complaints.
Arizona s t a t u t e s be amended t o provide f o r imposition of c i v i l p e n a l t i e s
by a court i f a l i c e n s e e commits c e r t a i n a c t s o r omissions such as an
accumulation of excessive complaints.
The Division continue t o develop a s t r o n g program t o r e g u l a t e the
i n s t a l l a t i o n of mobile homes. ( page 24)
3. To make t h e public more aware of its complaint process, the Division
consider contacting t h e Arizona media and arranging a s e r i e s of public
s e r v i c e announcements. The Division should a l s o consider preparing and
d i s t r i b u t i n g a l e t t e r t o purchasers of new mobile homes, r e c r e a t i o n a l
v e h i c l e s , and factory b u i l t buildings informing them of the D i v i s i o n ' s
complaint process. ( page 29)
4. The Board e s t a b l i s h performance or c o n s t r u c t i o n standards f o r
r e c r e a t i o n a l vehicles being used as permanent residences. ( page 33)
INTRODUCTION AND BACKSROUND -
In response to a September 19, 1978 resolution of the Joint Legislative Budget
Committee and a January 18, 1979 resolution of the Joint Legislative Oversight
Committee, we have conducted a performance audit as a part of the sunset review
of the i4obile and Manufactured Housing Standards Board in accordance with ARS
41- 2351 through 41- 2374.
The bill creating the Division of Building Codes was signed into law by the
Governor on May 17, 1972. The Division was established within the Office of
the Registrar of Contractors and started operations September 17, 1972. A
Director and a seven member hearing board were appointed by the Registrar of
Contractors with the approval of the Governor. The duties of the Director at
that time were to:
1. Provide for t'ne regulation of mobile home, factory built; building and
recreational vehicle manufacturers and dealers.
2 . Establish rules and regulations for the manufacture of mobile homes.
Establish standard codes
3. Require surety bonds of licensees.
4. Require dealers to establish trust accounts.
In August 1977, amendments to the law went into effect. The Division name was
changed to the Division of Mobile and Manufactured Housing Standards, and the
Mobile and Manufactured Housing Standards Board was established. The Board
changed from a hearing board to a five member board that establishes standards
and promulgates rules and regulations. The five members are the Registrar of
Contractors, one representative of the mobile home industry, one
representative of the recreational vehicle industry, one representative of
financial institutions and a member of the public. The Board and Director are
now appointed by the Governor with the consent of the Senate. Added
responsibilities for the Director include:
1. Enforce rules, regulations and standards.
2. Allow cash bonds in lieu of surety bonds.
3. Process and verify complaints.
4. Determine t h a t mobile homes manufactured i n Arizona a r e i n
conformance with U. S. Housing and Urban Development ( HUD)
r e g u l a t i o n s on mobile homes.
5. E s t a b l i s h grounds f o r suspension and revocation of l i c e n s e s .
6 . Pursue unlicensed manufacturers, i n s t a l l e r s and d e a l e r s .
The o b j e c t i v e s of the Division a r e to:
1. Insure t h e q u a l i t y and d u r a b i l i t y of mobile homes and t o a l e s s e r
e x t e n t r e c r e a t i o n a l vehicles and f a c t o r y b u i l t buildings.
2. P r o t e c t t h e public a g a i n s t physical harm and f i n a n c i a l l o s s .
3. Handle complaints and hearings f a i r l y .
The following t a b l e i n d i c a t e s t h e agency's growth s i n c e its i n c e p t i o n .
1978- 79
1972- 73 1975- 75 1977- 78 - Esti- mat ed
Number of Employees 12 2 1 3 0 37
Expenditures $ 1 55,000 $ 362,154 $ 523,259 $ 776,800
Receipts $ 419,997 $ 416,779 $ 523,875 $ 786,100
Sources of revenue t o the agency are:
1 . In- plant i n s p e c t i o n and plan review fees imposed upon manufacturers
of mobile homes, r e c r e a t i o n a l v e h i c l e s , and factory b u i l t buildings.
2. I n s i g n i a f e e s imposed upon manufacturers of r e c r e a t i o n a l vehicles
and f a c t o r y b u i l t buildings who s h i p u n i t s t o Arizona f o r s a l e .
3. License f e e s imposed upon manufacturers and d e a l e r s of mobile homes,
r e c r e a t i o n a l v e h i c l e s , and f a c t o r y b u i l t b u i l d i n g s , and i n s t a l l e r s
of mobile homes.
4. Monies from the National Conference of S t a t e s on Building Codes and
Standards which a r e t o be used t o analyze and review mobile home
complaints. The amount o f such monies is based upon the number of
mobile home u n i t s f i r s t placed i n Arizona.
Audit Scope And Approach
The a u d i t scope included a review of t h e o p e r a t i o n s of the Board and the
Division. The a u d i t focused primarily on f i s c a l years 1977- 78 and 1978- 79.
The a u d i t approach was t o review t h e s t a t u t e s and r u l e s and r e g u l a t i o n s
governing the Board and Division t o a s c e r t a i n t h e i r g o a l s , o b j e c t i v e s and
procedures. The e f f e c t i v e n e s s and e r f i c i e n c y of the Board and Division were
assessed through i n t e r v i e w s w i t h board members, a d m i n i s t r a t i v e s t a f f , d e a l e r s ,
manufacturers, and consumers; examination of f i l e s , documents and other
r e c o r d s ; review of p e r t i n e n t f i n a n c i a l d a t a ; and through q u e s t i o n n a i r e s mailed
t o d e a l e r s , manufacturers, and consumers. The i n f o r m a t i o n o b t a i n e d from these
procedures is t h e b a s i s f o r the c o n t e n t s o f t h i s r e p o r t .
The Office of the Auditor General expresses its g r a t i t u d e t o present and former
ernplojrees of the Division and nembers of the Board f o r t h e i r cooperation,
a s s i s t a n c e and c o n s i d e r a t i o n during t h e course of our a u d i t .
SUNSET FACTORS
In accordance with ARS 41- 2351 through 41- 2374, nine f a c t o r s were considered t o
determine, i n p a r t , whether the Mobile and Manufactured Housing Standards Board
and Division of Xobile and Manufactured Housing Standards should be continued
o r terminated.
These f a c t o r s are:
1 . Objective and purpose i n e s t a b l i s h i n g the agency,
2. The degree t o which the agency has been a b l e t o respond t o the needs of the
public and the e f f i c i e n c y with which it has operated,
3. The extent t o which the agency has operated within t h e public i n t e r e s t ,
4. The e x t e n t t o which r u l e s and r e g u l a t i o n s promulgated by t h e agency a r e
c o n s i s t e n t with the l e g i s l a t i v e mandate,
5. The e x t e n t t o which the agency has encouraged input from the public
before promulgating its r u l e s and r e g u l a t i o n s and t h e e x t e n t t o which it
has informed the public a s t o its a c t i o n s and t h e i r expected impact on the
p u b l i c ,
6. The e x t e n t t o which the agency has been a b l e t o i n v e s t i g a t e and resolve
complaints t h a t a r e within its j u r i s d i c t i o n ,
7 . The e x t e n t t o which the Attorney General or any o t h e r a p p l i c a b l e agency of
s t a t e government has t h e a u t h o r i t y t o prosecute a c t i o n s under enabling
l e g i s l a t i o n ,
8. The extent t o which t h e agency has addressed d e f i c i e n c i e s i n its
enabling s t a t u t e s which prevent them from f u l f i l l i n g t h e i r s t a t u t o r y
mandate, and
9. The extent t o which changes a r e necessary i n the laws of the agency t o
adequately comply with the f a c t o r s l i s t e d i n t h i s subsection.
SUNSET FACTOR: OBJECTIVE AND
PURPOSE I N ESTABLISHING
THE AGENCY
Arizona Revised S t a t u t e s 32- 1171 s t a t e s :
" The d i v i s i o n of mobile and manufactured housing standards
is e s t a b l i s h e d t o f u r t h e r the public i n t e r e s t s of s a f e t y
and welfare. The purpose of t h i s a r t i c l e is t o maintain
standards of q u a l i t y and s a f e t y f o r mobile homes, f a c t o r y
b u i l t buildings and r e c r e a t i o n a l v e h i c l e s . The a f f a i r s of
the d i v i s i o n of mobile and manufactured housing standards
s h a l l be conducted c o n s i s t e n t l y with minimum standards of
the United S t a t e s department of housing and urban
development s o a s t o be designated the ' s t a t e i n s p e c t o r '
f o r mobile homes and r e l a t e d i n d u s t r i e s . The d i v i s i o n
s h a l l implement a l l e x i s t i n g laws and r e g u l a t i o n s mandated
by the f e d e r a l government, its agencies and t h i s s t a t e f o r
such purposes. The d i v i s i o n s h a l l accomplish such
purposes by the enforcement of r e g u l a t i o n s and laws
p e r t a i n i n g t o the housing q u a l i t y s t a n d a r d s o f t h e mobile
home, f a c t o r y b u i l t building and r e c r e a t i o n a l v e h i c l e
manufacturing and c o n s t r u c t i o n i n d u s t r i e s and t h e
enforcement of r e g u l a t i o n s and laws p e r t a i n i n g t o t h e
l i c e n s i n g of manufacturers, d e a l e r s and i n s t a l l e r s .
It is a l s o the purpose of t h i s a r t i c l e t o e s t a b l i s h a
procedure t o p r o t e c t t h e consumer o f such products and
s e r v i c e s . "
The United S t a t e s Code ( 42 U. S. C. 5401) s t a t e s :
" The Congress declares t h a t the purposes of t h i s chapter
a r e t o reduce the number of personal i n j u r i e s and deaths
and the amount of insurance c o s t s and property damage
r e s u l t i n g from mobile home accidents and t o improve t h e
q u a l i t y and d u r a b i l i t y of mobile homes. Therefore, t h e
Congress determines t h a t it is necessary t o e s t a b l i s h
Federal c o n s t r u c t i o n and s a f e t y standards f o r mobile homes
and t o a u t h o r i z e mobile home s a f e t y research and
development. If
SUNSET FACTOR: THE DEGREE TO WHICH
THE AGENCY HAS BEEN ABLE TO RESPOND
TO THE NEEDS OF THE PUBLIC AND THE
EFFICIENCY WITH WHICH IT HAS OPERATED
A survey was conducted by the O f f i c e o f the Auditor General of consumers who *
had f i l e d complaints with the Division i n the 1978 c a l e n d a r y e a r . These
complainants were asked t o r a t e the usefulness o f t h e Division i n resolving
t h e i r complaints. Their responses were:
Excluding Responses on
Complaints Not Within J u r i s d i c t i o n
A l l Responses of Division*
Number Percent Number Percent
Very useful 23 52% 2 3 70 %
Useful 3 7 2 6
: Jot useful 18 4 1 8 24
Based upon the above survey responses it appears t h a t the Division has been
e f f e c t i v e i n resolving consumer complaints t h a t a r e within its j u r i s d i c t i o n .
Areas where the agency does not respond t o public needs are:
1 . P r o t e c t i n g the consumer from unscrupulous d e a l e r s through t r u s t
accounts, escrow accounts o r increased bonds. ( See page 15 f o r a
d i s c u s s i o n o f t h i s i s s u e . )
2. P r c t e c t i n g t h e purchasers of new t r a v e l t r a i l e r s used f o r permanent
residences by e s t a b l i s h i n g standards f o r performance o r construction.
( See page 3 3 f o r a discussion of t h i s i s s u e .
* The Division does not have j u r i s d i c t i o n over complaints f i l e d more than
one year a f t e r t h e d a t e of purchase.
In April 1979 the Division withdrew from its p a r t i c i p a t i o n i n the mobile home
monitoring program of the National Conference of S t a t e s on Building Codes and
Standards, Inc. ( NCSBCS). The NCSBCS is a non- profit corporation t h a t was
founded i n 1967 t o i n c r e a s e i n t e r s t a t e cooperation and t o coordinate
i n t e r g o v e r m e n t a l reforms i n t h e a r e a of building codes. The A s s i s t a n t
I
D i r e c t o r o f t h e Division i n a l e t t e r t o the D i r e c t o r o f NCSBCS s t a t e d t h a t :
'' Ye f i n d it necessary t o take the above a c t i o n due t o the
lack of personnel within the Division i n order t o be able
t o handle our immediate i n - S t a t e requirements."
This a c t i o n allowed the Division t o make more e f f i c i e n t use o f budgeted
personnel.
SUNSET FACTOR: THE EXTENT TO WHICH
THE AGENCY HAS OPERATED WITHIN
THE PUBLIC INTEREST
The Division is the s o l e i n s p e c t o r of mobile homes i n Arizona. To be c e r t i f i e d
a s the Production Inspection Primary Inspection Agency ( IPIA) f o r Arizona the
agency must meet the standards e s t a b l i s h e d by the U. S. Department of Housing
and Urban Development ( HUD). On J u l y 10, 1979, P a t r i c i a M. Worthy, Deputy a
A s s i s t a n t and Secretary f o r Regulatory Functions f o r HUD, s t a t e d i n a l e t t e r t o
the D i r e c t o r :
" A monitoring review of your IPIA functions has been
conpleted i n accordance with 3282.355( d) of the Federal
Regulations. Based on t h i s review, the Secretary has
determined t h a t t h e l e v e l of performance of your Agency a s
an IPIA is adequate."
A survey* wascondueted by the O f f i c e o f t h e Auditor General of consumers who
had f i l e d complaints with t h e Division i n t h e 1978 calendar year. These
( I
complainants were asked t o r a t e the D i v i s i o n ' s a b i l i t y t o be f a i r and
i m p a r t i a l . Consumer responses t o the survey a r e summarized a s follows:
* See Appendix V I
Very f a i r and i m p a r t i a l
Above average
Average
Below average
Biased
FJo opinion
Percent
Sased upon the above survey responses it appears t h a t the D i v i s i o n ' s i n s p e c t o r s
a r e resolving complaints f a i r l y and i m p a r t i a l l y .
SUNSET FACTOR: THE EXTENT TO NHICH
RULES AND REGULATIONS PROMULGATED BY
THE AGENCY ARE CONSISTENT WITH THE
LEGISLATIVE MANDATE
A review of the Board's r u l e s and r e g u l a t i o n s revealed t h a t they a r e c o n s i s t e n t
with the l e g i s l a t i v e mandate.
SUNSET FACTOR: THE EXTENT TO WHICH
THE AGENCY HAS ENCOURAGED INPUT FROM
THE PUBLIC BEFORE PROMULGATING ITS RULES
AND REGULATIONS AND THE EXTENT TO WHICH
I T HAS INFORMED THE PUBLIC AS TO ITS
ACTIONS AND THEIR EXPECTED IMPACT
ON THE PUBLIC
I n a d d i t i o n t o posting n o t i c e s of meetings as required by law, the Division
maintains a list of l i c e n s e e s and other p a r t i e s i n t e r e s t e d i n receiving such
information a s meeting n o t i c e s and r u l e s and r e g u l a t i o n s . Included on t h e
list a r e :
A. Three newspapers, two of which are primarily concerned with
reporting mobile home news,
3. Representatives of local jurisdictions,
C. A surety company, and
D. A savings and loan association.
According to the Assistant Director, a consumer would be placed on the mailing 4
list upon request.
The Division was also responsible for an article on the Division's complaint
process that appeared in an Arizona mobile home newspaper. Several other d
articles have appeared in Arizona newspapers covering such topics as:
A. Disputes and agreements between the Board and the industry regarding
the mounting of propane tanks on recreational vehicles,
B. House committee which reviewed mobile home safety, and
C. Problems with trust accounts used by mobile home and factory built
building dealers.
The Division is also listed in the Consumer Assistance Directory prepared by Y
the. Information and Referral Services."
Finally, the Division requires that the name of the applicant for licenses as a
dealer or manufacturer of mobile homes, recreational vehicles, or factory built ( I
buildings or installer of mobile homes be posted on the bulletin board in the
Occupational Licensing Building for 20 days to see if anyone from the public
knows why a license should not be issued to the applicant. The names of all
applicants are also distributed to one mobile home newspaper for possible
publication.
* A department of the community council which is a planning agency that
attempts to search out and solve community needs. Funding is provided by
the Arizona Department of Economic Security, City of Phoenix, and the
United Way.
SUNSET FACTOR: THE EXTENT TO WHICH
THE AGENCY HAS BEEN ABLE TO IMVESTIGATS
AND RESOLVE COXPLAINTS THAT ARE WITHIN
ITS JURISDICTION
Our review of the complaints received by the D i v i s i o n r e v e a l e d t h a t 37 percent
a r e s e t t l e d between consumer and d e a l e r o r manufacturer before i n v e s t i g a t i o n is
i n i t i a t e d by the Division and 63 percent r e q u i r e a d i v i s i o n i n v e s t i g a t i o n . The
Division i n v e s t i g a t e d a l l unresolved complaints within its j u r i s d i c t i o n .
It should be noted t h a t i f a complaint is not resolved a f t e r an i n v e s t i g a t i o n
by t h e D i v i s i o n , t h e complainant may ask t h a t a c i t a t i o n be issued by the
Division t o the l i c e n s e e r e q u i r i n g a v e r i f i e d answer t o t h e complaint within
ten days a f t e r s e r v i c e of the c i t a t i o n . The complainant may a l s o request a
hearing i f the complaint cannot be resolved. One possible outcome of t h e
hearing could be probation f o r t h e l i c e n s e e o r suspension or revocation o f t h e
l i c e n s e .
From September 1, 1977 t o June 30, 1979, t h e Division of Mobile and
Nanufactured Housing Standards suspended 14 l i c e n s e s and revoked t h r e e other
l i c e n s e s . Thirteen of the 14 suspensions were a c t u a l l y suspensions i n t h e form
of probations. Under ARS 32- 1188 t h e D i r e c t o r , as of J u l y 1979, may now i s s u e
probations. P r i o r t o J u l y 1979, the Director could only suspend or revoke a
l i c e n s e .
Our review revealed t h a t the following f a c t o r s impair t h e D i v i s i o n ' s a b i l i t y t o
i n v e s t i g a t e and resolve complaints:
1. Forty- eight percent of the complainants surveyed s a i d they had
problems i n determining where t o r e g i s t e r t h e i r complaints. ( See page
26 f o r a d i s c u s s i o n o f t h i s i s s u e . )
2. The Division has not d i s c i p l i n e d chronic problem manufacturers.
( See page 20 f o r a discussion of t h i s i s s u e . )
3. Complaints a r e i n c r e a s i n g at a s i g n i f i c a n t r a t e . ( See page 23 f o r a
discussion of t h i s i s s u e . )
SUNSET FACTOR: THE EXTENT TO WHICH
THE ATTORNEY GENERAL OR ANY OTHER
APPLICABLE AGENCY OF STATE GOVERNMENT
HAS THE AUTHORITY TO PROSECUTE ACTIONS
UNDER THE ENABLING LEGISLATION
The D i r e c t o r o f the Division of Mobile and Manufactured Housing Standards can •
i s s u e cease and d e s i s t orders t o s t o p unlicensed a c t i v i t y .
The Attorney General's Office l e g a l a u t h o r i t y f o r the Division involves:
A. Obtaining i n j u n c t i o n s i n Superior Court t o r e s t r a i n and enjoin a g
person from engaging i n unlicensed a c t i v i t y .
B. Representing t h e Division at a d m i n i s t r a t i v e hearings when a l i c e n s e
is denied, suspended o r revoked due t o the D i v i s i o n ' s i n i t i a t i v e .
There appears t o be s u f f i c i e n t a u t h o r i t y t o prosecute a c t i o n s within the
D i v i s i o n ' s a r e a of r e s p o n s i b i l i t y .
SUNSET FACTOR: THE EXTENT TO WHICH
THE . AGENCY HAS ADDRESSED DEFICIENCIZS
I N THEIR ENABLING STATUTES WHICH PREVENT
THEM FROM FULFILLING THEIR STATUTORY MANDATE
During the 1977, 1978 and 1979 l e g i s l a t i v e s e s s i o n s t h e Division has proposed
s e v e r a l pieces of l e g i s l a t i o n including a massive r e s t r u c t u r i n g o f t h e laws on
manufactured housing. Senate B i l l 1079, introduced January 25, 1977, proposed a
complete r e w r i t e of laws on manufactured housing. Senate B i l l 1094, introduced
( January 1 G , 1978, was a clean- up b i l l t h a t c o r r e c t e d o v e r s i g h t s made i n the 1977
law change. Senate B i l l 1238, introduced i n 1979, provided c o r p o r a t i o n s with
the option of being represented by corporate o f f i c e r s r a t h e r than lawyers a t
hearings. A l l of the previously l i s t e d b i l l s eventually became law.
The A s s i s t a n t D i r e c t o r and former Director have t e s t i f i e d a number of times
before l e g i s l a t i v e committees regarding other b i l l s t h a t impacted upon the
manufactured housing industry o r its r e g u l a t i o n .
SUNSET FACTOR: THE EXTSNT TO WHICH
CHANGES ARE NECESSARY I N THE LAWS OF
THE AGENCY TO ADEQUATELY COMPLY WITH
THE FACTORS LISTED I N THIS SUBSECTION
- Eliminate the option of using t r u s t accounts from ARS 3 2 - 1 1 8 5 ( ~ ) . Require
t h a t a l l new mobile home s a l e s be processed through an escrow agent.
( page 13)
FINDING I
IMPROVEMENTS ARE NEEDED I N TRUST, ESCROW AND BONDING REQUIREMENTS FOR MOBILE
BOME PYRCHASES TO ENSURE ADECUATE PROTECTION FOR CONSUMERS.
Arizona s t a t u t e s allow mobile home and factory b u i l t building dealers t o place
earnest monies received from customers i n t o t r u s t accounts which are under the
control of the dealers. The use of t r u s t accounts does not afford s u f f i c i e n t
protection t o consumers i n t h a t : 1) Division examinations of a limited number
of t r u s t accounts have i d e n t i f i e d numerous abuses; and 2) i n the event a dealer
ceases operation, t r u s t account monies may not be returned t o the customers who
paid i n t o the accounts. In a d d i t i o n , c u r r e n t surety bond requirements for
dealers do not afford consumers adequate protection from unscrupulous or
insolvent dealers.
I d e n t i f i e d Trust Account Abuses
Arizona Revised S t a t u t e s 32- 1185 r e q u i r e s d e a l e r s to place earnest monies from
customers i n e i t h e r a t r u s t account or escrow account and s t a t e s , i n part:
" A. Each d e a l e r l i c e n s e d pursuant t o t h i s a r t i c l e who
s e l l s mobile homes or factory b u i l t buildings s h a l l
maintain a t r u s t account or an escrow account with a
f i n a n c i a l i n s t i t u t i o n or escrow agent located i n t h i s
s t a t e and s h a l l deposit a l l earnest money received
f o r the sale of mobile homes or factory b u i l t
buildings i n such account.
B. A l l earnest money deposited i n the t r u s t or escrow
account s h a l l be held i n such account u n t i l one of the
following is completed:
1. Application for t i t l e t r a n s f e r has been made.
2. The transaction involved is consummated or
terminated and proper accounting is made.
" C . Upon completion of subsection B t h e e a r n e s t money
deposit s h a l l be conveyed t o the l e n d i n g i n s t i t u t i o n
or the d e a l e r , o r purchaser, whichever is
a p p l i c a b l e . "
A sample of 52 mobile home d e a l e r s by the Office of t h e Auditor General
revealed t h a t the d e a l e r s which were examined used t r u s t accounts exclusively.
a
Trust accounts can be e i t h e r checking o r savings accounts which a r e maintained
and c o n t r o l l e d by t h e d e a l e r . This element of c o n t r o l by the d e a l e r allows for
p o t e n t i a l abuses which could r e s u l t i n f i n a n c i a l l o s s e s t o consumers.
From J u l y 1977 t o April 1979, t h e Division conducted t r u s t account a
examinations on 37 of approximately 210 mobile home d e a l e r s i n Arizona. O f the
37 examinations t h a t were conducted, 24 i n d i c a t e d t h e need f o r f u r t h e r
i n v e s t i g a t i o n because of possible d e a l e r abuses such as:
1. The commingling of o p e r a t i o n a l monies with e a r n e s t monies received ( I
from purchasers;
2. The removal of e a r n e s t money from t r u s t accounts p r i o r t o the
consummation of the purchase c o n t r a c t ;
3. Dealers n o t d e p o s i t i n g a l l e a r n e s t monies received i n t r u s t a
accounts;
4. No records t o document the f i n a l d i s p o s i t i o n of funds or v e r i f y t h a t
t h e t r a n s a c t i o n had been properly consummated o r terminated.
( I
It should be noted t h a t the Division conducted follow- up examinations on only
f i v e of the 24 d e a l e r s i d e n t i f i e d as warranting f u r t h e r i n v e s t i g a t i o n . It
should a l s o be noted t h a t the 37 d e a l e r s examined by the D i v i s i o n r e p r e s e n t
only 18 percent of t h e 210 mobile home d e a l e r s i n Arizona. Thus it appears,
based upon the D i v i s i o n ' s l i m i t e d examinations, t h a t t r u s t account abuses by
mobile home d e a l e r s may be pervasive.
Trust Account Monies May Not
Be Returned To Customers
From July 1977 t o April 1979, five mobile home d e a l e r s have ceased operation i n
Arizona r e s u l t i n g i n f i n a n c i a l l o s s t o customers.
Customers'earnest monies i n dealer t r u s t accounts a t the time the d e a l e r ceases
operation may not be returned. For example, i n April 1979, a mobile home
dealer ceased operation. A t t h e time t h e dealer ceased o p e r a t i o n f o u r
customers had made deposits t o t a l i n g $ 36,846 t o the d e a l e r . A s of September
20, 1979, these customers had n o t r e c e i v e d t h e i r mobile homes, f o r which they
paid t h e i r e a r n e s t money, o r had t h e i r e a r n e s t money returned t o them.
In October 1977, t h i s d e a l e r ' s t r u s t account was examined and t h e i n v e s t i g a t i o n
revealed t h a t t h e d e a l e r did not:
1. Deposit a l l e a r n e s t monies received from a buyer t o bind s a l e s i n the
account;
2. I d e n t i f y on the deposit r e c e i p t t h e type o f e a r n e s t money received;
3. Deposit a l l e a r n e s t monies no l a t e r than the second business day
a f t e r t h e r e c e i p t of the monies;
4. Maintain a complete record of a l l e a r n e s t monies received;
5. I d e n t i f y a t the time of withdrawal of the funds from the depository
t h a t t h e t r a n s a c t i o n had been properly consummated o r terminated;
and
6. I d e n t i f y t h a t the deposits r e f e r r e d t o i n the r u l e s of the Division
had not been u t i l i z e d f o r any other purpose except f o r the
t r a n s a c t i o n f o r which they were provided.
This d e a l e r ' s account was t a r g e t e d by the Division as r e q u i r i n g a follow- up
i n v e s t i g a t i o n . A follow- up i n v e s t i g a t i o n never occurred and i n April 1979, the
dealer ceased operations with a balance of only $ 10 i n t h e t r u s t account.
Bonds Do Not Afford
Adequate Protection
To Consumers
Arizona Revised S t a t u t e s 32- 1184 r e q u i r e s d e a l e r s to post a surety bond or cash
deposit prior t o being licensed and s t a t e s , i n part:
" A. Before granting an o r i g i n a l l i c e n s e , t h e director
s h a l l r e q u i r e o f t h e a p p l i c a n t a surety bond i n a form
acceptable t o t h e d i r e c t o r o r a cash deposit pursuant
t o t h i s section. A separate bond or cash deposit
s h a l l be required for each branch location of any
licensed manufacturer, dealer, broker or i n s t a l l e r .
No l i c e n s e s h a l l be renewed unless the a p p l i c a n t ' s
surety bond or cash deposit is i n f u l l force and
e f f e c t .
B. The bonds or cash deposit s h a l l be i n amounts fixed by
the director i n the schedule adopted and promulgated
i n the r u l e s and regulations." ( Emphasis added)
A surety bond or cash deposit amount was established by the Director i n
September 1973 a t $ 5,000. It does not appear t h a t t h i s amount affords adequate
protection t o consumers i n view of: 1) the average p r i c e o f a mobile home i n
1977 was $ 1 4,500" and 2) the average price of a mobile home has nearly doubled* 4
since 1973 when the Director established the $ 5,000 bond amount.
Advantages Of Escrow Accounts
Escrow accounts provide consumers with more protection against dealer ( I
defalcation than do t r u s t accounts. Under an escrow arrangement the purchase
agreement and earnest monies are held by an escrow agent. The escrow agent
prepares a l l the papers necessary f o r t h e t r a n s f e r of t i t l e and sends them t o
the Motor Vehicle Division of the Arizona Department of Transportation ( ADOT) 4
t o be processed. Once the application f o r t r a n s f e r of t i t l e has been mailed t o
ADOT, the money may be released t o the dealer.
Based upon U. S. Department of Housing and Urban Development S t a t i s t i c s .
The use of escrow agents o f f e r s a number of advantages when compared t o t r u s t
accounts. The advantages provided t o purchasers, d e a l e r s and the Division
include:
1 . Purchaser's deposit w i l l be s a f e from d i v e r s i o n s ;
2. A l l aonies a r e handled and c o n t r o l l e d by an independent t h i r d party;
3. Dealers would have t o prepare and r e t a i n fewer and l e s s d e t a i l e d
records ;
4. Dealers a r e r e l i e v e d of the burden of preparing t i t l e papers; and
5. Examination of d e a l e r records by the Division would still be
necessary b u t such a review would be much l e s s time consuming than a
t r u s t account review.
T, he c o s t of the use of escrow accounts is estimated t o be $ 38 t o $ 125 f o r each
u n i t . ( See Appendix IX)
CONCLUSION
Dealer t r u s t accounts and bonds do not provide adequate p r o t e c t i o n f o r
consumers from unscrupulous or i n s o l v e n t d e a l e r s .
It is recommended t h a t c o n s i d e r a t i o n be given t o t h e following:
1 . Arizona Revised S t a t u t e s 32- 1185 be amended t o e l i m i n a t e the use of t r u s t
accounts by d e a l e r s . A l l new mobile home s a l e s should be processed
through an escrow agent.
2. Bonds be increased t o a l e v e l t h a t would provide adequate p r o t e c t i o n t o
consumers.
L e g i s l a t i o n must be enacted i n order t o implement the f i r s t recommendation.
FINDING I1
IMPROVEMENTS ME NEEDED TO REDUCE THE NUMBER OF CONSUMER COMPLAINTS REGARDING
MOBILE HOMES.
The number of consumer complaints f i l e d with the D i v i s i o n r e g a r d i n g mobile
homes increased d r a m a t i c a l l y from f i s c a l year 1977- 78 t o 1978- 79. Division
policy and r e g u l a t o r y changes a r e needed t o reduce t h e number of such
complaints i n t h a t :
- The Division should i n s t i t u t e d i s c i p l i n a r y a c t i o n s a g a i n s t those
manufacturers with an i n o r d i n a t e number of complaints, and
- The Division should continue t o develop a s t r o n g program t o r e g u l a t e
t h e i n s t a l l a t i o n of mobile homes.
Manufacturers With An
I n o r d i n a t e Number Of
Complaints
I n 1978 t h r e e of t h e 11 mobile ho11l. e manufacturers i n Arizona received 55
percent of a l l consumers complaints f i l e d with t h e Division a g a i n s t Arizona
mobile home manufacturers. Table 1 summarizes the consumer complaints f i l e d
a g a i n s t t h e s e 11 manufacturers i n 1978.
TABLE 1
Manufacturer*
Total
SUMMARY OF CONSUMER COMPLAINTS FILED WITH THE DIVISION
ON MOBILE HOMES MANUFACTURED I N ARIZONA I N 1978
Ratio of Consumer Ratio of Consumer
Number of Number of Complaints Per Complaints Per 100 Units
Units Consumer 100 Units Manufactured and
Manufactured** - Comp- laints " ** - Id- an- uf- ac- tu red Placed in Arizo- na-
* ** L i s t e d i n order from lowest r a t i o t o t h e highest r a t i o of complaints t o u n i t s manufactured and placed i n Arizona. I n accordance with Housing and Urban Development r e g u l a t i o n s each u n i t produced is inspected by the Division a t
some s t a g e of manufacture. *** Most of t h e problems l i s t e d on the complaint forms were i d e n t i f i e d a s manufacturer r e s p o n s i b i l i t y by the
Division, although some were i d e n t i f i e d a s d e a l e r and/ or i n s t a l l e r r e s p o n s i b i l i t y .
A s shown i n Table 1 , t h e t h r e e manufacturers with the highest r a t i o s of
consumer complaints per 100 u n i t s exceeded t h e r a t i o of the next highest
manufacturer by two t o t h r e e times. It should be noted t h a t the t h r e e
manufacturers with the highest complaint r a t i o s a r e not the manufacturers t h a t
produce the g r e a t e s t number of mobile homes. I n f a c t , t h e two l a r g e s t mobile
home manufacturers i n Arizona had complaint r a t i o s t h a t were s i g n i f i c a n t l y
lower than the r a t i o s f o r t h e t h r e e companies with the highest complaint
r a t i o s .
Currently the Director does not have t h e a u t h o r i t y t o f i n e manufacturers but he
may suspend o r revoke t h e i r l i c e n s e s f o r excessive complaints. I n t h i s regard
the L e g i s l a t i v e Council i n an o p i n i o n d a t e d September 25, 1979*, s t a t e d :
" The d i v i s i o n of mobile and manufactured housing standards
is not authorized t o levy f i n e s a g a i n s t l i c e n s e e s . The
d i v i s i o n may i n i t i a t e a criminal a c t i o n upon one o r more
complaints, whether s t a t i s f i e d or n o t , and a criminal
a c t i o n upon one o r more complaints, whether s a t i s f i e d o r
n o t , and a court may impose a f i n e f o r each v i o l a t i o n f o r
which a l i c e n s e e is convicted.
... the d i v i s i o n has t h e a u t h o r i t y t o i n v e s t i g a t e
manufacturers, d e a l e r s and i n s t a l l e r s a g a i n s t whom it
receives an excessive number of complaints and t o pursue
manufacturers, d e a l e r s and i n s t a l l e r s a g a i n s t whom a
complaint is v e r i f i e d .
... consider t h e excessive number of p r i o r v e r i f i e d
complaints i n determining whether t h e l i c e n s e should be
suspended or revoked, even i f t h e l i c e n s e e s a t i s f i e d t h e
p r i o r complaints.
The d i v i s i o n has the a u t h o r i t y t o i n v e s t i g a t e
manufacturers, d e a l e r s and i n s t a l l e r s on its own motion
and is mandated t o pursue manufacturers, d e a l e r s and
i n s t a l l e r s a g a i n s t whom a complaint is v e r i f i e d . However,
you may wish t o recommend t h a t the s t a t u t e s be amended t o
provide f o r imposition of c i v i l p e n a l t i e s by a court if a
l i c e n s e e commits c e r t a i n a c t s o r omissions. I n a d d i t i o n ,
the e n t i r e s t a t u t o r y framework regarding t h e d i v i s i o n
should be reviewed and amendments recommended t o c l a r i f y
the procedures and t h e a u t h o r i t y o f t h e p a r t i e s involved."
i Appendix I V contains a f u l l t e x t of t h i s opinion.
A Strong Program To
Regulate The I n s t a l l a t i o n
Of Mobile Homes
Consuaer complaints regarding mobile homes t h a t were f i l e d with the Division
increased from 354 i n f i s c a l year 1977- 78 t o 686 i n f i s c a l year 1978- 79, an
i n c r e a s e of 94 percent. The former Director a t t r i b u t e s 40 percent of these
consumer complaints t o improper set- up o r i n s t a l l a t i o n of mobile homes.
The Division c u r r e n t l y does not have a f u l l y implemented program t o r e g u l a t e
t h e i n s t a l l a t i o n of mobile homes. A survey conducted by the Office of the
Auditor General revealed t h a t those s t a t e s t h a t have e s t a b l i s h e d i n s t a l l a t i o n
r e g u l a t o r y and enforcement programs have experienced a n o t i c e a b l e d e c l i n e i n
complaints. The following comments a r e from o f f i c i a l s of t h r e e s t a t e s with
i n s t a l l a t i o n ( set- up) programs.
Russell R . Bahr, Mobile Home Progran Manager, C a l i f o r n i a Department of Housing
and Community Development:
" Three years a f t e r t h e program began i n C a l i f o r n i a ,
complaints r e l a t e d t o i n s t a l l a t i o n were reduced by 35%."
Mitchell Baker, D i r e c t o r , Arkansas Mobile Home Standards:
!! The set- up program i n Arkansas reduced complaints
considerably."
Harry Christensen, A s s i s t a n t Administrator, Texas Mobile Home Division of the
Department of Labor and Standards:
" A s a r e s u l t of the i n s t a l l a t i o n program i n Texas
complaints from poor set- up have decreased."
It should be noted t h a t the Division is c u r r e n t l y i n the process of
e s t a b l i s h i n g a set- up program i n Arizona. This program w i l l involve a g r e a t
deal of coordination and cooperation with l o c a l j u r s i d i c t i o n s . The former
Director f e e l s t h a t a s t r o n g i n s t a l l a t i o n program w i l l s i g n i f i c a n t l y reduce
complaints.
CONCLUSION
The number of consumer complaints f i l e d with t h e D i v i s i o n r e g a r d i n g mobile
homes increased d r a m a t i c a l l y from f i s c a l year 1977- 78 t o 1978- 79. Division
policy and r e q d a t o r y changes a r e needed t o reduce t h e number of such
complaints i n t h a t :
- The Division should i n s t i t u t e d i s c i p l i n a r y a c t i o n s a g a i n s t those
manufacturers with an i n o r d i n a t e number o f complaints, and
- The Division should continue t o develop a s t r o n g program t o r e g u l a t e
the i n s t a l l a t i o n of mobile homes.
RECOMMENDATION
It is recommended t h a t :
1. The Board e s t a b l i s h a r u l e o r r e g u l a t i o n t o conduct an i n v e s t i g a t i o n
on r e c e i p t of a s p e c i f i e d excessive number of v e r i f i e d complaints.
2. The D i r e c t o r , a f t e r n o t i c e and hearing, suspend or revoke a l i c e n s e
based upon a f i n d i n g t h a t a l i c e n s e e has received an excessive number
of v e r i f i e d complaints.
3. Arizona s t a t u t e s be amended t o provide f o r imposition of c i v i l
p e n a l t i e s by a court i f a l i c e n s e e commits c e r t a i n a c t s or omissions
such a s an accumulation of excessive complaints.
4. The D i v i s i o n c o n t i n u e t o develop a s t r o n g program t o r e g u l a t e t h e
i n s t a l l a t i o n of mobile homes.
FINDING I11
THE DIVISION OF MOBILE AND MANUFACTURED HOUSING STANDARDS HAS NOT ADEQUATELY
INFOR! J~ ED TI- IE PUBLIC OF THE ASSISTANCE IT CAN PROVIDE I N RESOLVING CONSUMER
COMPLAINTS.
A survey o f consumers who had f i l e d complaints with the Division revealed t h a t
n e a r l y h a l f had d i f f i c u l t y i n i d e n t i f y i n g t h e Division as t h e a p p r o p r i a t e S t a t e
agency t o receive such complaints. A s a r e s u l t it appears t h a t the Division
needs t o b e t t e r inform t h e public t h a t it can assist them with consumer
complaints.
Public Inadequately Informed
When consumers experience problems with t h e i r mobile homes t h e y s h o u l d contact
the d e a l e r or manufacturer f i r s t t o r e s o l v e the problem. If the problem cannot
be s a t i s f a c t o r i l y resolved at t h a t point then t h e consumer should contact the
Division and f i l e a complaint i n w r i t i n g .
The- former D i r e c t o r o f the Division f e e l s t h a t t h e average complaint should be
completed i n 30 t o 60 days* computed a s follows:
1. Manufacturer o r d e a l e r has 15 days t o make r e p a i r s a f t e r r e c e i v i n g
n o t i f i c a t i o n from the Division t h a t a complaint had been f i l e d .
2. Division has t e n days t o v e r i f y t h e consumer's complaint i f t h i s s t e p
is necessary.
3. Manufacturer o r d e a l e r has 30 days t o make r e p a i r s a f t e r r e c e i v i n g
n o t i f i c a t i o n from the Division t h a t t h e complaint had been v e r i f i e d .
4. The Division o r consumer can ask t h a t a c i t a t i o n be i s s u e d within
f i v e days f o r u n s a t i s f a c t o r y performance by the d e a l e r or
manufacturer.
A t any point the consumer can terminate t h e process by s i g n i n g a form s t a t i n g
t h a t s a t i s f a c t o r y r e p a i r s had been made.
* See Appendix V
To make the public aware of its existence the D i v i s i o n ' s complaint process was
w r i t t e n up i n one of Arizona's Mobile Home newspapers. F u r t h e r , manufacturers
of : nobile homes a r e required by t h e U. S. Department of Housing and Urban
3evelopment ( HUD) t o prepare a consumer manual and include a list of S t a t e
Administrative Agencies ( SAA's) which a r e r e s p o n s i b l e f o r handling consmer
coxplaints.* While t h e s e p r a c t i c e s a r e notable a v a i l a b l e evidence i n d i c a t e s
the need f o r a d d i t i o n a l procedures.
A survey by the O f f i c e o f the Auditor General of conslmers who f i l e d complaints
with t h e Division i n d i c a t e d t h a t 48 percent had d i f f i c u l t y i n l e a r n i n g where t o
r e g i s t e r t h e i r complaints. Further a n a l y s i s revealed t h a t 50 percent of the
n o b i l e home complainants and 45 percent of the r e c r e a t i o n a l vehicle
complainants d i d n o t know where t o f i l e t h e i r complaints**. By way of
c o n t r a s t , a survey of consumers who f i l e d complaints with t h e R e g i s t r a r of
C o n t r a c t o r ' s O f f i c e revealed t h a t only 13 percent had d i f f i c u l t y i n determining
where t o r e g i s t e r t h e i r complaint.
From January 1, 1978, t o December 31, 1978, t h e D i v i s i o n r e c e i v e d 536
c o x p l a i n t s on mobile homes, r e c r e a t i o n a l v e h i c l e s , and f a c t o r y b u i l t
builnings. However, t h e Better Business Bureau ( BBB) received ten t o 12
complaints per month on mobile homes. The BBB, upon receiving a complaint on a
mobile home, u s u a l l y contacts the d e a l e r or manufacturer t o d i s c u s s t h e matter.
It is the p o l i c y o f the BBB t o attempt t o resolve complaints a g a i n s t d e a l e r s or
manufacturers on t h e i r own and not t o pass complaints on t o governmental
agencies. The BBB does not inform consumers of t h e D i v i s i o n ' s e x i s t e n c e u n l e s s
they s r e s p e c i f i c a l l y asked t o i d e n t i f y other sources o f a s s i s t a n c e .
Therefore, during 1978 the Division did not r e c e i v e at l e a s t 20 t o 25 percent
of consumer complaints f i l e d regarding mobile homes i n Arizona.
* It should be noted t h a t some manufacturers explain i n t h e i r consumer
aanuals t h a t the SAA's can provide a s s i s t a n c e i f a problem a r i s e s with a
mobile home. However, other manufacturers simply list the SAAs but do not
explain t h e i r purpose. Appendix V I I I is an example of one manufacturer's
l i s t i n g of SAAs t h a t is void of any explanation of the SAA's purpose.
** See Appendix V I I .
Methods For Improving
Public P a r t i c i p a t i o n
M r . E r n e s t G e l l h o r n , former Dean of Arizona S t a t e University College of Law and
a recognized a u t h o r i t y on a d m i n i s t r a t i v e procedure law, has formulated
recommendations f o r improving the F e d e r a l A d m i n i s t r a t i v e Procedures Act. Many
of these recommended a c t i o n s a r e equally a p p l i c a b l e t o s t a t e r e g u l a t o r y bodies.
According t o : 4r. Gellhorn*:
" 1 . Agency o b l i g a t i o n s . Minimum c o n s t i t u t i o n a l
requirements a r e i n s u f f i c i e n t reasons f o r agencies t o
f a i l t o explore a p p r o p r i a t e procedures f o r providing
e f f e c t i v e n o t i c e t o t h e a f f e c t e d public. ( Emphasis
added)
2. Meeting public n o t i c e needs. Agencies should be
required t o provide i d e n t i f i e d , a c c e s s i b l e sources of
information about proceedings i n which public
p a r t i c i p a t i o n is p o s s i b l e .... A t a minimum, each
agency should:
a. S t r i v e t o provide n o t i c e as f a r i n advance of
the proceeding as p o s s i b l e ; and
b. Prepare a s e p a r a t e b u l l e t i n i s s u e d p e r i o d i c a l l y ,
i d e n t i f y i n g the proceeding and providing
r e l e v a n t information.
3. ' A t t r a c t i n g and focusing public a t t e n t i o n . The p u b l i c
can be made aware of important agency proceedings i n
many ways, such a s p r e s s r e l e a s e s t o news media;
requirements t h a t a p p l i c a n t s d i r e c t l y inform users;
s p e c i a l n o t i c e t o governmental bodies, c i t i z e n groups
o r t r a d e a s s o c i a t i o n s ; and s e p a r a t e agency l i s t i n g s
o f s i g n i f i c a n t matters.
Coverage i n the news media is perhaps the most
e f f e c t i v e way of reaching the average c i t i z e n , and
p u b l i c i n t e r e s t groups and agencies should make
s p e c i a l e f f o r t s t o encourage r e p o r t i n g of t h e i r
a c t i v i t i e s . Factual p r e s s r e l e a s e s w r i t t e n i n l a y
language should explain t h e s i g n i f i c a n c e o f t h e
proceedings and t h e o p p o r t u n i t i e s f o r public
p a r t i c i p a t i o n . Releases describing important
proceedings with a l o c a l geographical impact should
be s e n t t o a r e a news media. I n major m a t t e r s ,
agencies might consider p u b l i c s e r v i c e advertisements
and announcements over l o c a l broadcasting f a c i l i t i e s .
Direct mailings a r e yet another a l t e r n a t i v e . "
( Emphasis added)
* Techniques of Public Involvement, S t a t e Planning S e r i e s 11, Council of
S t a t e Planning agencies, pp 12- 13. T h i s s t a t e m e n t is a summary of
C e l l h o r n ' s a r t i c l e , Itpublic P a r t i c i p a t i o n i n A d q i n i s t r a t i v e Proceedings,"
Yale Law J o u r n a l , Volume 81, No. 3 ( January 1972) pp 398- 401.
In August 1975 the then Attorney General, Bruce E. B a b b i t t , f u r t h e r amplified
t h e s e i d e a s i n a memorandum t o a l l s t a t e agencies. Forms of p u b l i c n o t i c e
discussed were: a
1. Newspaper P u b l i c a t i o n s
I n many cases, n o t i c e of meetings can be disseminated by providing press
r e l e a s e s t o newspapers published i n t h e a r e a i n which n o t i c e is t o be
given. I n a d d i t i o n , paid l e g a l n o t i c e s i n such newspapers may be ( I
purchased by t h e governing body.
2. Mailing L i s t
Some bodies may wish t o provide a mailing list whereby persons d e s i r i n g t o ( I
o b t a i n n o t i c e s of meetings may ask t o be placed on a mailing list. A l l
n o t i c e s of meetings issued w i l l then be mailed t o those appearing on the
c u r r e n t m a i l i n g list.
3. A r t i c l e s or Notices i n P r o f e s s i o n a l o r Business P u b l i c a t i o n s
I n a d d i t i o n , the governing body may o b t a i n p u b l i c a t i o n o f a r t i c l e s or
n o t i c e s i n those p r o f e s s i o n a l and business p u b l i c a t i o n s r e l a t i n g t o the
agency's f i e l d of r e g u l a t i o n . ( I
The Office of the Auditor General contacted s e v e r a l t e l e v i s i o n and radio
s t a t i o n s and determined t h a t these s t a t i o n s were w i l l i n g t o air public s e r v i c e
announcements f o r a s t a t e agency providing t h a t : a
1. The agency p r e p a r e a s t a t e m e n t e x p l a i n i n g t h e purpose of the message
and a s s u r e t h e s t a t i o n t h a t the message is from a nonprofit
organization; and
2. The agency prepare t h e announcement ( t h a t is, type the s c r i p t of the ( I
announcement).
Another a l t e r n a t i v e would be f o r the Division t o send a l e t t e r t o each
pi~ rchaser of a new mobile home, r e c r e a t i o n a l v e h i c l e , o r factory b u i l t a
building. The l e t t e r could convey two ideas:
1. Inform t h e owner t h a t s e r v i c e requirements be d i r e c t e d t o the
d e a l e r f i r s t and the manufacturer secondarily i f the d e a l e r f a i l s t o
respond s a t i s f a c t o r i l y .
2. I f within one year a f t e r purchase, n e i t h e r t h e d e a l e r nor t h e
manufacturer responds s a t i s f a c t o r i l y t o a s e r v i c e requirement, then a
formal complaint may be f i l e d with t h e D i v i s i o n o f Nobile and
Manufactured Housing Standards.
Approximately 20,000 new mobile homes, r e c r e a t i o n a l v e h i c l e s , and f a c t o r y
b u i l t buildings were s o l d i n Arizona i n the 1978 c a l e n d a r y e a r . Assuming a
l e t t e r was s e n t t o each of the 20,000 new owners and was d i s t r i b u t e d through
bulk mail the cost would be $ 4,800 d e t a i l e d as follows:
Type and s t u f f l e t t e r
Postage
Paper and envelopes
Total
CONCLUSION
Many purchasers of new mobile homes, r e c r e a t i o n a l v e h i c l e s , and f a c t o r y b u i l t
buildings do not know t h a t t h e Division through its complaint review process
can help t o r e c t i f y s e r v i c e problems.
RECOMMENDATION
To make the public more aware of its complaint review process the Division
should consider t h e following options:
a. Contact the Arizona media and arrange f o r a s e r i e s of p u b l i c s e r v i c e
announcements.
b. Prepare and d i s t r i b u t e a l e t t e r t o purchasers of new mobile homes,
r e c r e a t i o n a l v e h i c l e s , and f a c t o r y b u i l t buildings informing them of
t h e D i v i s i o n ' s complaint review process.
FINDING I V
THE DIVISION NEEDS TO ESTABLISH STANDARDS FOR TRAVEL TRAILERS USED AS PERMANENT
RESIDENCES.
Arizona Revised S t a t u t e s 32- 1172.20 s t a t e s : lllRecreational vehicles1 means a
vehicular type u n i t primarily designed a s a temporary l i v i n g q u a r t e r s f o r
r e c r e a t i o n a l , camping or t r a v e l use which is not designed f o r permanent
residence* or commercial purposes." It appears, however, t h a t vehicles
designed f o r use as temporary residences a r e being used as permanent residences*
and t h a t no performance or c o n s t r u c t i o n standards e x i s t i n Arizona f o r such
v e h i c l e s .
One type of t r a v e l t r a i l e r t h a t is used as a permanent residence is the park
model. Visits t o s e v e r a l mobile home parks i n Maricopa County by the Office of
the Auditor General revealed t h a t t r a v e l t r a i l e r s , e s p e c i a l l y park models, a r e
being used as permanent residences." The personnel from the D i v i s i o n o f Mobile
and Manufactured Housing Standards have a l s o observed numerous mobile home
parks where park models a r e used as permanent residences*. Mr. Gene Deaton,
former inspector and supervisor of complaints at the Division of Mobile and
Manufactured Housing, s t a t e d :
" There is no c o n s t r u c t i o n performance required from the
s t a t e f o r park models. Park models do not have smoke
d e t e c t o r s , tie- downs t o p r o t e c t a g a i n s t s t r o n g winds or
s p e c i a l f i r e - r e s i s t a n t s p e c i f i c a t i o n s . "
Table 2 d e t a i l s the d i f f e r e n c e s between the ANSI 501C Code used f o r park
models, and HUD r e g u l a t i o n s used f o r mobile homes.
* The O f f i c e o f the Auditor General defined permanent residences as u n i t s
t h a t were used s i x months or longer i n one l o c a t i o n .
TABLE 2
U . S. HOUSING AND URBAN DEVELOPMENT STANDARDS
FOR MOBILE HOMES NOT REQUIRED ON TRAVEL
TRAILERS BY ANSI 501C CODE
Required of
Travel
T r a i l e r s
Requirement By ANSI 501C
Furnace and water h e a t e r
compartments must have
walls and c e i l i n g s made
o f m a t e r i a l s with a f i r e
spread r a t i n g of 25
F i r e p r o t e c t a n t m a t e r i a l
with a flame spread of
50 on back wall and
bottom of cupboards f o r
s i x inches on e i t h e r
s i d e o f range
A t l e a s t one smoke
d e t e c t o r is required
Tie- downs a r e required
Lumber used must be
a s p e c i f i e d s p e c i e s
S p e c i f i c methods of
r e s t r e n g t h e n i n g
s t r u c t u r a l members
is required
Required of
Mobile Homes
By HUD
Regulation P o t e n t i a l E f f e c t
Yes
Yes
Yes
Yes
Yes
Yes
F i r e w i l l spread more
quickly throughout the
u n i t i f t h e r e is not a
s p e c i a l p r o t e c t a n t
F i r e w i l l spread more
quickly on cupboards i f ( I
t h e r e is not a s p e c i a l
p r o t e c t a n t .
Occupantsmaynot be 6
a l e r t e d of f i r e i n time
t o escape s a f e l y
Unit may t i p over i n
case of s t r o n g winds
( I
Walls, f l o o r s , or
c e i l i n g s may not be
s t r o n g enough
Floors, c e i l i n g s or
walls may l o s e t h e i r a
s t r e n g t h once a
s t r u c t u r a l member has
been c u t for wiring,
l i g h t s and bathtubs
The use of t r a v e l t r a i l e r s a s permanent r e s i d e n c e s occurs i n o t h e r p a r t s of
the c o u n t r y b e s i d e s Arizona, u s u a l l y i n t h e sun- belt s t a t e s . Buck Jones, who
is with the D i v i s i o n o f Motor Vehicles i n F l o r i d a , s t a t e s :
" Travel trailers a r e a l s o used a s permanent r e s i d e n c e s i n
F l o r i d a . One park has 1500 spaces t h a t use t r a v e l t r a i l e r s
as permanent r e s i d e n c e s . O v e r a l l though, we don't know
how many people use t r a v e l t r a i l e r s a s permanent
r e s i d e n c e s i n F l o r i d a . "
Regarding park models, John Stanton, Vice- President, Recreation Vehicle
I n d u s t r y Association s t a t e d :
" . . . p a r k models need s p e c i a l c o n s i d e r a t i o n ... they a r e not
a r e c r e a t i o n v e h i c l e o r a mobile home, but a r e a s p e c i a l
product meeting a s p e c i a l market need ... they a r e b u i l t
with t h e i n t e n t i o n of providing a temporary residence.
Park models a r e a c l a s s of t h e i r own. They f i l l a void
t h a t mobile homes cannot f i l l . They a r e e a s i l y towable by
a l i g h t - d u t y t r u c k , whereas mobile homes have t o be towed
by l a r g e t r u c k s . Also, mobile homes r e q u i r e a s p e c i a l
towing permit whereas park models do not.
A mobile home is more permanent i n n a t u r e than a park
model. For t h e s e reasons a park model fills t h e needs of a
s p e c i a l p a r t of s o c i e t y ; people who need m o b i l i t y . There
a r e people who need mobility because of t h e i r occupation
o r f o r use a s a summer o r winter r e s o r t .
I . . . s u g g e s t t h a t they be t r e a t e d as a unique product with
t h e i r own s e t of s t a n d a r d s ; d e f i n i t e l y a d i f f e r e n t kind of
standards than what p r e s e n t l y r e g u l a t e s r e c r e a t i o n
v e h i c l e s . Because of t h e i r use, I can see a f a r g r e a t e r
need f o r t h e i r r e g u l a t i o n than I can f o r r e c r e a t i o n
v e h i c l e s . However, i f anyone attempted t o c o n s t r u c t them
according t o conventional or mobile home building codes,
t h e n t h e y no longer would be l i g h t enough t o be towed, nor
could they meet t h e c o n f i g u r a t i o n s necessary and d e s i r e d
by the segment of t h e market t o which they p r e s e n t l y
appeal.
" . . . t h e Recreation Vehicle Industry Association is i n the
process of developing a standard f o r park models t o t a l l y
separate from recreation vehicle standards... I can
understand the need f o r maintaining inspections of mobile
homes as required by federal law. I also recognize t h a t it
may be necessary t o develop an inspection program for park
models i n the i n t e r e s t of the s a f e t y of Arizona
c i t i z e n s . . . . "
CONCLUSION
Recreational vehicles which a r e designed t o be used as temporary l i v i n g
quarters are being used as permanent residences i n Arizona. However,
no performance or construction standards e x i s t i n Arizona f o r r e c r e a t i o n a l ( I
vehicles being used a s permanent residences.
The Board e s t a b l i s h performance or construction standards for r e c r e a t i o n a l
vehicles being used as permanent residences.
OTHER PERTINENT INFORMATION
THE FOLiOTrlING IFIFORMATION IS PERTINENT TO IN- PLANT INSPECTIONS OF RECREATIONAL
VEHICLE AND FACTORY BUILT BUILDING MANUFACTURERS PERFORMED BY THE DIVISION OF
MOBILE A? JD MANUFACTURED HOUSING STANDARDS.
I n s p e c t o r s from the Division of Mobile and Manufactured Housing Standards
inspect p l a n t s l o c a t e d i n Arizona, other s t a t e s and Canada t h a t manufacture
r e c r e a t i o n a l vehicles and f a c t o r y b u i l t b u i l d i n g s .
auring c a l e n d a r y e a r 1978 Division i n s p e c t o r s t r a v e l e d t o 14 other s t a t e s and
Canada i n order t o perform i n s p e c t i o n s o f p l a n t s used t o manufacture e i t h e r
r e c r e a t i o n a l vehicles or f a c t o r y b u i l t b u i l d i n g s .
Recreational Vehicle I n s p e c t i o n s
I n J u l y 1977, the Division r e i n s t i t u t e d in- plant i n s p e c t i o n s f o r r e c r e a t i o n a l
v e h i c l e s . Recreational v e h i c l e s i n c l u d e t r a v e l t r a i l e r s , motor homes, camping
t r a i l e r s , c h a s s i s mount u n i t s , van conversions and cab- over campers. An in-p
l a n t i n s p e c t i o n o f a r e c r e a t i o n a l vehicle manufacturer c o n s i s t s of:
1. A review of the manufacturer's q u a l i t y c o n t r o l manual, plans and
s p e c i f i c a t i o n s ;
2. The observation o f t h e manufacturer's t e s t o f g a s , water and
e l e c t r i c a l systems on one f i n i s h e d u n i t ;
3. An examination of a p p l i a n c e p a n e l s , c o n v e r t e r s , l i g h t s and wiring t o
determine approvals from a n a t i o n a l t e s t i n g o r l i s t i n g agency;
4. I n s p e c t i o n o f a l l u n i t s f o r e l e c t r i c a l , plumbing, water o r gas l i n e s
and appliances;
5. Check a t l e a s t one f i n i s h e d u n i t with an approval t a g a f f i x e d ; and,
6. A write- up of any non- conformances t o American National Standards
I n s t i t u t e ( ANSI) 501C Code, and the manufactuerls q u a l i t y c o n t r o l
manual, plans and s p e c i f i c a t i o n s .
The purpose of t h e r e c r e a t i o n a l v e h i c l e i n s p e c t i o n s is t o protect the consuner
of such products.
During 1978, the Division conducted 142 in- plant i n s p e c t i o n s i n Arizona and 242
in- plant i n s p e c t i o n s i n 13 other s t a t e s and Canada f o r r e c r e a t i o n a l vehicle
manufacturers.
Table 3 summarizes the s t a t e s t h a t had i n - s t a t e i n s p e c t i o n programs f o r
r e c r e a t i o n vehicles and t h e e x t e n t t o which s t a t e s had o u t - o f - s t a t e i n s p e c t i o n
programs during 1978.
Lozat ~ o n >;$ t. t::. e
11:- Plant Ir:; pcct l o x ;
-- V~; re- P-- e r, r- o- r n-- t! -. l. - .-
BR IZONA
California
Indiana
Kansas *
Michigan
Iowa
Pennsylvania
Texas
Alabama
Ohio
Idaho
Oregon
Tennessee
Georgia
Missouri
Washington
Utah
Colorado
Oklahorna
Mississippi
Florida
Kentucky
Montana
Wyoming
Nebraska
Minnesota
Wisconsin
. I l l i n o i s
: Jew York
North Carolina
Canada
West Germany
Total Out- of- State Inspections
iri- State
! 1i: iii1) 2t ion Progr- arn
Yes
Yes
No
Yes
No
No
No
No
No
No
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
No
No
Yes
Yes
Yes
No
Yes
No
No
No
No
No
SUI~ UIAIIY OF STATICS WITII 1N- STA'TE INSPEC I'ION
PROGRAMS FOR RECREATIONAL VEHICLES AND THE
EXTENT ' TO WHICH STArES HAD OUT- OF- STATE
INSPECTION PROGIIAMS DUtIIllG 1978
- - --- - -- - S. t a t e s Perforrni- n e In-- Pl-. a - n - t - - I n ~ > e c t i o n s
ARIZONA Colorado- U - L k - n t u k y m g Nebraska Florida Kansas*
liirnber. of S t a t e s
Per- forming Slmllar
in- Plant Inspectioris
* Kansas S t a t e Legislature terminated in- plant inspections, design approvals and i n s i g n i a s for r e c r e a t i o n a l vehicles on April 13, 1979.
A s shown i n Table 3, Arizona was one of only 14 s t a t e s t h a t performed i n - s t a t e
i n s p e c t i o n s f o r r e c r e a t i o n a l vehicles and one of only e i g h t s t a t e s t h a t
performed o u t - o f - s t a t e i n s p e c t i o n s during 1978. I n a d d i t i o n , each of the
s t a t e s v i s i t e d by Arizona i n s p e c t o r s d u r i n g 1978 was a l s o v i s i t e d by i n s p e c t o r s
froa a t l e a s t t h r e e o t h e r s t a t e s while Michigan was v i s i t e d by i n s p e c t o r s from
seven other s t a t e s . I n 1978, manufacturers i n Michigan received a minimum of
14 i n s p e c t i o n s . ( See Appendix I)
Recreational vehicle manufacturers i n C a l i f o r n i a shipped more
r e c r e a t i o n a l vehicles t o Arizona d e a l e r s than any other s t a t e ( See Table 5)
C a l i f o r n i a i n s p e c t o r s i n s p e c t 75 percent or more of t h e r e c r e a t i o n a l vehicles
manufacturered i n C a l i f o r n i a t h a t r e c e i v e C a l i f o r n i a i n s i g n i a s . Arizona
i n s p e c t o r s t r a v e l e d t o 87 r e c r e a t i o n a l vehicle p l a n t s i n C a l i f o r n i a from
January 1 , 1978 t o March 1, 1979 t o perform i n s p e c t i o n s s i m i l a r t o those
performed by the C a l i f o r n i a i n s p e c t o r s . According t o one r e c r e a t i o n a l vehicle
manufacturer i n C a l i f o r n i a , i n s p e c t o r s from Arizona, C a l i f o r n i a and Colorado
were i n h i s p l a n t Ifon the same day and the same time and looked a t the same
u n i t s .
Factory B u i l t Buildings
I n July 1977, the Division r e i n s t i t u t e d i n - p l a n t i n s p e c t i o n s f o r f a c t o r y b u i l t
buildings. An in- plant i n s p e c t i o n o f a f a c t o r y b u i l t building manufacturer
c o n s i s t s o f :
1. A review of the manufacturer's q u a l i t y c o n t r o l manual, plans and
s p e c i f i c a t i o n s ;
2. Examination of u n i t s 1 c o n s t r u c t i o n ;
3. Observation of the manufacturer's t e s t f o r gas and pluqbing;
. 4. Review of components f o r n a t i o n a l t e s t i n g approvals; and
5. Write- up of any non- conformances from q u a l i t y c o n t r o l manual, plans,
s p e c i f i c a t i o n s and i n d u s t r y s t a n d a r d s . I n d u s t r y s t a n d a r d s f o r the
most p a r t a r e t h e Uniform Building Code ( UBC), Uniform Plumbing Code
( UPC) , National E l e c t r i c a l Code ( NEC) , and the Uniform Mechanical
Code ( UMC).
The purpose of t h e f a c t o r y b u i l t building i n s p e c t i o n is t o p r o t e c t t h e consumer
of such products.
During 1978, the Division conducted 123 i n - p l a n t i n s p e c t i o n s i n Arizona and 12
in- plant i n s p e c t i o n s i n f i v e other s t a t e s . Table 4 summarizes t h e s t a t e s t h a t
received in- plant i n s p e c t i o n s from Arizona, t h e s t a t e s t h a t shipped u n i t s i n t o
Arizona i n 1978 and the other s t a t e s t h a t performed i n s p e c t i o n s i n those
s t a t e s .
TABLE 4
STATES THAT SHIP FACTORY BUILT BUILDINGS
TO ARIZONA AND RECEIVE IN- PLANT INSPECTIONS
FROM AilIZONA AND OTHER STATES DURING 1978
L o c a l i t i e s Where S t a t e s That
In- Plant I n s p e c t i o n s Shipped Units S t a t e s Performing In- Plant Inspections
Were Performed I n t o Arizona ARIZONA C a l i f o r n i a Idaho Colorado Nebraska Ohio
C a l i f o r n i a X X X
Kansas X
Iowa X X
New Nexico X X
Texas X X
Utah X X X
A s shown i n Table 4, each of the s t a t e s , except Texas, v i s i t e d by Arizona
i n s p e c t o r s during 1978 was a l s o v i s i t e d by i n s p e c t o r s from a t l e a s t one other
s t a t e . I n a d d i t i o n t o Arizona, 15 s t a t e s perform i n - s t a t e i n s p e c t i o n s and 22
s t a t e s perform o u t - o f - s t a t e i n s p e c t i o n s o f f a c t o r y b u i l t building
manufacturers. ( Appendix 11)
It should be noted t h a t t h i r d - p a r t y i n s p e c t o r s * i n s p e c t 25 percent or more of
t h e f a c t o r y b u i l t buildings t h a t have C a l i f o r n i a i n s i g n i a s a f f i x e d t o them.
Division i n s p e c t o r s v i s i t e d t h r e e p l a n t s i n C a l i f o r n i a during 1978 t o perform
i n s p e c t i o n s .
* I n s p e c t o r s such as those employed by p r i v a t e e n g i n e e r i n g f i r m s t h a t a r e
c e r t i f i e d by the s t a t e t o conduct i n s p e c t i o n s on behalf of the s t a t e .
Out- of- State Shipments
To Arizona
During 1978, 7,098 r e c r e a t i o n a l vehicles were shipped t o Arizona d e a l e r s from
manufacturers l o c a t e d o u t s i d e of Arizona. Department i n s p e c t o r s v i s i t e d 14
s t a t e s and Canada during 1978 t o perform i n - p l a n t i n s p e c t i o n s . However, 11 of
these o u t - o f - s t a t e l o c a l i t i e s , including Canada, t h a t were v i s i t e d by Division
i n s p e c t o r s accounted f o r l e s s than 16 percent of the r e c r e a t i o n a l vehicles
shipped t o Arizona d e a l e r s during 1978. F u r t h e r , t h r e e o f t h e s e o u t - o f - s t a t e
l o c a l i t i e s v i s i t e d ( Georgia, Missouri and Canada) did not s h i p any r e c r e a t i o n a l
vehicles t o Arizona during 1978.
Table 5 summarizes the l o c a l i t i e s t h a t shipped r e c r e a t i o n a l vehicles t o Arizona
and the l o c a l i t i e s inspected by Division i n s p e c t o r s during 1978.
TABLE 5
SUMMARY OF THE LOCALITIES THAT SHIPPED
RECREATIONAL VEHICLES TO ARIZONA AND
THE LOCALITIES INSPECTED BY DIVISION
INSPECTORS DURING 1978
Number o f U n i t s
Shipped t o
Out- of- State L o c a l i t i e s Arizona
Percentage of
Units Shipped
t o Arizona
V i s i t e d By D i v i s i o n I n s p e c t o r s :
C a l i f o r n i a
Indiana
Kansas
M i chigzn
Iowa
Pennsylvania
Texas
Alabama
Ohio
Idaho
Oregon
Tennessee
Georgia
Missouri
Canada
Total Shipments I n S t a t e s V i s i t e d
Not Visited By D i v i s i o n I n s p e c t o r s :
Oklahoma 45
Wyoming 29
Washington 2 0
Minnesota 16
Utah 15
Colorado 7
Total Shipaents i n S t a t e s Not Visited 132
Total Shipments
A s shown i n Table 5 C a l i f o r n i a shipped t h e most number ( 4,128) of r e c r e a t i o n a l
vehicles t o Arizona during 1978, and accounted f o r more than 58 percent of
t o t a l r e c r e a t i o n a l vehicle imports. Iowa, Pennsylvania, Texas, Alabama, Ohio,
Idaho, Oregon, Tennessee, Georgia, Missouri and Canada combined accounted f o r
only 15.93 percent of t o t a l 1978 r e c r e a t i o n a l vehicle imports.
Approximately 87 percent of t h e r e c r e a t i o n a l vehicles shipped t o Arizona
d e a l e r s i n 1978 were from o u t - o f - s t a t e manufacturers while approximately h a l f
of t h e f a c t o r y b u i l t buildings came from o u t - o f - s t a t e manufacturers. ( See
Appendix 111) Division i n s p e c t o r s v i s i t o u t - o f - s t a t e manufacturing p l a n t s
very i n f r e q u e n t l y and i n s p e c t very few u n i t s when they do v i s i t a p l a n t .
The D i v i s i o n ' s p o l i c y is t o perform one i n s p e c t i o n per year f o r o u t - o f - s t a t e
manufacturers of r e c r e a t i o n a l v e h i c l e s . For f a c t o r y b u i l t buildings t h e number
of o u t - o f - s t a t e i n s p e c t i o n s v a r i e d from none t o four during 1978%. According
t o Professor Arthur Dean**:
" One v i s i t p e r y e a r p e r manufacturer is n o t adequate t o
i n s u r e t h e r e l i a b i l i t y of d a t a obtained from i n s p e c t i o n .
To r e l y on the r e s u l t s of the i n - p l a n t i n s p e c t i o n r e p o r t s a
minimum of 15 samples ( v i s i t s ) p e r y e a r per manufacturer
a r e necessary. I d e a l l y 25 t o 30 samples per year should be
made t o i n s u r e a high degree of r e l i a b i l i t y . "
* Appendix I11 contains a l i s t i n g of the o u t - o f - s t a t e f a c t o r y b u i l t building
manufacturers inspected during 1978.
** Associate Professor of Engineering, Arizona S t a t e University; B. A.,
M. S., Texas Tech University; PH. D., Texas A & M University.
An i n t e r n a l report prepared by t h e Division of Building Codes ( now the Division
of Mobile and Manufactured Housing Standards) i n f i s c a l year 1976- 77 addressed
o u t - o f - s t a t e i n s p e c t i o n s and states, i n p a r t :
" . . . a l l the i n s p e c t o r is accomplishing by i n s p e c t i n g t h e
p l a n t is i n s u r i n g t h a t t h e p l a n t is following t h e i r
approved q u a l i t y c o n t r o l procedures. I n no way a r e they
i n s u r i n g t h a t u n i t s coming i n t o t h i s s t a t e a r e b u i l t t o
code a s most times they do not even i n s p e c t any u n i t s which
a r e being s e t ( s i c ) t o Arizona."
Number Of Consumer C o m ~ l a i n t s
During 1978, the D i v i s i o n r e c e i v e d 22 consumer complaints regarding
r e c r e a t i o n a l vehicles and one consumer complaint regarding f a c t o r y b u i l t
buildings. Table 6, compares the number of consumer complaints f i l e d with the
Division f o r mobile homes, r e c r e a t i o n a l vehicles and f a c t o r y b u i l t buildings.
TABLE 6
SUMMARY OF CONSUMER COMPLAINTS
REGARDING RECREATION VEHICLES,
FACTORY BUILT BUILDINGS AND
MOBILE HOMES FILED WITH THE
DIVISION DURING 1978
Type of
Consumer Complaints
F i l e d
Recreational Vehicles
Factory B u i l t Buildings
Mobile Homes
Ratio of Complaints
F i l e d t o Number of
Units Shipped** t o
Number Arizona Dealers
F i l e d During 1978
2 2 .2703
1 .0834
513 5.3599%
* Estimate based upon the number of Housing and Urban Development l a b e l s
issued t o manufacturers t h a t shipped u n i t s t o Arizona d e a l e r s during 1978.
** Units shipped a r e comprised of u n i t s manufactured i n Arizona t h a t a r e
f i r s t placed i n Arizona and u n i t s manufactured o u t - o f - s t a t e t h a t a r e f i r s t
placed i n Arizona.
As shown i n Table 6 the r a t i o of consuner complaints t o u n i t s shipped t o
Arizona d e a l e r s during 1978 was 20 and 64 times g r e a t e r f o r mobile homes than
for r e c r e a t i o n a l vehicles and f a c t o r y b u i l t b u i l d i n g s , r e s p e c t i v e l y .
Severity Of Consumer Complaints
And I?- Plant I n s p e c t i o n V i o l a t i o n s
Consuner camplaints and in- plant i n s p e c t i o n v i o l a t i o n s regarding r e c r e a t i o n a l
vehicles and f a c t o r y b u i l t buildings were categorized i n t o t h e following
groups :
Imminent Safety Hazards - hazards t h a t present an imminent and
unreasonable r i s k o f d e a t h o r severe personal i n j u r y t h a t may o r may not
be r e l a t e d t o f a i l u r e t o comply with a s a f e t y s t a n d a r d . Examples a r e
l i q u i d petroleum gas tank explosion, broken gas l i n e s and c u t t i r e s ( from
low f r o n t end).
Serious Defects - any f a i l u r e t o comply with an a p p l i c a b l e s a f e t y standard
t h a t renders the u n i t o r any p a r t t h e r e o f n o t f i t f o r t h e ordinary use f o r
which it was intended and which r e s u l t s i n an unreasonable r i s k o f i n j u r y
or death t o occupants of t h e u n i t . Examples i n c l u d e g a s hose leaks and
. improper wiring t o A/ C supply.
Defects - any f a i l u r e t o comply with an a p p l i c a b l e s a f e t y standard t h a t
renders the u n i t o r any p a r t o r component thereof not f i t f o r the ordinary
use f o r which it was i n t e n d e d , b u t does not r e s u l t i n an unreasonable r i s k
of i n j u r y or death t o occupants of t h e u n i t . Examples include window
l e a k s , and bad t a s t e and ordor i n water.
Non- Compliances - a f a i l u r e t o comply w i t h a n i n s p e c t i o n standard t h a t
does not c o n s t i t u t e a d e f e c t , s e r i o u s d e f e c t o r imminent s a f e t y hazard
such a s cosmetic d e f e c t s . Examples include loose t r i m or molding, 110
v o l t wire i n s t o r a g e a r e a c l o s e t not concealed, and problems with drapes.
An a n a i y s i s of the 23 consumer complaints regarding r e c r e a t i o n a l v e h i c l e s and
f a c t o r y b u i l t buildings t h a t were f i l e d v i t h the D i v i s i o n d u r i n g 1978 revealed
t h a t 59 s p e c i f i c d e f e c t s were noted on the 23 complaints. I n a d d i t i o n , a
sampling of in- plant i n s p e c t i o n r e p o r t s prepared by Division personnel,
revealed t h a t no i n s t a n c e s o f imninent s a f e t y hazards were reported. See Table
7 for a d e t a i l e d a n a l y s i s of problems from complaints and a sampling of in-p
l a n t i n s p e c t i o n v i o l a t i o n s .
TABLE 7
SUMMARY OF A SAMPLING OF 1978- 79 IN- PLANT INSPECTION
VIOLATIONS AND ALL 1978 COMPLAINTS ON RECREATIONAL
VEHICLES AND FACTORY BUILT BUILDINGS PROCESSED BY THE DIVISION
RECREATIONAL VEHICLES
Sampling of In- Plant
Inspection Violations% Problems from Complaints
Degree of Seriousness May 1978 t o February 1979 January 1978 t o December 1978 ( I
Number Percent Number Percent
Imminent Safety Hazard 0 0 %
Serious Defect 2 1 2 1
Defect 4 7 4 6
Non- Compliance 33 3
Total
FACTORY BUILT BUILDINGS
Sampling of In- Plant
Inspection Violations** Problems from Complaints
Degree of Seriousness May 1978 t o April 1979 January 1978 t o December 1978
Number Percent
Imminent Safety Hazard 0 0%
Serious Defect 0 0
Defect
Non- Compliance
Total
Number Percent
* Twenty- nine percent of t h e r e p o r t s examined showed no v i o l a t i o n s , while 71
percent showed one o r more v i o l a t i o n s .
** Thirty- seven percent of t h e r e p o r t s examined showed no v i o l a t i o n s , 19
percent showed no production t o inspect and 44 percent had one o r more
v i o l a t i o n s .
O e c e r t i f i c a t i o n Of P l a n t s
I n 1978, the Division conducted 384 r e c r e a t i o n a l vehicle in- plant i n s p e c t i o n s
i n approximately 175 p l a n t s and 135 f a c t o r y b u i l t building i n s p e c t i o n s i n 19
p l a n t s .
During 1978, 18 r e c r e a t i o n a l vehicle manufacturers were d e c e r t i f i e d because of
s e r i o u s and/ or numerous v i o l a t i o n s of t h e ANSI 501C Code, manufacturer's
q u a l i t y control o r Division r u l e s and r e g u l a t i o n s noted during an in- plant
i n s p e c t i o n . No f a c t o r y b u i l t building manufacturers were d e c e r t i f i e d i n 1978.
When a plant is d e c e r t i f i e d t h e i n s p e c t o r c o n f i s c a t e s a l l Arizona i n s i g n i a s i n
t h e manufacturer's possession preventing t h e manufacture from shipping u n i t s
l e g a l l y t o Arizona. The plant may be r e c e r t i f i e d by requesting and passing a
follow- up i n s p e c t i o n by t h e Division. Upon r e c e r t i f i c a t i o n the manufacturer is
issued a new supply o f i n s i g n i a s .
Costs Of The Program
Manufacturers pay t h e Division $ 20 per hour plus t r a v e l and per diem f o r in-p
l a n t i n s p e c t i o n s . Each u n i t placed i n Arizona must have an Arizona i n s i g n i a
affyxed t o it which c o s t s $ 15 each. Manufacturers plans and s p e c i f i c a t i o n s
must a l s o be approved by t h e Division f o r a fee.
The D i v i s i o n ' s estimated cost f o r in- plant i n s p e c t i o n s of r e c r e a t i o n a l
vehicles and f a c t o r y b u i l t buildings is $ 78,000 p e r y e a r . The cost of these
i n s p e c t i o n s is i n i t i a l l y paid by t h e r e c r e a t i o n a l v e h i c l e and f a c t o r y b u i l t
building manufacturers but is u l t i m a t e l y passed t o the purchasers of these
u n i t s .
THE FOLLOWING INFORMATION IS PERTINENT TO THE POSSIBLE CONSOLIDATION OF THE 4
DIVISION OF MOBILE AND MANUFACTURED HOUSING STANDARDS WITHIN THE OFFICE OF THE
REGISTRAR OF CONTRACTORS.
Governor Bruce Babbitt's opening message t o the first regular session of the ( I
thirty- fourth l e g i s l a t u r e contained the following statement:
" I a l s o am proposing l e g i s l a t i o n t o consolidate the
authority of the Division of Mobile and Manufactured
Housing Standards i n the Office o f the Registrar of
Contractors.
The present s i t u a t i o n does not provide f o r clear l i n e s of
authority or r e s p o n s i b i l i t y . This proposal w i l l
streamline the administration and oversight o f t h i s
important function."
In addition, ARS 32- 1177( B) s t a t e s :
" The r e g i s t r a r and the d i r e c t o r s h a l l , by mutual
agreement, provide f o r the sharing o f professional and
c l e r i c a l support personnel, e l e c t r o n i c data processing
time and communications, equipment and o f f i c e space for
the purpose of e f f e c t i v e and e f f i c i e n t management of the
operations o f t h i s a r t i c l e . "
However, as of June 30, 1979 there was no sharing of equipment, supplies or ( I
o f f i c e space between the Division and the Registrar and sharing of professional
and c l e r i c a l s t a f f e x i s t s only i n examinations f o r dealers and mobile home
i n s t a l l e r s .
30th the Division and the R e g i s t r a r perform many o f t h e same functions for
t h e i r r e s p e c t i v e i n d u s t r i e s which include:
1 . Processing complaints
2. Conducting hearings
3. Requiring examinations f o r t r a d e and business
4 . Canducking i n v e s t i g a t i o n s
5. Administering l i c e n s e s
5. Accounting f o r f i n a n c i a l t r a n s a c t i o n s and budgets
For both the Division and the R e g i s t r a r s i m i l a r t e c h n i c a l knowledge is needed
i n such a r e a s as s t r u c t u r e , plumbing and e l e c t r i c i t y .
Both the Division and t h e R e g i s t r a r adhere t o the same codes f o r f a c t o r y b u i l t
b l ~ i l d i n g s and s i t e b u i l t homes which include:
1 . Uniform Building Code ( UBC)
2. Uniform Plumbing Code ( UPC)
3. National E l e c t r i c a l Code ( NEC)
The advantages of combining the Division and the R e g i s t r a r include:
- 1 . Such a combination would eliminate confused l i n e s of a u t h o r i t y t h a t
e x i s t between the Division and the R e g i s t r a r .
2. Consumer confusion as t o where t o f i l e a complaint would be reduced.
3. The Division Hearing O f f i c e r could be used more e f f i c i e n t l y .
Currently the caseload f o r the Division Hearing O f f i c e r is only one
half of t h a t f o r one of the R e g i s t r a r ' s Hearing O f f i c e r s .
4. The R e g i s t r a r has s i x f i e l d o f f i c e s o u t s i d e of Phoenix l o c a t e d around
the s t a t e . The f i e l d o f f i c e s could help the Division i n handling
complaints and i n q u i r i e s a t various l o c a l i t i e s . F i e l d o f f i c e s could
a l s o a i d t h e implementation of the D i v i s i o n ' s mobile home set- up
program.
It should be noted, however, t h a t t h e r e is strong opposition from the
manufactured housing i n d u s t r y a g a i n s t combining the Division and the
R e g i s t r a r . For example, Sonny Rickles, Executive Director of the Manufactured #
Housing Association of Arizona s t a t e d :
" Big b u i l d e r s i n s i t e - b u i l t homes would have g r e a t e r
influence on the R e g i s t r a r .
S i t e - b u i l t homes and manufactured housing a r e two
competing i n d u s t r i e s . In as much as ' s t i c k - b u i l t 1 homes
a r e already i n t h e R e g i s t r a r ' s o f f i c e , we would be i n
t r o u b l e because we are the new guy on t h e block. The
Manufactured Housing Industry is a competitor of s t i c k -
b u i l t homes and we should not have t o c o n t r i b u t e t o an
agency t h a t is dominated by our competitors. To do s o
would cause us t o cut our own t h r o a t s with our own
d o l l a r s .
Norm Andrus, Director of Engineering f o r Roker I n d u s t r i e s , s t a t e d :
" H i s t o r i c a l l y , the mobile and factory b u i l t homes have
been competitors of the ' s t i c k - b u i l t 1 homes. Both types
of builders compete f o r the general p u b l i c ' s business.
The Manufactured Housing Industry has been the leading
producer of low c o s t housing.
There would be pressures from the s t i c k - b u i l t industry t o
have the manufactured housing industry adopt t h e i r high
c o s t p r a c t i c e s . An example is t h e f a c t t h a t Tempe r e q u i r e s
a licensed e l e c t r i c i a n t o hook up the e l e c t r i c a l s e r v i c e
t o a t r a i l e r at a c o s t of $ 150 t o $ 200 t o the consumer.
Appeals t o the five- man E l e c t r i c a l Board of Tempe and the
Registrar o f C o n t r a c t o r s brought no change i n the
requirement. Mesa only r e q u i r e s an i n s t a l l e r licensed by
the Division t o perform such a task."
It should a l s o be noted t h a t the disadvantages of combining the Division and a
the Registrar include:
1. The Division of Mobile and Manufactured Housing Standards has a Board
t h a t promulgates r u l e s and r e g u l a t i o n s whereas the Registrar does
not. a
The Registrar of Contractors, Aaron Kizer, stated:
" 1 would be against combining the Division under the
Registrar unless the Mobile and Manufactured Housing
Standards Board was eliminated."
2. The Division and the Registrar must be knowledgeable of and adhere to
different construction codes. For example, mobile homes must adhere
to standards set by the U. S. Department of Housing and Urban
Development ( HUD), whereas, recreational vehicles must adhere to
standards set by the American National Standards Institute ( ANSI
501C Code).
3. The agencies are currently located at two separate physical
locations. Allocation of space would be a problem if the agencies
were combined into one of the two current locations.
STATE OF ARIZONA
D I V I S I O N OF MOBILE AND MANUFACTURED
HOUSING STANDARDS
PERFORMANCE AUDIT RESPONSE
October 19, 1979
Richard E. Wolfe
Director
James L. Bond
Assistant Director
D ' I DIVISION OF MOSILE AND MANUFACTURED
HOUSING STANDARDS STATE OF ARIZONA
1641 WEST JEFFERSON BRUCE BABBITT GOVERNOR
PHOENIX. ARIZONA 85007
( 602) 255- 4072 RICHARD E. WOLFE. DIRECTOR
B
I October 1 9 , 1979
TO: Mr. Douglas R. Norton, A u d i t o r G e n e r a l
FROM : blr . Richard E. Wolf e , D i r e c t o r , D i v i s i o n
of Modilbe and hfanufactured Housing S t a n d a r d s
SUBJECT: PERFORMANCE AUDIT RESPONSE
A thorough review has been made of t h e d r a f t r e p o r t of t h e
performance a u d i t conducted of t h e D i v i s i o n of M o b i l e a n d
Manufactured Housing S t a n d a r d s . Each Board member of t h e
D i v i s i o n w a s c o n t a c t e d i n d i v i d u a l l y and t h e i r r e s p o n s e t o
t h e d r a f t w a s s o l i c i t e d . The f o l l o w i n g is t h e c o n s e n s u s
r e s p o n s e of t h e D i v i s i o n and f o u r of t h e f i v e Board members
( Board Member Aaron Kizer h a s r e s p o n d e d i n d e p e n d e n t l y ) .
In t h e d r a f t r e p o r t , t h e A u d i t o r G e n e r a l h a s made f o u r
f i n d i n g s , c o n c l u s i o n s and recommendations. F o l l o w i n g t h a t
they have r e l a t e d " p e r t i n e n t i n f o r m a t i o n " . Our r e s p o n s e
w ~ l al d d r e s s each i s s u e s e p a r a t e l y and i n t h e same o r d e r .
A
D i r e c t o r B
FINDING I
The Auditor General recommends t h a t t h e l a w be amended to
e l i m i n a t e t h e use of t r u s t accounts and t h a t f u t u r e s a l e s
be p r o c e s s e d t h r o u g h a n escrow a g e n t . H e f u r t h e r recom-mends
t h a t bonds be i n c r e a s e d t o a l e v e l t h a t would p r o v i d e
adequate p r o t e c t i o n t o consumers.
The D i v i s i o n and four members of t h e Board d i s a g r e e t h a t
t h e law be changed t o r e q u i r e an escrow a g e n t or s e r v i c e .
This would i n c r e a s e t h e c o s t t o t h e consumer, and i n our
o p i n i o n , would o f f e r l i t t l e more p r o t e c t i o n t h a n t h e
e x i s t i n g t r u s t account r e q u i r e m e n t . T h e r e is no a s s u r a n c e
t h a t e a r n e s t monies being d e p o s i t e d by a customer o r buyer
is being put i n t o t h e escrow account. T h e r e f o r e , such a
change would s t i l l have t o be monitored by t h e D i v i s i o n t o
i n s u r e t h a t t h e consumer's money is being p r o t e c t e d .
We a l s o d i s a g r e e t h a t an i n c r e a s e i n bond l e v e l is needed.
I f t h e bonds w e r e t o be doubled from t h e i r e x i s t i n g l i m i t s ,
t h e r e still is i n a d e q u a t e p r o t e c t i o n f o r t h e buyer. I t
t a k e s only one o r two s i g n i f i c a n t claims t o l i q u i d a t e such
a bond.
In t h e a l t e r n a t i v e , t h e D i v i s i o n and t h e f o u r Board members
recommend t h a t a recovery fund be set up by s t a t u t e with
an i n i t i a l a p p r o p r i a t i o n and then an assessment a g a i n s t
each u n i t s o l d f o r its p e r p e t u a t i o n . This is a system t h a t
has proven e f f e c t i v e i n o t h e r j u r i s d i c t i o n s i n p r o t e c t i n g
b u y e r s . This p r o p o s a l h a s been submitted and r e c e i v e d
f a v o r a b l y by t h e i n d u s t r y and t h e D i v i s i o n is c u r r e n t l y
o b t a i n i n g i n f o r m a t i o n from o t h e r j u r i s d i c t i o n s i n p r e p a r a -
t i o n of d r a f t i n g proposed l e g i s l a t i o n .
The D i v i s i o n h a s a l r e a d y implemented i n c r e a s e d a u d i t s of
t h e e x i s t i n g t r u s t accounts t o i n s u r e compliance t o t h e
law. I t is t h e D i v i s i o n s i n t e n t t o v i g o r o u s l y e n f o r c e
t h o s e s t a t u t e s and recommend a p r o s e c u t i o n f o r t h o s e c a s e s
t h a t evidence c r i m i n a l conduct.
I t is our recommendation t h a t t h e e x i s t i n g t r u s t account
s t a t u t e s , r u l e s and r e g u l a t i o n s , be l e f t a s w r i t t e n .
FINDING I1
The A u d i t o r General makes f o u r recommendations:
A. The Board e s t a b l i s h a r u l e o r r e g u l a t i o n t o conduct
i n v e s t i g a t i o n on r e c e i p t o f a s p e c i f i e d e x c e s s i v e
number of v e r i f i e d c o m p l a i n t s .
B. The D i r e c t o r a f t e r n o t i c e and a h e a r i n g suspend o r
r e v o k e a l i c e n s e based upon a f i n d i n g t h a t a l i c e n s e e
h a s r e c e i v e d a n e x c e s s i v e number of v e r i f i e d com-p
l a i n t s .
C. The s t a t u t e s be amended t o p r o v i d e f o r i n t e r v e n t i o n
of c i v i l p e n a l t i e s by c o u r t i f t h e l i c e n s e e commits
c e r t a i n acts o r o m i s s i o n s s u c h as a n a c c u m u l a t i o n
o f e x c e s s i v e c o m p l a i n t s .
D. The D i v i s i o n c o n t i n u e t o develop s t r o n g program t o
r e g u l a t e t h e i n s t a l l a t i o n of mobile homes.
I n r e f e r e n c e t o recommendation A., t h e D i v i s i o n and f o u r
members of t h e Board a g r e e t h a t such a r u l e is p o s s i b l e
but t h a t it s h o u l d not s p e c l f i y t h e s p e c i f i c number of
v e r i f i e d c o m p l a i n t s upon which t o b a s e an i n v e s t i g a t i o n .
E x p e r i e n c e has shown t h a t t h e number of c o m p l a i n t s is not
t h e i s s u e , but r a t h e r t h e t y p e of complaint t h a t is b e i n g
made. By way of f u r t h e r e x p l a n a t i o n , i f a m a n u f a c t u r e r
h a s r e c e i v e d a l a r g e number of s o - c a l l e d " cosmetic" t y p e
c o m p l a i n t s , t h e n t h e D i v i s i o n should not have t o t a r g e t
t h a t m a n u f a c t u r e r f o r i n v e s t i g a t i o n i n l i e u of t a k i n g a
h a r d l o o k at a m a n u f a c t u r e r who has one o r two c o m p l a i n t s
t h a t are s a f e t y r e l a t e d o r hazardous i n n a t u r e .
In r e s p o n s e t o recommendation B. Again, t h e D i r e c t o r and
t h e f o u r members of t h e Board do not a g r e e t h a t t h e mere
f a c t t h a t a l i c e n s e e has r e c e i v e d an e x c e s s i v e number of
c o m p l a i n t s would be grounds f o r a s u s p e n s i o n o r r e v o c a t i o n
o f a l i c e n s e . Each complaint should be a n a l y z e d on its
own merits and a p p r o p r i a t e a c t i o n t a k e n .
In r e s p o n s e t o recommendation C . , t h e D i v i s i o n and f o u r
members of t h e Board have no o b j e c t i o n t o such an amend-ment
to t h e s t a t u t e s ; b u t , a g a i n , t h e same argument would
be r a . i s e d a s t o s e t t i n g s p e c i f i c numbers of c o m p l a i n t s as
a b a s i s f o r a c t i o n .
The D i v i s i o n and f o u r members of t h e Board concur with
recommendation D. The D i v i s i o n has an ongoing program
in which we a r e e n t e r i n g i n t o Intergovenmental Agreements
with l o c a l j u r i s d i c t i o n s pursuant t o law t o i s s u e permits
and i n s p e c t t h e i n s t a l l a t i o n of mobile homes s t a t e w i d e .
Experience with t h e p r o c e s s i n g of consumer complaints has
shown t h a t a v e r y h i g h i n c i d e n c e of complaints a r e r e l a t e d
d i r e c t l y o r i n d i r e c t l y t o t h e i n s t a l l a t i o n of mobile
homes. Experience by o t h e r s t a t e s who have implemented
s i m i l a r i n s t a l l a t i o n i n s p e c t i o n programs have shown t h a t
t h e s e complaints can be s i g n i f i c a n t l y reduced. The
D i v i s i o n ' s o b j e c t i o n a s t o t h e implementation of t h e
i n s t a l l a t i o n s e c t i o n program would be approximately t h e
e a r l y f a l l of 1980, i f t h e budget r e q u e s t is approved t o
implement t h e S t a t e ' s i n s p e c t i o n p o r t i o n of t h e program.
FINDING I11
The A u d i t o r G e n e r a l recommends t h a t t h e p u b l i c b e made
more aware o f t h e D i v i s i o n ' s complaint review p r o c e s s and
toward t h a t end c o n t a c t t h e Arizona media and a r r a n g e f o r
a series of p u b l i c s e r v i c e announcements, and i n a d d i t i o n
d i s t r i b u t e a l e t t e r t o p u r c h a s e r s of new homes, r e c r e a t i o n a l
v e h i c l e s and f a c t o r y - b u i l t b u i l d i n g s informing them of t h e
D i v i s i o n ' s complaint review p r o c e s s .
The D i v i s i o n and f o u r Board members a g r e e t h a t a program
is needed t o a d v i s e t h e consumers of t h e D i v i s i o n ' s p r e s e n c e
and complaint h a n d l i n g a b i l i t y . I t is our i n t e n t i o n t o
have p u b l i c s e r v i c e t a p e s p r e p a r e d f o r d i s t r i b u t i o n t o
r a d i o s t a t i o n s a s p u b l i c s e r v i c e announcements and t o
p r e p a r e news r e l e a s e s f o r d i s t r i b u t i o n t o t h e l o c a l news-papers
and t r a d e p a p e r s .
The D i v i s i o n d i s a g r e e s with t h e p r o p o s a l of t h e d i s t r i -
b u t i o n of l e t t e r s t o p u r c h a s e r s of mobile homes, recrea-t
i o n a l v e h i c l e s and f a c t o r y - b u i l t b u i l d i n g s a s it would
i n v o l v e a c o n s i d e r a b l e o u t l a y of funds p l u s would i n v o l v e
an ongoing program t h a t would t i e up p e r s o n n e l and f u t u r e
funding.
The D i v i s i o n and f o u r Board members w i l l be proposing a
r u l e r e q u i r i n g such a n o t i f i c a t i o n form be made p a r t of
t h e purchase package t h a t is given t o buyers by t h e d e a l e r s .
The D i v i s i o n would f u r n i s h t h e d e a l e r s a two- part n o t i f i -
c a t i o n o r d i s c l o s u r e form t h a t would ask t h e consumer t o
f i l l out and r e t u r n one p o r t i o n t o t h e D i v i s i o n t o a s s u r e
n o t i f i c a t i o n .
I t should be noted t h a t t h i s Finding would i n a l l p r o b a b i l i t y
g e n e r a t e a much g r e a t e r number of complaints while Finding I1
of t h e Auditor G e n e r a l ' s r e p o r t is proposing a system t o
d e c r e a s e t h e number of c o m p l a i n t s . Obviously i f both pro-grams
a r e implemented, t h e workload i n t h e Complaint and
I n v e s t i g a t i o n Bureau would be i n c r e a s e d along with t h e
number of h e a r i n g s .
FINDING I V
The Auditor General recommends t h a t t h e Board e s t a b l i s h
performance o r c o n s t r u c t i o n s t a n d a r d s f o r r e c r e a t i o n a l
v e h i c l e s b e i n g u s e d a s permanent r e s i d e n c e s .
The D i v i s i o n and f o u r Board members a g r e e with t h e f i n d i n g s
of t h e Auditor General i n t h a t t h e r e does e x i s t t h e problem
i n t h e a r e a of t h o s e r e c r e a t i o n a l v e h i c l e s t h a t commonly
a r e r e f e r r e d t o as " park models". These a r e t h e l a r g e r
camping t r a i l e r s t h a t a segment of t h e community is u s i n g
a s permanent l i v i n g q u a r t e r s when i n f a c t they were not
designed t o be used a s such when manufactured. The Depart-ment
of Housing and Urban Development, who r e g u l a t e s t h e
s t a n d a r d s f o r t h e c o n s t r u c t i o n of mobile homes, has recog-nized
t h i s problem and is c u r r e n t l y involved i n f i n d i n g
s o l u t i o n s f o r t h e problem.
The D i v i s i o n is h e a v i l y involved i n working with HUD, t h e
i n d u s t r y , and i n d u s t r y a s s o c i a t i o n s t o work out a s o l u t i o n
t o t h e problem t h a t t h i s r e c r e a t i o n a l v e h i c l e r a i s e s .
The recommendation of t h e A u d i t o r G e n e r a l has m e r i t ; but
such a p r o p o s a l , a s it r e l a t e s t o c o n s t r u c t i o n s t a n d a r d s ,
would r e q u i r e a c o n s i d e r a b l e amount of t i m e and funds f o r
s t u d i e s t o d e t e r m i n e a n s w e r s t o t h e enumerable q u e s t i o n s
t h a t w i l l a r i s e when t h i s i s s u e is f a c e d . C u r r e n t l y , t h e r e
a r e no s t a n d a r d s i n t h e c o u n t r y t h a t can be u t i l i z e d f o r
t h i s purpose and t h e D i v i s i o n under its p r e s e n t s t a t u t e
is not a u t h o r i z e d t o set such s t a n d a r d s .
The D i v i s i o n and f o u r Board members would recommend t h a t
i f a s o l u t i o n is not forthcoming from HUD and t h e i n d u s t r y
t h a t we t r y t o approach t h e problems i n terms of s e t t i n g
performance s t a n d a r d s on t h o s e p a r t i c u l a r u n i t s r e f e r r e d
t o a s " park modelst1 once t h i s p a r t i c u l a r segment is segre-gated
from t h e rest of t h e r e c r e a t i o n a l v e h i c l e models.
OTHER PERTINENT INFORhlATION
The A u d i t o r G e n e r a l a d d r e s s e s t h e i s s u e of t h e i n - S t a t e
and o u t - o f - S t a t e p l a n t i n s p e c t i o n s of t h e m a n u f a c t u r e r s
of r e c r e a t i o n a l v e h i c l e s and f a c t o r y - b u i l t b u i l d i n g s .
The D i v i s i o n and f o u r Board members b e l i e v e t h a t t h e
h e a l t h and s a f e t y of t h e c i t i z e n s of t h e S t a t e of Arizona
who p u r c h a s e t h e v a r i o u s t y p e s of r e c r e a t i o n a l v e h i c l e s
and who elect t o make t h e i r r e s i d e n c e i n a f a c t o r y - b u i l t
b u i l d i n g w i l l s u f f e r i f t h e S t a t e of Arizona elects to
d i s b a n d its i n s p e c t i o n program. T h i s S t a t e is p r o v i n g to
be one of t h e f a s t e s t growing m a r k e t s f o r r e c r e a t i o n a l
v e h i c l e s and a l t e r n a t i v e h o u s i n g s u c h as f a c t o r y - b u i l t
b u i l d i n g s , and we b e l i e v e t h a t i n c r e a s e d i n s p e c t i o n s , n o t
d e c r e a s e d , is i n o r d e r . I t s h o u l d be n o t e d t h a t a l l
t h i r t e e n s t a t e s c o n t a c t e d i n d i c a t e d t h a t i n - p l a n t
i n s p e c t i o n s a r e n e c e s s a r y .
The A u d i t o r G e n e r a l ' s r e p o r t i n f e r r e d t h a t t h e D i v i s i o n
d u p l i c a t e s i n s p e c t i o n work of o t h e r states i n t h o s e
manufacturing p l a n t s . Our s u r v e y i n d i c a t e d t h a t no o t h e r
s t a t e i n s p e c t e d t h o s e u n i t s o r v e h i c l e s , t o A r i z o n a ' s
appro\- ed p l a n s , d e s t i n e d f o r sale i n A r i z o n a .
The D i v i s i o n i n t h e p a s t h a s a t t e m p t e d to set up reci-p
r o c i t y f o r i n s p e c t i o n s w i t h o t h e r s t a t e s , b u t t h e p r o p o s a l
f a i l e d due t o t h e i n c o n s i s t e n c y i n i n s p e c t i o n p r o c e d u r e s
by t h o s e s t a t e s i n v o l v e d . T h e r e f o r e , t h e D i v i s i o n and
t h e f o u r Board members d o n o t b e l i e v e , based on p r i o r
e x p e r i e n c e , t h a t we can r e l y on o t h e r j u r i s d i c t i o n s con-d
u c ~ i n gi n s p e c t i o n s a c c e p t a b l e t o our i n s p e c t i o n s t a n d a r d s .
It should be noted i n s u p p o r t of t h i s t h a t t h e D i v i s i o n
d e c e r t i f i e d e i g h t e e n ( 1 8 ) r e c r e a t i o n a l v e h i c l e m a n u f a c t u r e r s
i n c a l e n d a r y e a r 1978 f o r f a i l i n g t o meet t h e i r Arizona
appro\- ed p l a n s and q u a l i t y a s s u r a n c e program. A list of
t h o s e m a n u f a c t u r e r s and a sunmary of t h e p r o b l e m s f o u n d
d u r i n g i n s p e c t i o n is a t t a c h e d t o t h i s r e p o r t f o r r e f e r e n c e .
In 211 of t h e s e c a s e s c i t e d , t h e p l a n t s had a p p a r e n t l y ,
a c c o r d i n g t o t h e A u d i t o r G e n e r a l ' s s u r v e y and t a b l e s had
been i n s p e c t e d by o t h e r s t a t e s .
The r e p o r t f u r t h e r states t h a t one v i s i t per y e a r per rnanu-f
a c t u r i t r is not a d e q u a t e t o i n s u r e t h e r e l i a b i l i t y of d a t a
o b t a l n e d from t h e i n s p e c t i o n .
The D i v i s i o n and t h e f o u r Board members a g r e e t h a t once- a-year
i n s p e c t i o n is not a d e q u a t e and i n f a c t h a s r e q u e s t e d
i n its 1980- 81 budget a d d i t i o n a l f u n d i n g t o a l l o w f o u r
i n s p e c t i o n s p e r y e a r which is i n l i n e w i t h t h o s e states
surveyed who conduct o u t - o f - s t a t e i n s p e c t i o n s .
In r e s p o n s e t o t h a t area of t h e r e p o r t t h a t a d d r e s s e s t h e
c o m p l a i n t s a g a i n s t r e c r e a t i o n a l v e h i c l e s , t h e D i v i s i o n and
t h e f o u r Board members wish t o r e p l y as f o l l o w s . The
A u d i t o r G e n e r a l ' s f i g u r e s are m i s l e a d i n g i n t h a t one must
r e c o g n i z e a d i f f e r e n c e i n u s a g e between t h e mobile home
and t h e r e c r e a t i o n a l v e h i c l e . A m o b i l e home is u t i l i z e d
f o r year- round permanent r e s i d e n c y , as i n a c o n v e n t i o n a l
home, whereas t h e t y p i c a l r e c r e a t i o n a l v e h i c l e is used f o r
very s h o r t u s a g e o f d a y s r a t h e r t h a n y e a r s i n l e n g t h .
T h i s f a c t a l o n e would d i c t a t e t h a t a m o b i l e home w i l l be
t h e s u b j e c t of a c o n s i d e r a b l y p r o p o r t i o n a t e l a r g e r number
of c o m p l a i n t s . I n a d d i t i o n , t h e p u r c h a s e r of a r e c r e a t i o n a l
v e h i c l e can be compared i n many r e s p e c t s t o t h e p u r c h a s e r
of an automobile i n t h a t when c o m p l a i n t s o r problems a r e
e n c o u n t e r e d , t h e p u r c h a s e r would n o r m a l l y r e t u r n t h e u n i t
t o t h e d e a l e r where it is r e p a i r e d . T h i s is not t r u e w i t h
t h e p u r c h a s e r of a mobile home who l o o k s t o a d e a l e r t h a t
is t r a d i t i o n a l l y not set up t o h a n d l e c o m p l a i n t s a s a d e a l e r
of automobiles o r r e c r e a t i o n a l v e h i c l e s would b e . The r e s u l t
is t h a t t h e consumer comes t o t h e S t a t e f o r h e l p . To u t i l i z e
such a survey a s t h e A u d i t o r G e n e r a l is r e l y i n g upon, it
should have been made of random p u r c h a s e r s of r e c r e a t i o n a l
v e h i c l e s r a t h e r t h a n o n l y t h o s e who f i n a l l y complained t o
t h e D i v i s i o n .
The Auditor General has a l s o p o i n t e d o u t t h a t t h e S t a t e
d i s c o n t i n u e t h e i n - p l a n t i n s p e c t i o n of f a c t o r y - b u i l t b u i l d i n g s
by i n f e r r i n g t h a t t h e r e was a d u p l i c a t i o n of e f f o r t as o t h e r
s t a t e s a l s o i n s p e c t t h e s e p l a n t s . The D i v i s i o n i n c o n t a c t i n g
t h o s e s t a t e s i n v o l v e d i n f a c t o r y - b u i l t b u i l d i n g i n s p e c t i o n
programs determined t h a t t h e y were not i n s p e c t i n g t h o s e u n i t s
being shipped t o Arizona. They o n l y i n s p e c t t h o s e u n i t s
going t o t h e i r own p a r t i c u l a r s t a t e . I n f a c t t h e state s h i p -
ping t h e l a r g e s t amount of f a c t o r y - b u i l t b u i l d i n g s t o A r i z o n a ,
t h e S t a t e of Texas, h a s no i n s p e c t i o n program w h a t e v e r . I t
s h o u l d b e noted t h a t f a c t o r y - b u i l t b u i l d i n g s c o n s t r u c t e d f o r
placement i n Arizona are d e s i g n e d t o t h e Uniform B u i l d i n g
Code, which r e q u i r e s r i g i d i n s p e c t i o n s of such u n i t s . I t is
obvious t o t h i s D i v i s i o n and t h e f o u r Board members t h a t we
s e r v e b a s i c a l l y t h e same purpose as t h e l o c a l b u i l d i n g in-s
p e c t o r s s e r v e t o t h e c o n v e n t i o n a l housing i n d u s t r y . I f we
p u l l out of t h i s program, t h e p u b l i c w i l l be r e c e i v i n g a
home with no i n s p e c t i o n whatever. Once t h e u n i t is con-s
t r u c t e d and d e l i v e r e d t h e r e is no way it c a n t h e n be
i n s p e c t e d by l o c a l enforcement o f f i c i a l s a s a l l c o n s t r u c t i o n
and systems a r e hidden from view.
This concludes t h e D i v i s i o n and f o u r Board members' response
t o t h e i s s u e of i n - S t a t e and o u t - o f - S t a t e i n s p e c t i o n of
r e c r e a t i o n a l v e h i c l e and f a c t o r y - b u i l t b u i l d i n g manufac-t
u r e r s .
The Auditor G e n e r a l ' s r e p o r t d i s c u s s e s t h e p o s s i b l e con-s
o l i d a t i o n of t h e D i v i s i o n o f Mobile and Manufactured
Housing S t a n d a r d s w i t h i n t h e O f f i c e of t h e R e g i s t r a r of
C o n t r a c t o r s . The D i v i s i o n and f o u r members of t h e Board
oppose such a merger. Obviously t h e r e would be no c o s t
s a v i n g s i n such a merger a s t h e R e g i s t r a r of C o n t r a c t o r s
would be r e q u i r e d t o h i r e a d d i t i o n a l p e r s o n n e l t o p i c k up
t h e f u n c t i o n s of t h i s D i v i s i o n . I t would a l s o n e c e s s i t a t e
a c o n s i d e r a b l e i n c r e a s e f o r space f o r such p e r s o n n e l .
The r e p o r t s t a t e s t h a t t h e r e is a d u p l i c a t i o n of e f f o r t i n
t h a t t h e r e a r e s i x f u n c t i o n s which t h e two a g e n c i e s perform
t h a t a r e s i m i l a r . I t should be noted t h a t t h e s e l i s t e d s i x
f u n c t i o n s a r e a l s o conducted by each and every r e g u l a t o r y
agency in S t a t e government t o t h e b e s t of our knowledge.
The statement t h a t t h e D i v i s i o n ' s Hearing O f f i c e r workload
is one- half t h a t of t h e R e g i s t r a r is m i s l e a d i n g i n t h a t
the R e g i s t r a r ' s case load is f a r above what can be p r o p e r l y
handled. Our c a s e load is i n c r e a s i n g monthly along with
t h e i n c r e a s e i n consumer c o m p l a i n t s and is c u r r e n t l y a t a
f u l l case load l e v e l .
The statement t h a t t h e r e is consumer c o n f u s i o n a s t o where
t o f i l e a complaint is n o t s u p p o r t e d by t h e D i v i s i o n com-p
l a i n t r e c o r d s . The m a j o r i t y of c o m p l a i n t s t h a t a r e r e f e r -
red t o t h e D i v i s i o n from o t h e r S t a t e a g e n c i e s a r e from t h e
Consumer P r o t e c t i o n D i v i s i o n of t h e Attorney General and
t h e Pima County A t t o r n e y ' s O f f i c e . The proposed p u b l i c
r e l a t i o n s program t h a t t h e D i v i s i o n w i l l implement should
e l i m i n a t e any such problem i f it e x i s t s .
I t is t h e p o s i t i o n of t h e D i v i s i o n and t h e four members of
the Board, and t h e i n d u s t r y w e r e g u l a t e . t h a t t h i s D i v i s i o n
should not be d i c t a t e d t o by an agency t h a t s e r v e s a
c o m p e t i t i v e i n d u s t r y . The s i m i l a r i t i e s between t h e two
a g e n c i e s a r e very s l i g h t i n t h a t t h i s D i v i s i o n s e r v e s an
i n s p e c t i o n and r e g u l a t o r y f u n c t i o n whereas t h e R e g i s t r a r
of C o n t r a c t o r s has no i n s p e c t i o n enforcement. The D i v i s i o n
is a l s o t h e S t a t e a u t h o r i z e d agent under t h e HUD Program
f o r mobile homes, which was a very d i f f i c u l t c e r t i f i c a t i o n
t o r e c e i v e . The D i v i s i o n would oppose p u t t i n g t h e c e r t i f i -
c a t i o n in jeopardy by merging with a n o t h e r agency and
having t o submit t o t h e lengthy and c o s t l y p r o c e s s a g a i n .
It is t h e i n t e n t i o n of t h e D i v i s i o n and t h e e n t i r e Board
t o r e q u e s t t h e l e g i s l a t i o n be enacted t o d e l e t e t h o s e por-t
i o n s of t h e e x i s t i n g s t a t u t e s t h a t a s s o c i a t e t h e D i v i s i o n
with t h e R e g i s t r a r ' s o f f i c e . In a l l r e s p e c t s , t h e D i v i s i o n
has been o p e r a t i n g a s a s e p a r a t e e n t i t y with its own
budget s i n c e enactment of t h e p r e s e n t s t a t u t e and i n c e p t i o n
of t h e D i v i s i o n of Building Codes i n September 1972 and it
is f e l t t h a t a c l a r i f i c a t i o n is needed.
This concludes our response t o t h e performance a u d i t of
t h e D i v i s i o n of Mobile and hlanufactured Housing S t a n d a r d s
by t h e O f f i c e of t h e Auditor General and r e f l e c t s t h e
thoughts of t h e D i r e c t o r of t h e D i v i s i o n , Richard E . Wolfe,
t h e Chairman of t h e Board, Howard A . S h i f f , and Board
! Iembers, Donald E . Armstrong, George P i e r s o l , and
Leonard Sobel.
In c l o s i n g I would l i k e t o thank t h e Auditor General and
h i s s t a f f , p a r t i c u l a r l y Dwight A. Ochocki, f o r t h e s p i r i t
of c o o p e r a t i o n t h e y have d i s p l a y e d i n t h e i r c o n t a c t s with
t h i s D i v i s i o n i n t h e p r e p a r a t i o n of t h e r e p o r t .
I) 11 DIVISIONO F M 0 ' 3 1A~ N~ D MANUFACTURED
HOUSINGS TANDARDS STATE OF ARIZONA
I615 WEST JEFFERSON BRUCE BABBITT GOVERNOR
PHOENIX. ARIZONA 85007
( 602) 255- 4072 RICHARD E. WOLFE. DIRECTOR
October 12, 1979
A. Reason for decertification: Number of violations and severity of electrical violations.
D Examples: 1. Not grounding connector.
2. No ground clamps on receptacles and switches.
3. No ground splices.
4. Metal J boxes not grounded.
llPossible electrical shock hazard."
B. Reason for decertification: Number of violations and severity of violations.
Examples: 1. Improper electrical testing of complete electrical system.
2. blicrowave oven on wrong circuit, not to approved plans.
3. Nonqetallic electric cable in generator compartment.
4. No separation of 12 volt and 110 circuits.
5. Not complying to Q. A. manual.
" Possible shorting of electrical system and overheating of electrical system."
C. Reason for decertification: Not following Q. A. manual and plan approval; number
of violations and seriousness of violations.
Examples: 1. Not. using proper wire size for ground.
2. Not properly securing wires.
3. Converter not properly grounded.
4. Converter not installed to manufacturer specifications.
5. Refrigerator compartment not sealed to inside of units.
" Possible electrical shock hazard and possible asphyxiation or gas explosion."
D. Reason for decertification: Not complying to approved plans and no approved plans
for some systems.
Exmples: 1. LPG tank below frame on rear of units.
2. Refrigerator compartment not sealed to inside of units.
3. Converter not grounded.
4 . Generator not grounded.
5. Receptacles facing up on counter tops.
" Possible electrical shock, possible asphyxiation and gas explosion."
October 12, 1979
E. Reason for decertification: Not following approved Q. A. manual and plan approval; 4
numerous violations.
Examples: 1. Not connecting A/ C as required by plans.
2. Drain venting not to approved plans.
3. Not properly grounding J boxes/ receptacles.
" Possible electrical shock and possible severe gas leakage."
F. Reason for decertification: Serious electrical defects.
Examples: 1. Converter not grounded.
2. Wire not properly supported.
3. Not protecting wire from damage.
" Possible electrical shock."
G. Reason for decertification: Serious electrical problems.
Examples: 1. Not grounding converter.
2. Sot separating 110 and 12 volt wire.
3. Wire stripped too far, exposing underwire.
4. Not properly securing wire.
" Possible electrical hazard."
H. Reason for decertification: Not complying with plan approvals, Q. A. manual -
Serious electrical problems.
Examples: 1. Plumbing systems not installed to approved plans.
2. No plan approval for monitoring panel.
3. Q. C. manual not being signed at all stations.
4. Using wrong size wire for converter.
5. Converter not grounded.
6. 110 wiring not protected in storage areas.
7. Improper securing of wiring.
8. 110 and 12 volt wires not separated.
" Possible electrical shock and hazard."
1. Reason for decertification: Serious electrical violations.
Eu~ xples: 1. 110 volt wire exposed in outside storage.
2 . Converter not grounded.
3. 110 volt wire stripped, outside receptacle.
1. Crimped gas line.
5. Generator compartment not sealed.
6 . Gas line not secured.
7 . 110 and 12 volt not separated.
'' i:~. erc shock hazard, fire hazard, electrical short and overheating condition."
October 12, 1979
J. Reason for d e c e r t i f i c a t i o n : Numerous v i o l a t i o n s .
Examples: 1. Furnace on carpet.
2. Converter on carpet.
3. Converter not grounded.
4. Gas l i n e not secure.
5. 110 wire not protected under sink.
6 . Refrigeration compartment not vented properly.
7 . No plan approval for microwave.
8. Generator not grounded properly.
" Fire hazard, e l e c t r i c a l shock hazard"
D
K. Reason for d e c e r t i f i c a t i o n : Serious e l e c t r i c a l violation and venting v i o l a t i o n .
Examples: 1. Converter not grounded to specifications.
2. 110 wire not protected i n outside walls.
3. Metal J box not grounded.
4. Furnace on carpet.
5. Refrigeration compartment not sealed.
6. Wires s t r i p p e d o u t s i d e panel for generator.
7. Generator compartment not sealed.
8. 110 wire not protected in roof.
9. 110 and 12 v o l t wire not separated.
10. Converter mounted on carpet.
11. Refrigeration compartment not sealed.
" Possible e l e c t r i c a l shock and gas asphyxiation or explosion."
) L. Reason for d e c e r t i f i c a t i o n : Seriousness of v i o l a t i o n s .
Examples: 1. Refrigeration compartment not sealed.
2. J box not grounded.
" Possible e l e c t r i c a l shock and possible gas asphyxiation."
M. Reason for d e c e r t i f i c a t i o n : Seriousness of e l e c t r i c a l v i o l a t i o n s .
Examples: 1. 110 wire i n storage compartment.
2. Microwave c i r c u i t not to plan.
3 . No plan in plant for plumbing system.
" Possible shock hazard."
S- Reason f o r d e c e r t i f i c a t i o n : Seriousness of v i o l a t i o n s .
B Examples: 1. Clean out t r a p exposed in bedroom.
2. Converter not grounded t o specifications.
3. Cutout for box receptacle oversized, exposing combustible material.
" Possible e l e c t r i c a l shock and possible exposure to sewer gas."
October 12, 1979
0. Reason for decertification: No plans for 5th wheel models. Manufacturer only
manufactures 5th wheels.
P. Reason for decertification: Not complying with approved plans and Q. A. manual.
Examples: 1. Refrigeration not installed to manufacturer specifications.
2. Electrical receptacles not installed to plans.
3. Heating duct not installed to plans.
3. Not testing gas lines as required by Q. A. manual.
" Not building unit to standards."
Q. Reason for decertification: Not following Q. A. manual and numerous violations.
" Factory not building units to Arizona approved plans and pro~ edures.~~
R. Reason for decertification: Numerous violations, Q. A. manual not up- dated for
use and not following approved plans.
" Factory not building units to Arizona approved plans and procedures."
ERUCE BABBITT
GOVERNOR
AARON KlZER
REGISTRAR
181 8 17' EST < DAMS
PHOENIX, ARIZONA 85W7
( 6 0 2 ) 255- 1 525
TUCSON OFFICE
415 WEST CONGRESS 85701
( 602) 882- 5378
Doug1 as R. Norton, Auditor General
112 N. Central Avenue, Suite 600
Phoenix, Arizona 85004
RE: Registrar's response to Auditor General's report on the Division
of Mobile and Manufactured Housing Standards
Dear Mr. Norton:
Having reviewed the draft of the Auditor General ' s report on the Di vi -
sion of Mobile and Manufactured Housing Standards, I will respond briefly
to each finding.
FINDING I
Rampant inflation has further weakened the Division's bonding
system, whose dollar amounts were too low to begin with. I t seems that
the Division should look for a1 ternatives to i t s present system such as
a recovery fund or the use of escrow accounts only.
FINDING I1
I t appears that both the Division and the Registrar have been too
lenient in allowing licenseesto accumulate in an inordinate number of
complaints prior to instituting disciplinary action. As with any pro-fession
or occupation, the mere issuance of the license i s no guarantee
that the licensee i s going to obey the law. Once a licensee indicates
by his track record that he i s unable or unwilling to follow the standards
of conduct that have been set by the S t a t e , t h a t license should be revoked
without delay and follow- up should be done to insure t h a t t h a t person does
not continue to work without a license. Dick Wolfe has a law enforcement
background and has already demonstrated a committment to stronger policing
of violations.
FINDING I11
I t i s clearly the responsibility of State agencies to act as public
information centers. Anything the Division can do to further this goal
shou 1 d be acti vely encouraged.
Page 2 - Audi tor General ' s report
FINDING IV
I was not aware of the problems involving travel trailers being
used as permanent residences. The Division should look into whether
construction standards should be establ i shed for recreational vehicles
being used as permanent residences.
OTHER PERTINENT INFORMATION
Whether the Division of Mobile and Manufactured Housing Standards
should be more completely combined with the Registrar of Contractors is
a perennial question about which I have a mixed reaction.
One factor cutting against consolidation is that the bulk of the
Division's work is in areas which are foreign to the Registrar of Con-tractor's
activities. The inspection and regulation of manufacturers
and dealers of the various units, as well as the HUD and ANSI code stan-dards,
are not dealt with by the Registrar's office, yet constitute a
majority of the Division's efforts.
Conversely, i t is clear that some duplication in administration,
licensing and policing could be reduced by a merger.
Even if the agencies are not combined, one area that more logically
would fall under the jurisdiction of the Registrar is the installation
of mobile homes. The Division is presently attempting to set up a state-wide
inspection program in this area. I t appears that the duplication
here would be even more pronounced since the Registrar already has a
statewide inspection program for construction compliance which is simi-lar
to the inspection of mobile home setups. Transferring this area of
responsibility to the Registrar's office may be worth considering whether
or not there i s a merger of the agencies. Another possibility is to pro-vide
for the sharing of inspectors in this area. For example, in those
outlying communities in which the Registrar presently has an inspector,
our inspector could be responsible for monitoring installation of mobile
homes. In areas where the Reg