Lemon Law - Texas
Lemon Law
Lemon Law - "Lemon
law" is that body of state law which defines an automobile
owners rights when the manufacturer is not able to repair the
automobile within the limits specified. In
such cases, the automobile is referred to as a "lemon",
and is subject to the conditions of the state lemon law.
Your Lemon Law
Disclaimer:
These pages are created to inform and educate the public about lemon
law and under the lemon law in your state. They are not and
should not be considered legal opinions or advice as to whether you
have rights under lemon law or whether you should pursue "a
lemon law case". If after reading this information,
you believe you qualify, you should seek the advice and counsel of
an attorney specializing in lemon law in your state. Remember
that each state's lemon laws vary.
3.08(i) General Warranty
Complaints.
The owner of a motor vehicle or the
owner's designated agent may make a complaint concerning defects in
a motor vehicle which are covered by a manufacturer's, converter's,
or distributor's warranty agreement applicable to the vehicle. Any
such complaint must be made in writing to the applicable dealer,
manufacturer, converter, or distributor and must specify the defects
in the vehicle which are covered by the warranty. The owner may also
invoke the Commission's jurisdiction by sending the Commission a
copy of the complaint. A hearing may be scheduled on all complaints
arising under this subsection which are not privately resolved
between the owner and the dealer, manufacturer, converter, or
distributor.
6.07 Warranty Performance
Obligations.
(a) In addition to the other
powers and duties provided for in this Act, the Commission shall
cause manufacturers, converters, and distributors to perform the
obligations imposed by this section. For purposes of this section,
the term "owner" means a retail purchaser, lessor, lessee
other than a sub lessee, or the person so designated on the
certificate of title to a motor vehicle issued by the State
Department of Highways and Public Transportation, or an equivalent
document issued by the duly authorized agency of any other state, or
any person to whom such motor vehicle is legally transferred during
the duration of a manufacturer's or distributor's express warranty
applicable to such motor vehicle, and any other person entitled by
the terms of the manufacturer's, converter's, or distributor's
express warranty to enforce the obligations thereof.
(b) If a new motor vehicle
does not conform to all applicable manufacturer's, converter's, or
distributor's express warranties, the manufacturer, converter, or
distributor shall make the repairs necessary to conform the vehicle
to the applicable express warranties, notwithstanding that the
repairs are made after the expiration of the warranties, if:
(1) the owner or the owner's
designated agent reported the nonconformity to the manufacturer,
converter, or distributor, its agent, or its franchised dealer
during the term of such express warranties; or
(2) a reputable presumption
relating to the vehicle was created under Subsection (d) of this
section. This section does not in any way limit the remedies
available to an owner under a new motor vehicle warranty that
extends beyond the provisions of this section.
(c) If the manufacturer,
converter, or distributor is unable to conform the motor vehicle to
an applicable express warranty by repairing or correcting any defect
or condition which creates a serious safety hazard or substantially
impairs the use or market value of the motor vehicle after a
reasonable number of attempts, the manufacturer, converter, or
distributor shall
(1) replace the motor
vehicle with a comparable motor vehicle; or
(2) accept return of the
vehicle from the owner and refund to the owner the full purchase
price less a reasonable allowance for the owner's use of the vehicle
and any other allowances or refunds payable to the owner. In this
section, "impairment of market value" means a substantial
loss in market value caused by a defect specific to the vehicle. In
addition to replacing the vehicle or refunding the purchase price,
the manufacturer, converter, or distributor shall reimburse the
owner for reasonable incidental costs resulting from loss of use of
the motor vehicle because of the nonconformity or defect. As
necessary to promote the public interest, the Commission by rule
shall define the incidental costs that are eligible for
reimbursement, shall specify other requirements necessary to
determine an eligible cost, and may set a maximum amount that is
eligible for reimbursement, either by type of eligible cost or a
total for all costs. Refunds shall be made to the owner and lien
holder, if any, as their interests may appear. A reasonable
allowance for use shall be that amount directly attributable to use
of the motor vehicle when the vehicle is not out of service for
repair. An order to refund or to replace may not be issued by the
Executive Director against a manufacturer, converter, or distributor
unless the manufacturer, converter, or distributor has been mailed
prior written notification of the alleged nonconformity or defect
from or on behalf of the owner and has been given an opportunity to
cure the alleged defect or nonconformity. In any hearing before the
Executive Director under this section, a manufacturer, converter, or
distributor may plead and prove as an affirmative defense to the
remedies provided hereunder that
(1) the nonconformity is the
result of abuse, neglect, or unauthorized modifications or
alterations of the motor vehicle; or
(2) the nonconformity does
not substantially impair the use or market value of the motor
vehicle. In this section, "serious safety hazard" means a
life-threatening malfunction or nonconformity that substantially
impedes a person's ability to control or operate a motor vehicle for
ordinary use or intended purposes or that creates a substantial risk
of fire or explosion.
(d) There is a reputable
presumption that a reasonable number of attempts have been
undertaken to conform a motor vehicle to the applicable express
warranties if
(1) the same nonconformity
has been subject to repair four or more times by the manufacturer,
converter, or distributor, its agent, or its franchised dealer and
two of the repair attempts have been made within a period of 12
months following the date of original delivery to an owner, or
12,000 miles, whichever occurs first, and the other two repair
attempts occur within the 12 months or 12,000 miles immediately
following the date of the second repair attempt, whichever occurs
first, but such nonconformity continues to exist;
(2) the same nonconformity
creates a serious safety hazard and has caused the vehicle to have
been subject to repair two or more times by the manufacturer,
converter, or distributor, or an authorized agent or franchised
dealer, and at least one attempt to repair the nonconformity was
made in the period of 12 months or 12,000 miles, whichever occurs
first, and at least one other attempt made in the period of 12
months or 12,000 miles after the first repair attempt, whichever
occurs first, but the nonconformity continues to exist; or
(3) the vehicle is out of
service for repair for a cumulative total of 30 or more days in the
24 months or 24,000 miles, whichever occurs first, and at least two
repair attempts were made in the first 12 months or 12,000 miles
immediately following the date of original delivery to an owner and
a nonconformity still exists that substantially impairs the
vehicle's use or market value. The initial 12-month period or 12,000
mile limit, the subsequent 12-month period or 12,000 mile limit, and
the 30-day period shall be extended by any period of time during
which repair services are not available to the owner because of a
war, invasion, strike or fire, flood, or other natural disaster.
During any period of time that the manufacturer or distributor lends
a comparable motor vehicle to the owner during the time the vehicle
is being repaired by a franchised dealer, the 30-day period provided
for in this subsection is tolled.
(e)
(1) The Commission shall
adopt rules for the enforcement and implementation of this section.
(2) The Executive Director
shall, in accordance with rules adopted by the Commission, conduct
hearings and issue final orders for the enforcement and
implementation of this section. Orders issued by the Executive
Director under this section are considered final orders of the
Commission.
(3) Except as provided by
Subdivision (6) of this subsection, the provisions of this section
are not available to an owner in an action seeking a refund or
replacement based upon the alleged nonconformity of a motor vehicle
to an express warranty applicable to the motor vehicle unless the
owner has first exhausted the administrative remedies provided
herein.
(4) The provisions of this
section are not available to a party in an action against a seller
under Chapter 2 or Chapter 17, Business & Commerce Code, as
amended.
(5) Except as provided by
Subdivision (6) of this subsection, the provisions of this section
are available in an action against a manufacturer, converter, or
distributor brought under Chapter 17, Business & Commerce Code,
after the owner has exhausted the administrative remedies provided
by this section.
(6) If, after a complaint
has been filed under this section, the Hearing Examiner has not
issued a proposal for decision and recommended to the Executive
Director a final order before the expiration of the 150th day after
the date the complaint was filed, the Executive Director shall, in
writing sent by certified mail, so inform the complainant and the
manufacturer, converter, or distributor of the expiration of the
150-day period and of the complainant's right to file a civil
action. The Commission shall extend the 150-day period if a delay is
requested or is caused by the complainant.
(7) After receipt of the
notice of the right to file a civil action, the complainant may file
a civil action against one or more of the persons complained of in
the complaint.
(8) A failure by the
Commission to issue a notice of the right to file a civil action
does not affect a complainant's right to bring an action under this
Act.
(9) Any party to a
proceeding under this section before the Executive Director that is
affected by a final order of the Executive Director is entitled to
judicial review of the order under the substantial evidence rule in
a District Court of Travis County, Texas. The judicial review is
subject to the Administrative Procedure and Texas Register Act
(Article 6252-13a, Vernon's Texas Civil Statutes) except to the
extent that that Act is inconsistent with this Act.
(f) This section does not
limit the rights or remedies otherwise available to an owner under
any other law.
(g) In a hearing under this
section, the Executive Director shall make its order with respect to
responsibility for payment of the cost of any refund or replacement
and no manufacturer, converter, or distributor may cause any
franchised dealer to pay directly or indirectly any sum not
specifically so ordered by the Executive Director. If the Executive
Director orders a manufacturer, converter, or distributor to refund
or replace a motor vehicle because it meets the criteria set forth
in this section, the Executive Director may order the franchised
dealer to reimburse the owner, lien holder, manufacturer, converter,
or distributor only for items or options added to the vehicle by the
franchised dealer and only to the extent that one or more of such
items or options contributed to the defect that served as the basis
for the Executive Director's order of refund or replacement. In a
case involving a leased vehicle, the Executive Director may
terminate the lease and apportion the allowance for use and other
allowances or refunds between the lessee and lessor of the vehicle.
(h) A proceeding brought
under this section shall be commenced within six months following
the earlier of (1) expiration of the express warranty term or (2) 24
months or 24,000 miles following the date of original delivery of
the motor vehicle to an owner.
(i) A contractual provision
that excludes or modifies the remedies provided for in this section
is prohibited and shall be deemed null and void as against public
policy unless the exclusion or modification is done with respect to
a settlement agreement between the owner and the manufacturer,
converter, or distributor.
(j)
(1) A manufacturer,
distributor, or converter that has been ordered to repurchase or
replace a vehicle shall, through its franchised dealer, issue a
disclosure statement stating that the vehicle was repurchased or
replaced by the manufacturer, distributor, or converter under this
section. The disclosure statement must accompany the vehicle through
the first retail purchase. The manufacturer, distributor, or
converter must restore the cause of the repurchase or replacement to
factory specifications and issue a new 12-month, 12,000-mile
warranty on the vehicle. The disclosure statement must include a
toll-free telephone number of the Commission that will enable a
purchaser of a repurchased or replaced vehicle to obtain information
about the condition or defect that was the basis of the order for
repurchase or replacement. The Commission shall adopt rules for the
enforcement of this subdivision.
(2) The Commission shall
provide a toll-free telephone number for providing information to
persons who request information about a condition or defect that was
the basis for repurchase or replacement by an order of the Executive
Director. The Commission shall maintain an effective method of
providing information to persons who make the requests.
(k) The Commission shall
publish an annual report on the motor vehicles ordered repurchased
or replaced under this section. The report must list the number of
vehicles by brand name and model and include a brief description of
the conditions or defects that caused the repurchase or replacement.
The Commission shall make the report available to the public. The
Commission may charge a reasonable fee to recover the cost of the
report.
(l) Information filed with
the Board under this section is not a public record and is not
subject to release under the open records law, Chapter 552,
Government Code, until the complaint is finally resolved by order of
the Board.
7.01 Judicial Review; Appeal.
(a) Any party to a
proceeding before the Commission that is affected by a final order,
rule, decision, or other final action of the Commission is entitled
to judicial review of any such final Commission action, under the
substantial evidence rule, in a District Court of Travis County,
Texas, or in the Court of Appeals for the Third Court of Appeals
District, and to the extent not in consistent herewith, pursuant to
the Administrative Procedure and Texas Register Act (Article
6252-13a, Vernon's Texas Civil Statutes). Appeals initiated in the
District Courts of Travis County shall be removable to the Court of
Appeals upon notice of removal to any such district court by any
party at any time prior to trial in the district court. Appeals
initiated in or removed to the Court of Appeals shall be initiated
under the Administrative Procedure and Texas Register Act as if
initiated in a Travis County District Court and shall, upon the
filing thereof, be thereafter governed by the Texas Rules of
Appellate Procedure.
(b) A final action, ruling,
order, or decision of the Motor Vehicle Board of the Texas
Department of Transportation, or the Director of the Motor Vehicle
Division of the Texas Department of Transportation, as appropriate
under the terms of this Act or other law, is the final action with
respect to a matter arising under this Act, and is subject to review
only by judicial review as provided by this Act. The petition for
judicial review must be filed within 30 days of the date on which an
action, ruling, order, or decision of the Board or the director
first becomes final and appealable.
(c) Citation must be served
on the Executive Director. Citation must also be served on all other
parties of record before the Commission. For appeals initiated in
the Court of Appeals, the court shall cause citation to be issued.
(d) Appeals in which
evidence outside the Commission's record is to be taken under
Section 19(d)(3), Administrative Procedure and Texas Register Act
(Article 6252-13a,Version's Texas Civil Statutes), or otherwise,
shall be initiated in a Travis County District Court, or having been
initiated in the Court of Appeals, shall be subject to remand to a
Travis County District Court for proceedings in accordance with
instructions from the Court of Appeals.
(e) Appellants shall pursue
appeals with reasonable diligence. If an appellant fails to
prosecute an appeal within six months after the appeal is filed, the
court shall presume that the appeal has been abandoned. The court
shall dismiss any such appeal on a motion for dismissal made by the
Attorney General or other party unless the appellant, after
receiving due notice, demonstrates good cause for the delay.
(f) Appeal shall not affect
the enforcement of a final Commission order unless its enforcement
is enjoyable under Section 65.001 et seq., Civil Practice and
Remedies Code, and under principles of primary jurisdiction.
107.1 Objective.
It is the objective of these
sections to implement the intent of the legislature as declared in
the Texas Motor Vehicle Commission Code, 3.06 and 6.07(e), by
prescribing rules to provide a simplified and fair procedure for the
enforcement and implementation of the Texas lemon law and consumer
complaints covered by general warranty agreements, including the
processing of complaints, the conduct of hearings, and the
disposition of complaints filed by owners of new motor vehicles
seeking relief under these provisions of the Code.
107.2 Filing of Complaints.
(a) Complaints for relief
under the lemon law must be in writing and filed with the commission
at its office in Austin. Complaints may be in letter form or any
other written format or may be submitted on complaint forms provided
by the commission.
(b) Complaints should state
sufficient facts to enable the commission 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.
(c) Complaints must provide
the following information:
(1) name, address, and phone
number of vehicle owner;
(2) identification of
vehicle by make, model, and year, and manufacturer's vehicle
identification number;
(3) type of warranty
coverage;
(4) name and address of
dealer, or other person, from whom vehicle was purchased or leased,
including the name and address of the current lessor, if applicable;
(5) date of delivery of
vehicle to original owner; and in the case of a demonstrator, the
date the vehicle was placed into demonstrator service;
(6) vehicle mileage at time
vehicle was purchased or leased, mileage when problems with vehicle
were first reported, name of dealer or manufacturer's or
distributor's agent to whom problems were first reported, and
current mileage;
(7) 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;
(8) date on which written
notification of complaint was given to the vehicle manufacturer or
distributor, and if vehicle has been inspected by manufacturer, the
date and results of such inspection;
(9) any other information
which the complainant believes to be pertinent to the complaint.
(d) The commission's staff
will provide information concerning the complaint procedure and
complaint forms to any person requesting information or assistance.
(e) The lemon law complaint
filing fee of $75 should be remitted with the complaint by check or
money order payable to the Texas Motor Vehicle Commission. The
filing fee is nonrefundable, but a complainant who prevails in a
lemon law case is entitled to reimbursement of the amount of the
filing fee. Failure to remit the filing fee with the complaint will
result in delaying the commencement of the 150-day requirement
provided in 107.6(11) of this title (relating to Hearings).
107.3 Review of Complaints.
All complaints will be reviewed
promptly by the commission's staff to determine whether they satisfy
the requirements of the lemon law.
(1) If it cannot be
determined whether a complaint satisfies the requirements of the
lemon law, the complainant will be contacted for additional
information.
(2) If it is determined that
the complaint does not meet the requirements of the lemon law, the
complainant will be notified of this fact.
(3) If it is determined that
the complaint does meet the requirements of the lemon law, the
complaint will be processed in accordance with the following
procedures in 107.4-107.9 of this title (relating to Notification of
Manufacturer and Distributor; Mediation, Settlement; Hearings;
Hearing Officer's Report; Decisions; and Compliance).
(4) For purposes of 6.07(h),
the commencement of a proceeding means the filing of a complaint
with the commission, and the date of filing is determined by the
date of receipt by the commission.
107.4 Notification to
Manufacturer and Distributor.
Upon receipt of a complaint for
relief under the lemon law, notification thereof, with a copy of the
complaint, will be given to the appropriate manufacturer or
distributor against whom the complaint is made, and a response to
the complaint will be requested. Notification of the complaint and a
request for a response will also be given to the selling dealer and
any other dealer that has been involved with the complaint.
107.5 Mediation; Settlement.
If, from a review of the complaint
and the responses received from the manufacturer, distributor, or
dealer, it appears to the commission staff that a settlement or
resolution of the complaint may be possible without the necessity
for a hearing, the commission staff will contact all parties and
attempt to effect a settlement or resolution of the complaint in a
manner satisfactory to the parties.
107.6 Hearings.
Complaints which satisfy the
jurisdictional requirements of the Texas Motor Vehicle Commission
Code, 3.08(i) and 6.07, will be set for hearing and notification of
the date, time, and place the hearing will be given to all parties
by certified mail.
(1) Where possible, and
subject to the availability of commission personnel and funds,
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 ten days
prior notice, or as otherwise provided by law, must be given to all
parties. A notice of hearing will also be provided to a dealer
identified as a party who will be requested to have a representative
appear at the hearing.
(3) Hearings will be
conducted by commission staff hearing officers or by independent
hearing officers designated by the executive director of the
commission.
(4) Hearings will be
informal in nature, it being the intent of the lemon law to provide
a procedure and forum which does not necessitate the services of
attorneys and which does not involve strict legal formalities
applicable to trials in county or district court.
(5) The parties have the
right to be represented by attorneys at a hearing, although
attorneys are not necessary in hearings on lemon law complaints. Any
party who intends to be represented by an attorney at a hearing must
notify the commission and the other party at least five days prior
to the hearing and failure to do so will constitute grounds for
postponement of the hearing if requested by the other party.
(6) The parties have the
right to present their cases in full, including testimony from
witnesses; documentary evidence such as repair orders, warranty
documents, vehicle sales contract, etc.
(7) Each party will be
subject to being questioned by the other party, within limits to be
governed by the hearing officer.
(8) The complainant will be
required to bring the vehicle in question to the hearing for the
purpose of having the vehicle inspected and test driven, unless
otherwise ordered by the hearing officer upon a showing of good
cause as to why the complainant should not be required to bring the
vehicle to the hearing.
(9) The commission may have
the vehicle in question inspected prior to the hearing by an
independent expert, where the opinion of such expert will be of
assistance to the hearing officer and the commission 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, and copies of any findings or report resulting from such
inspection will be provided to all parties prior to the hearing. Any
such expert will be present at the hearing to present his report on
the inspection of the vehicle and to respond to questions by the
parties.
(10) All hearings will be
recorded on tape by the hearing officer. Copies of the tape
recordings of a hearing will be provided to any party upon request
and upon payment for the cost of the tapes.
(11) All hearings will be
conducted expeditiously. However, if a commission hearings officer
has not issued a proposal for decision within 150 days after the
complaint and filing-fee were received, commission staff shall
notify the parties by certified mail that complainant has a right to
file a civil action in state district court to pursue his rights
under the lemon law. The 150-day period shall be extended upon
request of the complainant or if a delay in the proceeding is caused
by the complainant. The notice will inform complainant of his right
to continue his lemon law complaint through the commission if he
chooses.
107.7 Contested Cases: Decisions
and Final Orders.
To expedite the resolution of lemon
law cases, the executive director is authorized to delegate final
decision-making authority to hearings officers. Review of the
hearings officers' decisions and final orders shall be according to
the procedures set forth as follows:
(1) A hearings officer will
prepare a written decision and final order as soon as possible but
not later than 60 days after the hearing is closed. The decision and
order will include the hearings officer's findings of fact and
conclusions of law.
(2) The decision and final
order shall be sent to all parties of record by certified mail.
(3) The decision and order
is final and binding on the parties, in the absence of a timely
motion for rehearing, on the expiration of the period for filing a
motion for rehearing.
(4) A party who disagrees
with the decision and final order may file a motion for rehearing
within 20 days from the date of the mailing of the final order. A
motion for rehearing must include all the specific reasons,
exceptions, or grounds that are asserted by a party as the basis of
the request for a rehearing. It shall recite, if applicable, the
specific findings of fact, conclusions of law, or any other portions
of the decision to which the party objects. Replies to a motion for
rehearing must be filed with the agency within 30 days after the
date of the mailing of the final order.
(5) A motion for rehearing
may be directed either to the executive director or to the
commission, as a body, at the election of the party filing the
motion. If the party filing the motion does not include a specific
request for a rehearing by the members of the commission, the motion
shall be deemed to be a request for a rehearing by the executive
director.
(6) The executive director
or the commission, as appropriate, must act on the motion within 45
days after the mailing of the final order or it is overruled by
operation of law. The executive director or the commission, as
appropriate, 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 mailing 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
mailing of the final order.
(7) If the executive
director or the commission grants a motion for rehearing, the
parties will be notified by first class mail. A rehearing before the
executive director will be scheduled as promptly as possible. A
rehearing before the commission will be scheduled at the earliest
possible meeting of the commission. After rehearing, the executive
director or commission shall issue a final order any additional
findings of fact or conclusions of law necessary to support the
decision. The executive director or the commission may also issue an
order granting 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 person who has
exhausted all administrative remedies, and who is aggrieved by a
final decision in a contested case from which appeal may be taken is
entitled to judicial review under the substantial evidence rule. The
petition shall be filed in a district court of Travis County within
30 days after the decision or order of the agency is final and
appealable. A copy of the petition must be served on the agency and
any other parties of record. After service of the petition on the
agency and within the time permitted for filing an answer, the
agency 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 agency, the agency may
modify its findings and decision or order by reason of the new
evidence, and shall transmit the additional record to the court.
107.8 Decisions.
Any decisions by the commission and
recommended decision by a hearing officer shall give effect to the
presumptions provided in the Texas Motor Vehicle Commission Code,
6.07(d), 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 substantially impairs
the use, market value, or safety of the vehicle after a reasonable
number of attempts, and that the affirmative defenses provided under
the Texas Motor Vehicle Commission Code, 6.07(c), are not
applicable, the commission shall order the manufacturer,
distributor, or converter to replace the vehicle with a comparable
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.
(A) In a complaint involving
a defect or condition that creates a serious safety hazard in the
vehicle, an owner shall be deemed to have given the manufacturer,
distributor, or converter a reasonable number of attempts to repair
the vehicle if he reported and allowed an opportunity to repair the
defect or condition at least once during the period of 12 months or
12,000 miles, whichever occurs first, immediately following the date
of delivery and at least once more in the period of 12 months or
12,000 miles, whichever occurs first, following the first repair
attempt.
(B) A defect or condition
that creates a serious safety hazard is one that results in a life
threatening malfunction or nonconformity that substantially impedes
a person's ability to control or operate a motor vehicle for
ordinary use or intended purposes or that creates a substantial risk
of fire or explosion.
(2) In any decision in favor
of the complainant, the commission will accommodate the
complainant's request with respect to replacement or repurchase of
the vehicle, to the extent possible.
(3) Where a refund of the
purchase price of a vehicle is ordered, the purchase price shall be
the amount of the total purchase price of the vehicle, and shall
include the amount of the sales taxes and title, registration, and
documentary fees, but shall not include the amount of any interest
or 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 lien
holder, if any, as their interests require.
(4) Except in cases where
clear and convincing evidence shows that the vehicle has a longer or
shorter expected useful life than 100,000 miles, the reasonable
allowance for the owner's use of the vehicle shall be that amount
obtained by adding the following:
(A) the product obtained by
multiplying the purchase price of the vehicle, as defined in
paragraph (3) of this section, by a fraction having as its
denominator 100,000 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% of the product
obtained by multiplying the purchase price by a fraction having as
its denominator 100,000 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 TMVC hearing.
(5) 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 as follows.
(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 5.0% of
such purchase price plus any amount or fee, if any, 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 is required to pay the lessor, as specified in clauses
(i) and (ii) of this subparagraph.
(C) When the commission
orders a manufacturer to refund the purchase price in a lease
vehicle transaction, the vehicle shall be returned to the
manufacturer with clear title upon payment of the sums indicated in
subparagraphs (A) and (B) of this paragraph. The lessor shall
transfer title of the vehicle to the manufacturer, as necessary in
order to effectuate the lessee's rights under this rule. In
addition, the lease shall be terminated without any penalty to the
lessee.
(D) Refunds shall be made to
the lessee, lessor, and any lien holders as their interests may
appear. The refund to the lessee under subparagraph (A) of this
paragraph 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 paragraph (4) of this section,
using the amount in subparagraph (B)(i) of this paragraph as the
applicable purchase price.
(6) In any award in favor of
a complainant, the executive director may require the dealer
involved to reimburse the complainant, manufacturer, distributor, or
converter for the cost of any items or options added to the vehicle
but only to the extent that one or more of such items or options
contributed to the defect that served as the basis for the order of
repurchase or replacement. In no event shall this paragraph be
interpreted to mean that a manufacturer, distributor, or converter
will be required to repurchase a vehicle due to a defect or
condition that was solely caused by a dealer add-on item or option.
(7) If it is found by the
commission that a complainant's vehicle does not qualify for
replacement or repurchase, then the commission shall enter an order
dismissing the complaint insofar as relief under the lemon law is
concerned. However, the commission may enter an order in any
proceeding, where appropriate, requiring repair work to be performed
or other action taken to obtain compliance with the manufacturer's,
distributor's, or converter's warranty obligations.
(8) If the vehicle is
substantially damaged or there is an adverse change in its
condition, beyond ordinary wear and tear, from the date of delivery
to the owner to the date of repurchase, and the parties are unable
to agree on an amount of an allowance for such damage or condition,
either party shall have the right to request reconsideration by the
commission of the repurchase price contained in the final order.
(9) The commission will
issue a written order in each case in which a hearing is held and a
copy of the order will be sent to all parties.
107.9 Incidental Expenses.
(a) When a refund of the
purchase price 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 verifiable through receipts or similar written
documents. Reimbursable incidental expenses include:
(1) reasonable cost of
alternate transportation;
(2) charges for towing;
(3) costs of telephone calls
or mail charges directly attributable to contacting the
manufacturer, distributor, converter, or dealer regarding the
vehicle; and
(4) reasonable costs of
meals and lodging necessitated by the vehicle's failure during
out-of town trips.
(b) Only reasonable
incidental expenses shall be reimbursed to a complainant. Incidental
expenses shall be included in the final repurchase price required to
be paid by a manufacturer, distributor, or converter to a prevailing
complainant or in the case of a vehicle replacement, shall be
tendered to the complainant at the time of replacement.
107.10 Compliance.
Compliance with the commission's
order will be monitored by the commission.
(1) A complainant is not
bound by the commission's decision and order and may either accept
or reject the decision.
(2) If a complainant does
not accept the commission's final decision, the proceeding before
the commission will be deemed concluded and the complaint file
closed.
(3) If the complainant
accepts the commission's decision, then the manufacturer,
distributor, or converter and the dealer to the extent of the
dealer's responsibility, if any, shall immediately take such action
as is necessary to implement the commission's decision and order.
(4) If complainant's vehicle
is replaced or repurchased pursuant to a commission order, the
manufacturer, distributor, or converter shall, through its
representative dealer, issue a disclosure statement in the format of
Attachment 1 or on a form approved by the commission, which must
accompany the vehicle through the first retail purchase after the
commission order. In addition, the manufacturer, distributor, or
converter must repair the defect or condition in the vehicle that
resulted in the repurchase and issue, at a minimum, a basic warranty
(12 months/12,000 mile, whichever comes first) on a form approved by
the commission, which warranty shall be provided to the first retail
purchaser of the vehicle following the commission order.
(5) The failure of any
manufacturer, distributor, converter, or dealer to comply with a
decision and order of the commission within the time period
prescribed in the order may subject the manufacturer, distributor,
converter, or dealer to formal action by the commission and the
assessment of civil penalties or other sanctions prescribed by the
Texas Motor Vehicle Commission Code for failure to comply with an
order of the commission.
107.11 Reports to Commission.
The executive director shall inform
the commission concerning the administration and enforcement of the
lemon law. He shall provide monthly reports to the commission which
include data about the number of complaints received, number of
complaints resolved informally and formally, pursuant to written
orders, number of vehicles ordered repurchased, and any other
information that may be requested by the commission.
107.12 Contested Cases under
General Warranty.
Provisions: Decisions and Final
Orders.
To expedite the resolution of
general warranty complaints filed under 3.08(i) of the Texas Motor
Vehicle Commission Code, the executive director is authorized to
conduct hearings and issue final orders for the enforcement and
implementation of this section. Orders issued by the executive
director under this section are considered final orders of the
Commission.
Find other Lemon Laws in these
states:
Lemon Law
Lemon Law - "Lemon
law" is that body of state law which defines an automobile
owners rights when the manufacturer is not able to repair the
automobile within the limits specified by state lemon law. In
such cases, the automobile is referred to as a "lemon",
and is subject to the conditions of the state lemon law.
Your Lemon Law
Disclaimer:
These pages are created to inform and educate the public about lemon
law and under the lemon law in your state. They are not and
should not be considered legal opinions or advice as to whether you
have rights under lemon law or whether you should pursue "a
lemon law case". If after reading this information,
you believe you qualify, you should seek the advice and counsel of
an attorney specializing in lemon law in your state. Remember
that each state's lemon laws vary.
Lemon Law - Lemon
Law - Lemon Law- Lemon Law
