New HUD Formaldehyde Rule and the Impact in Texas

On March 2, 2020, the manufactured housing industry will switch over to the 2020 version of the HUD-code.  The most significant updates are the changes to the federal Formaldehyde Notice provisions.

Manufacturers will be required to include on the homes’ data plate the following new language, “The manufacturer certifies this home is compliant with the Title VI, Toxic Substances Control Act.” (see 3280.5(i)).

In addition, the federal Formaldehyde Notice that was required in every home’s kitchen (countertop or exposed cabinet) has been eliminated.  Thus, the federal notice will no longer be required inside the home, other than the new single-sentence data plate disclosure.

However, in Texas things are a bit more complicated.

There is a Texas law that requires a Texas Formaldehyde Disclosure.  The natural question then is, “What happens to the Texas disclosure?” And, “Do the federal changes impact the obligation to provide consumers the Texas disclosure?”

The quick answer is the Texas disclosure will still be required.  Retailers must continue to provide consumers with the state promulgated Texas formaldehyde disclosure and maintain it in their files, subject to retailer audits by TDHCA, evidence that the consumer signed the Texas disclosure form prior to signing any purchase contracts.

History

To fully understand the Texas formaldehyde consumer disclosure requirements requires a bit of a history lesson. 

In the late 1970s and early 1980’s there were several lawsuits filed against members of the industry asserting health related claims based on exposure to formaldehyde in manufactured homes.

There were several Texas cases that went to trial and the industry members were able to prevail. 

However, it became evident that state action needed to be taken to clarify this area of law and liability.

The Texas legislature then passed a law change that required a manufacturer or retailer to provide to any prospective consumer, prior to signing any purchase contracts, a disclosure regarding the potential presence and effect formaldehyde may cause, as well as information on home ventilation.

The result of this state law was a new state promulgated notice requirement. Following the passage of this law change, no further formaldehyde related lawsuits resulted in adverse court rulings against Texas manufacturers or retailers.

Several years after Texas created the state law disclosure, HUD took notice and similarly adopted a federal disclosure requirement.  The federal disclosure in 3280.309 provided explicit language that had to be in the federal notice.  After this the Texas legislature again modified the Texas formaldehyde notice. 

Significantly, the Texas legislature did not do away with the Texas disclosure.  The law changes still deferred the specifics of the Texas disclosure to the executive director of the MH Division of TDHCA, but tied the Texas disclosure notice content to the new, at that time, HUD disclosure.  This was done for continuity and consistency purposes.

Thus, since the early 1980’s Texas manufactures included the federal HUD-code formaldehyde notice inside the homes, and the retailers were providing another Texas notice directly to a consumer to sign and date, prior to signing any contracts.

Texas Requirements Following March 2, 2020

First, Texas retailers will notice, following the March 2, 2020 effective date, the federal formaldehyde notice inside the kitchen of the homes will no longer be present.  Also, there will be a new sentence added to the home’s data plate.

However, the Texas law remains in effect, as does the state promulgated formaldehyde notice.  As such, retailers will still be required after March 2 to continue to provide the Texas promulgated formaldehyde notice to a consumer prior to signing any purchase contracts.

The net effect, in the near term, is what was previously required in two notices – 1) a posted federal notice in the kitchen; and 2) an acknowledged (evidenced by the consumers’ signatures and date) Texas notice – will be reduced to just the Texas notice.

For the longer term, TMHA will continue to work with our state regulators and the legislature, if necessary, to further refine this process moving forward.