PART 12 -- THE SETUP/INSTALLATION – SCAM

Probably one of the more egregious fictions promulgated by the Secretary is that the MHCSS Act of 1974, as enacted by the 93^rd Congress, did not give him the authority to regulate the setup/installation of manufactured homes. Under this premise, the Secretary has absolutely NO WAY of KNOWING (emphasis added) whether manufactured homes constructed under his jurisdiction will perform:

• “in such a manner that the public is protected against any unreasonable risk of the occurrence of accidents due to the design or construction of such manufactured home, or any unreasonable risk of death or injury to the user or to the public if such accidents do occur” (42 USCA §5402(8)).

• Parte quacumque integrante sublata, tollitur totum– When any essential part is removed, the whole is removed (or destroyed)

The setup/installation of a manufactured home was statutorily, and continues to be scientifically inseparable from the durability, quality, and safety (performance) of a manufactured home. The testimony before the 93^rd Congress made it not only overt that Congress was aware of this fact, but also that they were fully aware that setup/installation needed to be federally regulated under the MHCSS to achieve their objective.

The manufacturers had historically used setup/installation as a scapegoat, and continue to use it with the Secretary’s encouragement, to segregate themselves from their responsibility or liability for the performance (durability, quality, and safety), or more accurately, the lack thereof, of their products. Their reasons for doing this have always been purely driven by greed. For the Secretary, his reason for encouraging the manufacturers’ unconscionable practice is purely driven by self-serving ambition.

To debunk the Secretary’s fictional or fraudulent claim we begin with the definition of a “manufactured home” under the MHCSS Act.

“Manufactured home” means a structure, transportable in one or more sections, …which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation…when connected to the required utilities, and includes the plumbing, heating, air-conditioning, and electrical systems contained therein”… (42 USCA §5402(6))

Of paramount importance is, “designed to be used as a dwelling.” Designed by whom? Constructed by whom? - The manufacturer. Who will use such for a dwelling? – The first purchaser. In addition, what should be the ONLY thing a first purchaser needs do to use such as a dwelling? – They need only to connect it the required utilities – this sounds like the product that the industry markets or advertises to the public. By definition, nothing stands between the duties or liability a manufacturer owes for the performance of their product, which such product does not perform for its intended purpose until it is connected to the required utilities or in use by the first purchaser.

The manufacturer must design and construct a product that will “insure durable, livable, and safe housing” (24 CFR 3280.303(b)) to the person who purchases such manufactured home for use as a dwelling – the first purchaser.

The manufacturers forthright admit that what leaves the factory will NOT “insure durable, livable, and safe housing” to the first purchaser of his or her merchandise. The industry’s own trade association leaves no doubt to this solemn truth in a publication they produced allegedly in cooperation with the Federal Trade Commission (FTC), and as published by the FTC on their behalf. The same is true in every installation instruction manual produced by the manufacturers of these products. By their own admission, a manufactured home does NOT meet “a reasonable standard for the construction, design, and performance of a manufactured home which meets the needs of the public including the need for quality, durability, and safety” (42 USCA §5402(7)) until its construction has been properly completed at the home site (setup/installed).

In spite of this admission, and with the Secretary’s complicity, the manufacturers have, and continue to issue certifications at the back door of the factory that they forthright admit in their FTC publication, are false or misleading in a material respect, and therefore in violation of 42 USCA §5409(a)(4). Henceforth, the manufacturer washes his or her hands with deliberateness and knowledge of the duty they owe for ensuring their false or misleading certification is cured, before the completion of the sale of their product to the first purchaser.

The 93^rd Congress wrote in the legislative record for P.L 93-383 that a manufactured home would be setup in conformance with the standards under §604 (The MHCSS – codified 42 USCA §5403) of the MHCSS Act. It appears the Secretary thought that serving his own partialities and corruptions, and those of his manufacturers, was more important than “just saving lives and property” of low-income people. Then such is the way of such a leader.

Moreover, in the eleventh hour, to assure that any activity related to the manufacture and assembly [1] of a manufactured home would be covered under the MHCSS Act, the 93^rd Congress added the all-encompassing definition for “manufactured home construction.”

• 42 USCA §5402(1) ''manufactured home construction'' means all activities relating to the assembly and manufacture of a manufactured home including but not limited to those relating to durability, quality, and safety.

In combination with:

• 42 USCA §5402(7) ''Federal manufactured home construction and safety standard'' means a reasonable standard for the construction, design, and performance of a manufactured home which meets the needs of the public including the need for quality, durability, and safety.

The two definitions in concert make it impossible to do any type or kind of activity whatsoever that affects “the ability of the basic manufactured home to comply with the Standards” at any place whatsoever, that cannot be regulated under the authority of the MHCSS Act. The Secretary CHOSE (emphasis added) to exclude the onsite completion of manufactured homes from his regulatory system. He did this in spite of Congress’s express intent that the MHCSS would include such activity, and in spite of the fact that he was fully aware that such exclusion guaranteed catastrophic failure of the full purposes and objectives of Congress: “to … improve the durability, quality, and safety of manufactured homes” (reference endnoteB).

• “No axiom is more clearly established in law, or in reason, than that wherever the end is required, the means are authorized, wherever a general power to do a thing is given, every particular power necessary for doing it is included.” [The Federalist Papers – XLIV, Publius – Madison]

The Secretary and the Manufacturers readily admit that setup/installation is an activity directly related to the “the ability of the basic manufactured home to comply with the Standards.” If we are to believe the Secretary’s tall tale, some mysterious force in the universe has kept the infinite vacuum created by the definition of “manufactured home construction” and “Federal Manufactured Home Construction and Safety Standard,” from pulling setup/installation into its vortex.

• Quod est inconveniens aut contra rationem non permissum est in lege – What is unsuitable or contrary to reason in not allowed in the law.

Essentially, the manufacturers deploy a business model that hands control of the outcome over to persons they allege to have no authority to control. The manufacturers wield the independent contractor and purchaser like a sword to sever their liability or responsibility for the products they design, partially construct, and admit are substandard when they leave the self-imposed (emphasis added) boundaries of their control. In this way, when the outcome is unfavorable, regardless of the cause, the manufacturers simply blame those they have chosen to have no control over for the problems, also known in this industry as “Passing-the-Buck.”

• “Doesn't HUD regulate how manufactured homes are installed?”

“The Manufactured Housing Improvement Act of 2000 directs HUD to establish a Model Installation Standard no later than December 27, 2005.” [Reference - http://www.hud.gov/offices/hsg/sfh/mhs/prod02.cfm]

The Secretary does not expressly state that he did not have the authority to regulate the on site completion of manufactured homes, but he strongly implies that prior to the MHI Act of 2000 that he did not.

• 24 CFR 3282.303 – State plan--suggested provisions.

(c) “Provision for monitoring of the installation of manufactured homes set up in the State to assure that the homes are properly installed and, where necessary, tied down.”

Note: “where necessary, tied down” – there is no such thing as a safe manufactured home in wind zone II and III void of any means of tie down or anchoring. Even in wind zone I, excluding tie down or anchoring for multi-section homes would be a questionable practice, and for singlewide homes, a dangerous practice.

Note: The joint FTC Industry publication mentioned earlier as well leaves no doubt that as the manufacturers see it, setup/installation, which is directly related to the ability of the basic manufactured home to comply with the Standards, is not their responsibility and outside of the Federal Jurisdiction

Consistent with the notion that he had no such authority; the Secretary merely suggests that a State monitor setup/installation. Rejection by the State of his suggestion has no bearing on his approval of a State as one of his SAA. In the future, this will no longer be a suggestion, but a requirement for approval as an SAA as per the MHI Act of 2000. However, this will have little, if any tangible impact on the current state of affairs since all SAA States currently monitor setup/installation, in one haphazard manner or another, with very few exceptions [2]. In the States without an SAA, the Secretary by some form akin to miraculous conception, since he claims not to have such authority, has always oversaw setup/installation, and this authority was reaffirmed under the MHI Act of 2000, and not given (emphasis added).

The absence of specificity by the Secretary is irrelevant because his designee, the former FHA commissioner, William Apgar III, clearly made such false claim in his written testimony to Congress. To paraphrase Apgar, and using the Secretary’s own words, “the ability of the basic manufactured home to comply with the Standards” is directly related to its proper completion at the home site (emphasis added). He went on to say that, the MHCSS Act of 1974 does not provide HUD with the authority to regulate the installation of manufactured homes. To remedy this serious shortcoming he suggested that Congress enact the industry’s legislation (MHI Act of 2000), which would give the Secretary (strongly implying that the MHCSS Act of 1974 did not provide such) the authority to establish minimum model standards for setup/installation [3].

In addition to Congress’s manifest and express intent that the MHCSS include setup/installation, the all-encompassing definitions in the MHCSS Act, is there proof that William Apgar’s testimony before Congress was false or misleading in a material respect. Is their substantive proof that the Secretary knew he had such authority – certainly, and it is indisputable because it is in the Secretary’s own words.

• 24 CFR 3282.8 – APPLICABILITY

(j) Add-on. An add-on added by the dealer or some other party not the manufacturer (except where the manufacturer acts as a dealer) as part of a simultaneous transaction involving the sale of a new manufactured home, is not governed by the standards and is not subject to these regulations. However, the addition of the add-on must not affect the ability of the basic manufactured home to comply with the standards. If the addition of an add-on causes the basic manufactured home to fail to conform to the standards, sale, lease, and offer for sale or lease of the home is prohibited until the manufactured home is brought into conformance with the standards. While the standards do not govern add-ons, the Secretary has the authority to promulgate standards for add-ons and may do so in the future.

The Secretary states that he has the authority, if he chooses, to promulgate standards to regulate add on[s], which beyond any reasonable doubt occurs during or after the setup/installation of the “basic manufactured home” (EMPHASIS ADDDED). The qualification for such authority – add on[s] can affect “the ability of the basic manufactured home to comply with the Standards” (emphasis added). “If the addition of an add-on causes the basic manufactured home to fail to conform to the standards, sale, lease, and offer for sale or lease of the home is prohibited until the manufactured home is brought into conformance with the standards”.

William Apgar stated on the Congressional record (Senate) “that there is a direct correlation between the installation of a manufactured home and the home’s compliance with the Federal standards. A home that is improperly installed may not comply with the Standards” [William Apgar, Assistant Secretary of Housing, written testimony, Senate subcommittee on Housing and Transportation, October 5^th, 1999]. Fundamentally, the final assembly, installation, or onsite completion of the “basic manufactured home” at the home site is an activity “relating to … “the ability of the basic manufactured home to comply with the Standards.”

Without sane or rational explanation, the Secretary claims; even though he admits that “A home that is improperly installed may not comply with the Standards”, and that setup/installation is the completion of the construction of the basic manufactured home itself (emphasis added), that he did not have the authority to regulate the setup/installation of the “basic manufactured home.”

No reasonable person can conclude that the Secretary’s decision to exclude the on site completion of the ‘basic manufactured home” had anything to do with a lack of statutory authority. Beyond any doubt, such decision was a choice he made, and a choice that he knew would have significant negative consequences for those least able to defend themselves against, the effects of his abuse of power or unconscionable action (emphasis added).

The manufacturers employ an anchoring system in their designs to prevent overturning of the home, which the prevention thereof is required by the MHCSS, that is not Nationally certified or labeled, and is unproven by any acceptable scientific/engineering methodology for the particular use of such “material, assembly, subassembly, component, or member” for anchoring manufactured homes.

• 24 CFR 3280.303(g) “Alternative test procedures. In the absence of recognized testing procedures either in these standards or the applicable provisions of those standards incorporated by reference, the manufacturer electing this option shall develop or cause to be developed testing procedures to demonstrate the structural properties and significant characteristics of the material, assembly, subassembly, component, or member. Such testing procedures shall become part of the manufacturer's approved design.”

There is significant and compelling evidence (engineering studies), some dating back as far as 1981, that shows that the anchoring systems used in approximately 60% of manufactured home installations in the United States do not meet anyone’s standards, except the substandard(s) of the manufacturers.

As misdirection, the industry, with HUD’s complicity, have been testing anchoring system pieces and parts for approximately three decades now, which such tests have only proven time-and-time again that such pieces and parts consistently fail to provide the necessary resistance needed for the “the basic manufactured home to comply with the Standards”. Helix soil anchors have been the primary focus of their misleading test boondoggles, which such anchors are not required by the MHCSS to hold or resist anything (emphasis added). The anchoring system, which such systems may include helix soil anchors, is the only thing required by the MHCSS to resist overturning. Such systems have never been tested under a nationally accepted test protocol (none exists), nor has the Secretary required the manufacturers to cause one to be developed under 24 CFR 3280.303(g), to “demonstrate the structural properties and significant characteristics of the… assembly” or system.

However, there is one circumstance where the Secretary does not permit the use of such substandard systems. When HUD’s money is at stake, the manufactured home must have a support and stabilization (foundation) system that has “been engineered for safety and long-term satisfactory performance” (HUD-007487 page i, paragraph 3) (emphasis added). According to the Secretary, to achieve this objective the support and stabilization system “must be constructed of durable materials and be site built” (HUD-007487 page 1-1, 100-1, (C)), and the use of “any type of soil anchor” (HUD-007487 page 1-2, 100-2 – “anchorage”) is not allowed.

To avoid a lengthy discussion of HUD’s almost 400-page manual for support and stabilization of manufactured homes, suffice to say that the “safety and long-term satisfactory performance” of manufactured homes IS NOT the Secretary’s concern, WHEN THE ONLY THING AT STAKE is the life, limb, and property of the purchaser or members of the public (emphasis added).

Mindful of the Secretary’s fictional claim regarding setup/installation, which the support and tie down or anchoring (support and stabilization) is a part thereof, except when Federal dollars are involved, his argument goes:

• Manufactured homes that overturn resulting in personal injuries and deaths, increased insurance costs, and property damage have NO relationship to reducing “the number of personal injuries and deaths, increased insurance costs, and property damage” (42 USCA §5401 [4]).

It should be apparent that the Secretary’s “Federal superintendence of the manufactured home industry”…”stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress” (24 CFR 3282.11(d)).

Even if the Secretary argued retrospectively the sole public exigency purpose for the MHI Act of 2000, which is “affordable manufactured homes,” the Secretary’s contrived argument would be that personal injuries and deaths, increased insurance costs, and property damage have no relationship to the cost (affordability) of manufactured homes to the public. This argument just so happens to be consistent with the surreptitious meaning the manufacturers give to “affordable.”

• “Congress in 1974 declared it necessary to establish Federal construction and safety standards’ in order to reduce injuries, deaths, insurance costs, and property damage resulting from manufactured home accidents…That’s it. Not a word about affordable housing…Just saving lives and property” [Gus Bauman, “Manufactured Housing Institute” (MHI) General Counsel, June 6, 2001]

The June 6, 2001 statement of the General Counsel of The Manufactured Housing Institute (MHI) in regards to the 1974 MHCSS Act not saying “a word about affordable housing” is at best, misleading.

• The manufacturers do not contend that the Act requires the agency to undertake a cost benefit analysis before promulgating new regulations…”

• “In response, the manufacturers argue that” … “the RIA should be open to challenge because it was cited by HUD in the Final Rule to demonstrate that the agency had considered consumer costs as mandated by the Act.”

[United States Court of Appeals, Eleventh Circuit, No. 94-2307, June 12, 1995]

• “However, while consumer protection represents the primary goal of the legislation, complete safety is not to be obtained at all expense” [United States Court of Appeals, Eleventh Circuit, 858 f2d 1521, October 31, 1988]

The problem was not that the MHCSS Act did not consider the cost (affordability) of manufactured homes to the public. The problem was that it did not provide the legislative framework for the Courts to define “cost” and “public” in the demagogic way the manufacturers thought they should be defined, which is as follows:

• “The fourth such criterion directs HUD to "consider the probable effect of such standard[s] on the cost of the manufactured home to the public." 42 U.S.C.A. § 5403(f) (1983). The manufacturers argue that this factor refers solely to the consumer purchase price of manufactured homes…”

• “[i]n fact, as discussed in the preceding section, they argue that HUD as a matter of law should not subsume consumer costs into…“(1) reductions in property damage borne by residents and insurers; (2) reductions in federal [and State] disaster relief expenditures; and (3) reductions in deaths and injuries.”

• “[t]he manufacturers assert … that HUD should be prevented from the kind of "governmental paternalism" that … forecloses the cheap and dangerous option … the argument goes”

[United States Court of Appeals, Eleventh Circuit, No. 94-2307, June 12, 1995]

To cure this, the manufacturers turned to the 106^th Congress for legislative changes, and the 106^th gave them what they wanted. To paraphrase the MHI General Counsel, from the same memorandum cited above, all past cases where the courts have refused to define “cost” and “public” according to the demagogic meaning they give them have been “smoothly undone by the new law” [5] (emphasis added). From henceforth:

• The cost to the purchaser of operating and maintaining a manufactured home is unrelated to ‘the affordability of manufactured homes’, which is limited “solely to the consumer purchase price.”

• The cost of “storm damage repair, loss of personal property, and… personal injury or loss of life, is unrelated to the “public need for affordable manufactured housing,” which again, is limited “solely to the consumer purchase price.” [6]

The Public face of the manufacturers is not the same face they wear behind the curtain of concealment erected by the Secretary.

While HUD was apparently on the other side of the fence in the 1995 standards challenge cited above, at least publicly, it was apparent from policy decisions leading up to this case, and since then, that HUD has behind closed doors, always gone along with the demagogic meaning that the industry gives to “cost” and “public”. If not for an executive order (by President George Bush) in the aftermath of Hurricane Andrew, HUD would have more likely defended or “protect[ed] the quality, durability, safety of manufactured homes” (42 USCA §5401(b)(1) as of MHI Act of 2000) as these existed before Hurricane Andrew.

Think about this – there are plus 12 million manufactured homes in the United States. Being very generous, taking into account that a small percentage of installers do the job right, and the others would accidentally get it right some of the time, let us say that 50% or approximately 6 million manufactured homes in the United States have been properly completed at the home site. This leaves 6 million that were not, which would not only significantly and negatively impact the property value of such homes, but would likely place the occupants of such homes at an unreasonable risk of injury and/or death, and property damage, not to mention neighboring homes and occupants being placed at unreasonable peril [7].