Michigan Administrative Code › Department - Licensing and Regulatory Affairs › Bureau of Construction Codes › Manufactured Housing › Part 4 - RETAILER BUSINESS PRACTICES › Section R. 125.1403 - Consumer deposits; providing consumer with executed purchase agreement; recording amount of consumer deposit; refunds; notice to consumer of intent to cancel purchase agreement; accepting deposits and agreements in name of retailer; escrow accounts; alternative to escrow account; notice of refund on purchase agreement

Current through Vol. 24-12, July 15, 2024
Rule 403.
(1)
				  Before receiving a consumer deposit, a retailer shall give the consumer an
				  executed purchase agreement.
(2)
				  Unless the retailer has a consumer deposit bond or cash or security deposits
				  under subrule (9) of this rule, a consumer deposit shall be placed in an escrow
				  account and remain there until the closing. After the closing, the retailer may
				  transfer the deposit to a general account.
(3) A retailer shall record the exact amount
				  of the consumer deposit on each request for financing that is sent to a lending
				  institution.
(4) A retailer shall
				  refund to a consumer the total amount of a consumer deposit on the purchase of
				  a home not more than 15 banking days after a request for financing has been
				  rejected by the lending institution or if the consumer cancels the purchase
				  agreement before the binding date under subrule (13) of this rule. The consumer
				  shall notify the retailer, in writing, of his or her intent to cancel the
				  purchase agreement. The notification shall be delivered to the retailer by
				  certified mail postmarked before the close of the business day on the binding
				  date to be eligible for return of the consumer deposit. A retailer has no
				  obligation to refund the consumer deposit if the consumer cancels the purchase
				  agreement of a new or pre-owned home after the binding date. As used in this
				  subrule, "binding date" means either 7 days after the date that a purchaser of
				  a home receives a legible copy of the executed purchase agreement or the time
				  at which the purchase agreement is executed if an application for certificate
				  of manufactured home ownership is executed within 7 days.
(5) An employee who accepts consumer deposits
				  and purchase agreements in the name of a retailer is authorized by the retailer
				  to accept the deposits.
(6) As a
				  condition of licensing, a retailer shall establish an escrow account, post a
				  consumer deposit bond, or deposit cash or other securities in compliance with
				  the provisions of the act for the protection of consumer deposits received by
				  the retailer.
(7) If a retailer
				  establishes an escrow account, the retailer shall place all consumer cash
				  deposits or similar negotiable instruments of the consumer's deposit in the
				  escrow account by the end of the second banking day following receipt. Escrow
				  accounts shall be maintained as checking accounts.
(8) A retailer may maintain an escrow account
				  at each location where it maintains records. A retailer may maintain not more
				  than $500.00 of its own funds in each deposit escrow account to cover bank
				  service charges and to avoid the account being closed or overdrawn if there are
				  no other funds in the account. The funds shall be accounted for in a
				  bookkeeping system as prescribed in these rules.
(9) In place of an escrow account, a retailer
				  may maintain, for each location, a consumer deposit bond or cash or security
				  deposits in an amount equal to the highest monthly receipts of consumer cash
				  deposits and cash value of other security recorded over the previous 3 years.
				  If the highest monthly receipts formula is used to determine the amount of the
				  bond or deposit, then the amount of the bond or deposit shall be adjusted to
				  reflect the previous 3 years' experience before a license is renewed. If at any
				  time the consumer deposits received exceed the amount of the bond or deposit
				  established under the formula, then the retailer shall immediately increase the
				  amount of the bond or deposit or escrow the excess amount.
(10) If a retailer posts a bond or deposits
				  cash or other securities, then the retailer who files an initial application
				  shall maintain the bond, cash, or other securities at a minimum of $10,000.00
				  per location until sufficient data is available to comply with the formula. If
				  the retailer has more than 1 location, then the required bonds or deposits may
				  be combined into 1 bond or deposit.
(11) All bonds shall be made payable to the
				  "State of Michigan" on a form prescribed by the department and shall accompany
				  an application for a retailer's license. All cash or security deposits shall be
				  deposited with the State of Michigan upon application for a retailer's license.
				  If the application is for a renewal license only, and if a copy of the bond is
				  on file and the bond is continuous or if the cash or securities are on deposit,
				  then this subrule shall not apply.
(12) If a retailer establishes an escrow
				  account, then the retailer shall file, with the department, on a form
				  prescribed by the department, an affidavit attesting to the fact that account
				  has been established. The affidavit shall be filed as an enclosure to the
				  retailer license application.
(13)
				  The front of each purchase agreement shall contain the following statement in
				  not less than 8-point, boldfaced, all caps type:
"Seven days after the purchaser receives a legible copy of
					 the executed purchase agreement, or if any time within the 7 days an
					 application for a certificate of manufactured home ownership is fully executed,
					 the sale is final and the retailer is not obligated to refund the consumer
					 deposit if the purchaser subsequently cancels the agreement. If the purchaser
					 elects to cancel the purchase agreement within the 7 day limit and an
					 application for a certificate of manufactured home ownership has not been fully
					 executed, the purchaser shall notify the retailer in writing by certified mail
					 postmarked before the end of the seventh day to be eligible for full refund of
					 the consumer deposit."