918-674-0057 Alternative Inspection Pilot Program (1) There is established in the division an optional alternative inspection pilot program. The alternative inspection pilot program ends December 31, 2018. A manufacturer must continuously meet the requirements of this rule for continued use of this program. (2) Under this program the division may waive in-plant cover inspections specified in OAR 918-674-0055(2)(a) for certain prefabricated structures. (3) Following initial approval, a manufacturer must obtain annual approval from the division for continued use of the program. Subsequent approval is based upon division evaluation of the manufacturer’s prior year performance under this program. (4) The scope of construction is limited to prefabricated structures: (a) Classified as Group R-3 occupancies; (b) 2,500 square feet or less; and (c) Single story. (5) The following definitions apply to this rule. (a) “Defect” means any design or construction that requires repair or replacement due to work of the manufacturer, contractor or subcontractor. (b) “Loss run” means information about current and prior reported incidents for the manufacturer under the warranty, including all paid amounts and reserves for further payment. Such losses shall be valued not more than 90 days prior to the date of the loss runs. (c) “Warranty” means the minimum coverage including, but is not limited to: (A) In the first 12 months, coverage for any defect in materials and labor; (B) In the first 24 months, coverage for any defect in materials and labor supplied for the electrical, plumbing, HVAC delivery and distribution systems; and (C) Ten-year construction defect coverage for material and labor defects that result in the failure of a load bearing part of the home or any defects that materially and adversely affect the use of the home for residential occupancy. (6) A manufacturer must submit a compliance control program as specified in OAR 918-674-0060(2) and pay the appropriate fee as specified in OAR 918-674-0155. The compliance control program must also contain an inspection checklist, in a form and format acceptable to the division, where the manufacturer inspects the structure according to the applicable state building code and documents any waived inspections under this program including, but not limited to: (a) Inspection type; (b) Name and license number of the electrical contractor and their signing supervisor; (c) Name and license number of the plumbing contractor; (d) Person performing inspection(s); (e) Date of inspection(s); (f) Code violations observed; (g) Corrective action taken to resolve the issue(s); and (h) An executive management signature. (7) A copy of the inspection checklist must be provided during the final inspection. (8) Prior to approving a manufacturer for this alternative inspection pilot program, the division must fully inspect one structure to ensure the manufacturer is following its approved compliance control program and determine if the manufacturer is capable of constructing code compliant structures. (9) The final inspection performed by the division is to ensure that the manufacturer has satisfied the requirements of this rule as evidenced by a completed and signed inspection checklist. The division’s final inspection is limited to only those items that can be visually inspected or by removing typical access panels. It may be necessary for an inspector to use simple hand tools to access certain installations. (10) The final inspection performed by the division may not be construed to mean that the division or a division inspector assumes any liability for any work or any inspection performed by the manufacturer under this alternative inspection program. (11) A manufacturer is required to purchase a warranty for each structure built under this alternative inspection pilot program that is offered for sale, rent, or lease in Oregon. A warranty must include, but is not limited to: (a) A warranty program that is provided by or has evidence of a contractual liability insurance policy from an Oregon admitted insurance carrier; and (b) Is transferable from the initial purchaser to any subsequent purchaser for the terms of the initial warranty period; and (c) Provisions in the warranty provider’s contract that allows the warranty provider to review a manufacturer’s financial stability at each renewal or at other times if there are indications of financial instability. (12) A manufacturer must submit, along with it’s quality control manual, a written statement that the manufacturer will agree to provide a “loss run” on an annual basis from the insurer providing the warranty protection for structures built under this program. The loss run must be submitted to the division by March 1 of each year following division approval for use of the program. (13) This rule does not waive: (a) The cover inspections for fire sprinkler systems; (b) Other inspection requirements in OAR 918-674-0055 (final inspection or any reinspection); or (c) Any license, permit, or plan review requirements. (14) The division may perform random audits of the manufacturer’s alternative inspection program for the purposes of verifying the manufacturer is complying with the compliance control program. Fees for evaluating or auditing a compliance control program are as specified in OAR 918-674-0155(4). (15) The division may deny a manufacturer’s use of the alternative inspection program if the division determines that the manufacturer is unable to construct complying structures as determined by final inspection, reinspection, as a result of evaluating or auditing the manufacturer’s compliance control program, or excessive warranty claims. Statutory/Other Authority: ORS 455.030, 455.100 & 455.110 Statutes/Other Implemented: ORS 455.110 & 455.705 History: BCD 15-2012, f. 12-21-12, cert. ef. 1-1-13