The Law Office of Darin Siefkes Texas Lemon Law

Texas Lemon Law Administrative Code

OCCUPATIONS CODE

43 Tex. Admin. Code §215.201

(a) It is the objective of this subchapter to implement the intent of the legislature as declared in Occupations Code, Chapter 2301, Subchapter M (§§2301.601 – 2301.613) and Occupations Code, §2301.204. These rules provide a simplified and fair procedure for the enforcement of these provisions of the Code, including the processing of complaints, the conduct of hearings, and the formal or informal disposition of complaints filed by owners seeking relief under these provisions of the Code. Practice and procedure in contested cases heard by the State Office of Administrative Hearings (SOAH) are provided for in Subchapter I of this chapter (relating to Practice and Procedure for Hearings Conducted by the State Office of Administrative Hearings) and the provisions of this subchapter to the extent that the provisions do not conflict with SOAH rules.

(b) The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Comparable Motor Vehicle–A new motor vehicle, with comparable mileage, from the same manufacturer, converter or distributor’s product line and the same model year or newer as the vehicle to be replaced or as reasonably equivalent to the motor vehicle to be replaced.
(2) Lemon Law–Refers to Occupations Code, Chapter 2301, Subchapter M (§§2301.601 – 2301.613).
(3) Owner–A person as defined by Occupations Code, §2301.601(2).
(4) Warranty Performance–Refers to Occupations Code, §2301.204.

43 Tex. Admin. Code §215.202

(a) Lemon Law Complaints.
(1) Complaints for relief under the lemon law must be written and filed with the department by hand delivery to the department’s headquarters building in Austin, by mail to the address of the department, or by e-mail or facsimile transmission to a department-designated e-mail address or facsimile number. Complaints may be submitted in letter or other written format, or on complaint forms provided by the department.
(2) Complaints should state sufficient facts to enable the department and the party complained against to know the nature of the complaint and the specific problems or circumstances which form the basis of the claim for relief under the lemon law.
(3) Complaints should provide the following information:
(A) name, address, and phone number of vehicle owner;
(B) identification of vehicle by make, model, and year, and manufacturer’s vehicle identification number;
(C) type of warranty coverage;
(D) name and address of dealer, or other person from whom vehicle was purchased or leased, including the name and address of the lessor, if applicable;
(E) date of delivery of vehicle to original owner; and in the case of a demonstrator, the date the vehicle was placed into demonstrator service;
(F) vehicle mileage at time vehicle was purchased or leased, mileage when problems with vehicle were first reported, name of dealer or manufacturer’s, converter’s, or distributor’s agent to whom problems were first reported, and current mileage;
(G) identification of existing problems and brief description of history of problems and repairs on vehicle, including date and mileage of each repair, with copies of repair orders where possible;
(H) date on which written notification of complaint was given to the vehicle manufacturer, converter, or distributor, and if the vehicle has been inspected by manufacturer, converter, or distributor, the date and results of such inspection; and
(I) any other information which the complainant believes to be pertinent to the complaint.
(4) The department’s staff will provide information concerning the complaint procedure and complaint forms to any person requesting information or assistance.
(5) The filing fee required under the lemon law should be remitted with the complaint by any form of payment accepted by the department. The filing fee is nonrefundable, but a complainant who prevails in a case is entitled to reimbursement of the filing fee. Failure to remit the filing fee with the complaint will delay commencement of the 150-day period referenced in paragraph (7) of this subsection and may result in dismissal of the complaint.
(6) The commencement of a lemon law proceeding occurs on the date of receipt of the filing fee by the department or its authorized agent.
(7) If the hearings examiner has not issued an order within 150 days after the commencement of the lemon law proceeding in accordance with paragraph (6) of this subsection, department staff shall notify the parties by mail that complainant may file a civil action in state district court to seek relief under the lemon law. The notice will inform the complainant of the right to continue the lemon law complaint through the department. The 150-day period shall be extended upon request of the complainant or if a delay in the proceeding is caused by the complainant.

(b) Warranty Performance Complaints (Repair-Only Relief).
(1) Complaints for warranty performance relief filed with the department must comply with the requirements of subsection (a)(1) – (3) of this section.
(2) No filing fee is required for a complaint filed for a warranty performance claim.
(3) If the defect in the motor vehicle that is the subject of the warranty performance complaint was reported to the manufacturer, converter or distributor or its authorized agent prior to the expiration of the warranty period, a complaint may be filed with the department in accordance with this section.
(4) If the defect cannot be resolved pursuant to §215.205 of this subchapter (relating to Mediation; Settlement), a hearing will be scheduled and conducted in accordance with this subchapter and Occupations Code, Chapter 2301.
(5) The final order authority will issue an order on the warranty performance complaint. A party who disagrees with the order may oppose the order using the procedures described in §215.207 of this subchapter (relating to Contested Cases: Final Orders).
(6) Department staff will provide information concerning the complaint procedure and complaint forms to any person requesting information or assistance.

43 Tex. Admin. Code §215.203

All complaints will be reviewed promptly by department staff to determine whether they satisfy the minimum requirements of a lemon law or a warranty performance complaint.
(1) If it cannot be determined whether a complaint satisfies the minimum lemon law or warranty performance requirements, the complainant will be contacted for additional information.
(2) If it is determined that the complaint does meet the minimum lemon law or warranty performance requirements, the complaint will be processed in accordance with the procedures set forth in this subchapter.

43 Tex. Admin. Code §215.204

Upon receipt of a complaint for lemon law or warranty performance relief, the department will provide notification of the complaint to the appropriate manufacturer, converter, or distributor, and a response to the complaint will be requested. The department will also provide a copy of the complaint to the selling dealer and any other dealers that have been involved with the complaint, and a response may be requested.

43 Tex. Admin. Code §215.205

(a) Before a complaint filed under Occupations Code, §2301.204 or §§2301.601 – 2301.613 is scheduled for a hearing, department staff will attempt to effect a settlement or resolution of the complaint through mediation.

(b) While the mediation is not binding, all parties are required to participate in the mediation process in good faith.

(c) In a case filed under Occupations Code, §2301.204 or §§2301.601 – 2301.613, the mediator shall qualify for appointment as an impartial third party in accordance with Civil Practice and Remedies Code, Chapter 154.

43 Tex. Admin. Code §215.206

Lemon law or warranty performance complaints that satisfy the jurisdictional requirements of the Occupations Code will be set for hearing, and notification of the date, time, and place of the hearing will be given to all parties by certified mail.
(1) Where possible, hearings will be held in the city where the complainant resides or at a location reasonably convenient to the complainant.
(2) Hearings will be scheduled at the earliest date possible, provided that a 10-day notice, or such other notice as is required by law, is given to all parties.
(3) Hearings will be conducted expeditiously by a hearings examiner in accordance with Government Code, Chapter 2001; Occupations Code, §2301.704; and the provisions of this subchapter.
(4) Hearings will be informal. The parties have the right to be represented by attorneys at a hearing, although attorneys are not required. Any party who intends to be represented by an attorney or an authorized representative at a hearing must notify the hearings examiner, the department, and the other party at least five business days prior to the hearing. Failure to provide such notice will result in postponement of the hearing if postponement is requested by the other party.
(5) Subject to hearings examiner rulings, parties may present their cases in full, including testimony from witnesses, and documentary evidence such as repair orders, warranty documents and the vehicle sales contract.
(6) By agreement of the parties and with the approval of the hearings examiner, the hearing may be conducted by written submissions only or by telephone.
(7) Except for hearings conducted by written submission only, each party may be questioned by the other party, at the discretion of the hearings examiner.
(8) Except for hearings conducted by written submission only or by telephone, the complainant must bring the vehicle in question to the hearing so that the vehicle may be inspected and test driven, unless otherwise ordered by the hearings examiner upon a showing of good cause by the complainant.
(9) The department may have the vehicle in question inspected by an expert prior to the hearing if the department determines expert opinion may assist in arriving at a decision. Any such inspection shall be made upon prior notice to all parties who shall have the right to be present at such inspection. Copies of any findings or report from such inspection will be provided to all parties before, or at, the hearing.
(10) Except for hearings conducted by written submission only, all hearings will be recorded by the hearings examiner. Copies of the hearing recordings will be provided to any party upon request and upon payment as provided by law.

43 Tex. Admin. Code §215.207

(a) A motion for rehearing of a final order issued by the Board under Occupations Code, Chapter 2301, Subchapter E or M, shall follow the procedures in Subchapter I of this chapter (relating to Practice and Procedure for Hearings Conducted by the State Office of Administrative Hearings).

(b) A motion for rehearing of a final order issued by a hearings examiner shall follow the procedures in this subsection.
(1) The hearings examiner will prepare a final order as soon as possible but not later than 60 days after the hearing is closed, or as otherwise provided by law. The final order will include the hearings examiner’s findings of fact and conclusions of law. The final order shall be sent by the department to all parties of record.
(2) A party that disagrees with the final order may file a motion for rehearing within 20 days from the date of the notification of the final order.
(3) A motion for rehearing of a final order issued by a hearings examiner must be filed with the appropriate department office and decided by the chief hearings examiner.
(4) A motion for rehearing must include the specific reasons, exceptions, or grounds that are asserted by a party as the basis of the request for a rehearing. A motion for rehearing shall recite, if applicable, the specific findings of fact, conclusions of law, or any other portions of the final order to which the party objects.
(5) Replies to a motion for rehearing must be filed with the motion for rehearing authority under Occupations Code, §2301.713 within 30 days after the date of the notification of the final order.
(6) The motion for rehearing authority must act on the motion within 45 days after the date of notification of the final order, or as otherwise provided by law, or the motion is overruled by operation of law. The motion for rehearing authority may, by written order, extend the period for filing, replying to, and taking action on a motion for rehearing, not to exceed 90 days after the date of notification of the final order. In the event of an extension of time, the motion for rehearing is overruled by operation of law on the date fixed by the written order of extension, or in the absence of a fixed date, 90 days after the date of notification of the final order.
(7) If the motion for rehearing authority grants a motion for rehearing, the parties will be notified by mail. A rehearing will be scheduled as promptly as possible. After rehearing, a final order shall be issued with any additional findings of fact or conclusions of law necessary to support the final order. The motion for rehearing authority also may issue an order granting the relief requested in a motion for rehearing or replies thereto without the need for a rehearing. If a motion for rehearing and the relief requested is denied, an order so stating will be issued.
(8) A party who has exhausted all administrative remedies, and who is aggrieved by a final order in a contested case from which appeal may be taken is entitled to judicial review pursuant to Occupations Code, §§2301.751 – 2301.756, under the substantial evidence rule. The petition shall be filed in a district court of Travis County or in the Court of Appeals for the Third Court of Appeals District within 30 days after the order is final and appealable. A copy of the petition must be served on the final order authority and any other parties of record. After service of the petition and within the time permitted for filing an answer, the final order authority shall transmit to the reviewing court the original or a certified copy of the entire record of the proceeding. If the court orders new evidence to be presented to the final order authority, such decision-maker may modify the findings and decision or order by reason of the new evidence, and shall transmit the additional record to the court.

43 Tex. Admin. Code §215.208

(a) Unless otherwise indicated, this section applies to decisions that relate to lemon law complaints. Decisions shall give effect to the presumptions provided in Occupations Code, §2301.605, where applicable.
(1) If it is found that the manufacturer, distributor, or converter is not able to conform the vehicle to an applicable express warranty by repairing or correcting a defect in the complainant’s vehicle which creates a serious safety hazard or substantially impairs the use or market value of the vehicle after a reasonable number of attempts, and that the affirmative defenses provided under Occupations Code, §2301.606, are not applicable, the final order authority shall issue a final order to the manufacturer, distributor, or converter to replace the vehicle with a comparable motor vehicle, less a reasonable allowance for the owner’s use of the vehicle, or accept the return of the vehicle from the owner and refund to the owner the full purchase price of the vehicle, less a reasonable allowance for the owner’s use of the vehicle.
(2) In any decision in favor of the complainant, the final order authority will accommodate the complainant’s request with respect to replacement or repurchase of the vehicle, to the extent possible.

(b) This subsection applies only to the repurchase of motor vehicles.
(1) Where a refund of the purchase price of a vehicle is ordered, the purchase price shall be the total purchase price of the vehicle, but shall not include the amount of any interest, finance charge or insurance premiums. The award to the vehicle owner shall include reimbursement for the amount of the lemon law complaint filing fee paid by or on behalf of the vehicle owner. The refund shall be made payable to the vehicle owner and the lienholder, if any, as their interests require.
(2) There is a rebuttable presumption that a motor vehicle has a useful life of 120,000 miles. Except in cases where the preponderance of the evidence shows that the vehicle has a longer or shorter expected useful life than 120,000 miles, the reasonable allowance for the owner’s use of the vehicle shall be that amount obtained by adding subparagraphs (A) and (B) of this paragraph.
(A) the product obtained by multiplying the purchase price of the vehicle, as defined in paragraph (1) of this subsection, by a fraction having as its denominator 120,000 and having as its numerator the number of miles that the vehicle traveled from the time of delivery to the owner to the first report of the defect or condition forming the basis of the repurchase order; and
(B) 50 percent of the product obtained by multiplying the purchase price by a fraction having as its denominator 120,000 and having as its numerator the number of miles that the vehicle traveled after the first report of the defect or condition forming the basis of the repurchase order. The number of miles during the period covered in this paragraph shall be determined from the date of the first report of the defect or condition forming the basis of the repurchase order through the date of the hearing.
(3) There is a rebuttable presumption that the useful life of a towable recreational vehicle is 3,650 days (10 years). Except in cases where preponderance of the evidence shows that the vehicle has a longer or shorter expected useful life than 3,650 days (10 years), the reasonable allowance for the owner’s use of the towable recreational vehicle shall be that amount obtained by adding subparagraphs (A) and (B) of this paragraph.
(A) The product obtained by multiplying the purchase price of the towable recreational vehicle, as defined in paragraph (1) of this subsection, by a fraction having as its denominator 3,650 days (10 years), except the denominator shall be 1,825 days (5 years), if the towable recreational vehicle is occupied on a full time basis, and having as its numerator the number of days from the time of delivery to the owner to the first report of the defect or condition forming the basis of the repurchase order.
(B) 50 percent of the product obtained by multiplying the purchase price by a fraction having as its denominator 3,650 days (10 years), except the denominator shall be 1,825 days (5 years), if the towable recreational vehicle is occupied on a full time basis, and having as its numerator the number of days of ownership after the first report of the defect or condition forming the basis of the repurchase order. The number of days during the period covered in this paragraph shall be determined from the date of the first report of the defect or condition forming the basis of the repurchase order through the date of the hearing.
(C) Any day or part of a day that the vehicle is out of service for repair will be deducted from the numerator in determining the reasonable allowance for use of a towable recreational vehicle in this paragraph.

(c) This subsection applies only to leased motor vehicle relief.
(1) Except in cases involving unusual and extenuating circumstances, supported by a preponderance of the evidence, where refund of the purchase price of a leased vehicle is ordered, the purchase price shall be allocated and paid to the lessee and the lessor, respectively set out as follows in subparagraphs (A) and (B) of this paragraph.
(A) The lessee shall receive the total of:
(i) all lease payments previously paid by him to the lessor under the terms of the lease; and
(ii) all sums previously paid by him to the lessor in connection with entering into the lease agreement, including, but not limited to, any capitalized cost reduction, down payment, trade-in, or similar cost, plus sales tax, license and registration fees, and other documentary fees, if applicable.
(B) The lessor shall receive the total of:
(i) the actual price paid by the lessor for the vehicle, including tax, title, license, and documentary fees, if paid by lessor, and as evidenced in a bill of sale, bank draft demand, tax collector’s receipt, or similar instrument; plus
(ii) an additional 5 percent of such purchase price plus any amount or fee paid by lessor to secure the lease or interest in the lease;
(iii) provided, however, that a credit, reflecting all of the payments made by the lessee, shall be deducted from the actual purchase price which the manufacturer, converter, or distributor is required to pay the lessor, as specified in clauses (i) and (ii) of this subparagraph.
(2) When the final order authority orders a manufacturer, converter, or distributor to refund the purchase price in a leased vehicle transaction, the vehicle shall be returned to the manufacturer, converter, or distributor with clear title upon payment of the sums indicated in paragraph (1)(A) and (B) of this subsection. The lessor shall transfer title of the vehicle to the manufacturer, converter, or distributor, as necessary to effectuate the lessee’s rights. The lease shall be terminated without penalty to the lessee.
(3) Refunds shall be made to the lessee, lessor, and any lienholders as their interest may appear. The refund to the lessee under paragraph (1)(A) of this subsection shall be reduced by a reasonable allowance for the lessee’s use of the vehicle. A reasonable allowance for use shall be computed according to the formula in subsection (b)(2) or (3) of this section, using the amount in paragraph (1)(B)(i) of this subsection as the applicable purchase price.

(d) This subsection applies only to replacement of motor vehicles.
(1) Upon issuance of an order from the final order authority to a manufacturer, converter, or distributor to replace a motor vehicle, the manufacturer, converter, or distributor shall:
(A) Promptly authorize the exchange of the complainant’s vehicle with the complainant’s choice of any comparable motor vehicle.
(B) Instruct the dealer to contract the sale of the selected comparable vehicle with the complainant under the following terms:
(i) The sales price of the comparable vehicle shall be the vehicle’s Manufacturer’s Suggested Retail Price (MSRP);
(ii) The trade-in value of the complainant’s vehicle shall be the MSRP at the time of the original transaction, less a reasonable allowance for the complainant’s use of the complainant’s vehicle; and
(iii) The use allowance for replacement relief shall be calculated using the formulas outlined in subsection (b)(2) and (3) of this section.
(2) Upon any replacement of a complainant’s vehicle, the complainant shall be responsible for payment or financing of the usage allowance of the complainant’s vehicle, any outstanding liens on the complainant’s vehicle, and applicable taxes and fees associated with the new sale, excluding documentary fees.
(A) If the comparable vehicle has a higher MSRP than the complainant’s vehicle, the complainant shall be responsible at the time of sale to pay or finance the difference in the two vehicles’ MSRPs to the manufacturer, converter or distributor.
(B) If the comparable vehicle has a lower MSRP than the complainant’s vehicle, the complainant will be credited the difference in the MSRP between the two vehicles. The difference credited shall not exceed the amount of the calculated usage allowance for the complainant’s vehicle.
(3) The complainant is responsible to obtain financing, if necessary, to complete the transaction.
(4) The replacement transaction, as described in paragraphs (2) and (3) of this subsection, shall be completed as specified in the final order. If this cannot be accomplished within the ordered time period, the manufacturer shall repurchase the complainant’s motor vehicle pursuant to the repurchase provisions of this section. If repurchase relief occurs, a party may request calculation of the repurchase price by the final order authority.

(e) If the final order authority finds that a complainant’s vehicle does not qualify for replacement or repurchase, an order may be entered in any
proceeding, where appropriate, requiring repair work to be performed or other action taken to obtain compliance with the manufacturer’s, converter’s, or distributor’s warranty obligations.

(f) If the vehicle is substantially damaged or there is an adverse change in its condition, beyond ordinary wear and tear, from the date of the hearing to the date of repurchase, and the parties are unable to agree on an amount allowed for such damage or condition, either party may request reconsideration by the final order authority of the repurchase price contained in the final order.

(g) In any award in favor of a complainant, the final order authority may require the dealer involved to reimburse the complainant, manufacturer, converter, or distributor for the cost of any items or options added to the vehicle if one or more of such items or options contributed to the defect that is the basis for the order, repurchase or replacement. This subsection shall not be interpreted to require a manufacturer, converter, or distributor to repurchase a vehicle due to a defect or condition that was solely caused by a dealer add-on item or option.

43 Tex. Admin. Code §215.209

(a) When a refund of the purchase price or replacement of a vehicle is ordered, the complainant shall be reimbursed for certain incidental expenses incurred by the complainant from loss of use of the motor vehicle because of the defect or nonconformity which is the basis of the complaint. The expenses must be reasonable and verified through receipts or similar written documents. Reimbursable incidental expenses include but are not limited to the following costs:
(1) alternate transportation;
(2) towing;
(3) telephone calls or mail charges directly attributable to contacting the manufacturer, distributor, converter, or dealer regarding the vehicle;
(4) meals and lodging necessitated by the vehicle’s failure during out-of-town trips;
(5) loss or damage to personal property;
(6) attorney fees if the complainant retains counsel after notification that the respondent is represented by counsel; and
(7) items or accessories added to the vehicle at or after purchase, less a reasonable allowance for use.

(b) Incidental expenses shall be included in the final repurchase price required to be paid by a manufacturer, converter, or distributor to a prevailing complainant or in the case of a vehicle replacement, shall be tendered to the complainant at the time of replacement.
(c) When awarding reimbursement for the cost of items or accessories presented under subsection (a)(7) of this section, the hearings examiner shall consider the permanent nature, functionality, and value added by the items or accessories and whether the items or accessories are original equipment manufacturer (OEM) parts or non-OEM parts.

43 Tex. Admin. Code §215.210

Compliance with an order issued by the final order authority will be monitored by the department.
(1) A complainant is not bound by a final decision and order and may either accept or reject the decision.
(2) If a complainant does not accept the final decision, the proceeding before the final order authority will be deemed concluded and the complaint file closed.
(3) If the complainant accepts the final decision, then the manufacturer, converter, or distributor and the dealer to the extent of the dealer’s responsibility, if any, shall immediately take such action as is necessary to implement the final decision and order.
(4) If a manufacturer, converter, or distributor replaces or repurchases a vehicle pursuant to an order issued by the final order authority, reacquires a vehicle to settle a complaint filed under Occupations Code, Chapter 2301, Subchapter M or Occupations Code, §2301.204, or brings a vehicle into the state of Texas which has been reacquired to resolve a warranty claim in another jurisdiction, the manufacturer, converter, or distributor shall, prior to resale of such vehicle, re-title the vehicle in Texas and issue a disclosure statement on a form provided by or approved by the department. In addition, the manufacturer, converter, or distributor reacquiring the vehicle shall affix a disclosure label provided by or approved by the department on an approved location in or on the vehicle. Both the disclosure statement and the disclosure label shall accompany the vehicle through the first retail purchase. No person or entity holding a license or general distinguishing number issued by the department under Occupations Code, Chapter 2301 or Transportation Code, Chapter 503 shall remove or cause the removal of the disclosure label until delivery of the vehicle to the first retail purchaser. A manufacturer, converter, or distributor shall provide the department in writing, the name, address, and telephone number of any transferee, regardless of residence, to whom the manufacturer, distributor, or converter, as the case may be, transfers the vehicle within 60 days of each transfer. The selling dealer shall return the completed disclosure statement to the department within 60 days of the retail sale of a reacquired vehicle. Any manufacturer, converter, or distributor or holder of a general distinguishing number who violates this section is liable for a civil penalty or other sanctions prescribed by the Occupations Code. In addition, the manufacturer, converter, or distributor must repair the defect or condition in the vehicle that resulted in the vehicle being reacquired and issue, at a minimum, a basic warranty (12 months/12,000 mile, whichever comes first), except for non-original equipment manufacturer items or accessories, which warranty shall be provided to the first retail purchaser of the vehicle.
(5) In the event of any conflict between this section and the terms contained in a cease and desist order, the terms of the cease and desist order shall prevail.
(6) The failure of any manufacturer, converter, distributor or dealer to comply with a final order issued by the final order authority within the time period prescribed in the order may subject the manufacturer, converter, or distributor, or dealer to formal action by the department, including the assessment of civil penalties or other sanctions prescribed by Occupations Code, Chapter 2301, for the failure to comply with an order issued by the final order authority.