Oregon Department of Justice

Attorney General Ellen F. Rosenblum

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Attorney General Files Actions in Klamath & Multnomah Counties Against Bonanza Homes and Homes America

July 23, 2001

Attorney General Hardy Myers today filed actions in Multnomah and Klamath County Circuit Courts against two manufactured homes dealers as a result of investigations into misrepresentations to consumers concerning the cost of the homes. Named in Assurances of Voluntary Compliance are Bonanza Homes, Inc. of Milwaukie and its owner/president Evan Whitaker of Bend and U.S.A. Mobile Homes, Inc., a Michigan corporation that does business in Oregon as Homes America.

"As we continue our efforts to address and correct unlawful behavior in the manufactured home industry, we are targeting those dealers that appear to be a major cause of consumers' problems." Myers said. "By putting one dealer permanently out-of-business in Oregon and the other into an agreement to change the way it operates, we are two steps closer to cleaning up the industry."

Oregon's Department of Justice consumer protection section received 34 complaints against Bonanza Homes with consumers complaining of being misled about what the actual costs would be after purchasing a manufactured home. Customers also were promised features in the manufactured homes that they never received.

Defendant Whitaker allegedly engaged in making the sale of a manufactured home contingent upon renting space in a specific manufactured home park. Whitaker was a part owner in some of the parks. Whitaker recently declared bankruptcy and Bonanza closed its doors. Bonanza did business throughout Oregon but primarily in Portland, Clackamas and Milton-Freewater.

Under the Assurance, Whitaker is permanently prohibited from being an owner or partner in a manufactured home business and from participating in management activities in that industry for 48 months after which time he may appeal to Justice for approval.

Named in the second agreement is Homes America that was named in 18 complaints filed with the Department of Justice. The complaints allege difficulty in receiving funds on deposits, delivery of homes with different floor plans and amenities than originally ordered and misrepresentations by salespersons concerning the delivery, set-up, total costs and interest rates charged for the houses.

The terms of the agreement require Homes America to make reasonable efforts to resolve consumer complaints filed with Justice and pay $45,000 to the Justice consumer protection and education fund. The dealer sells manufactured houses in Oregon through five Oregon sales centers including Albany, Eugene, Klamath Falls, Medford and Roseburg. At one time, the company had a dealership in White City.

Homes America also must provide its employees and managers at least two-hours of training each year in conducting business in compliance with the Unlawful Trade Practices Act.

All employees of Homes America will receive a summary of the terms of the agreement with Justice and be provided with written policies and guidelines concerning prohibited sales tactics.

The court actions against the dealers are part of Attorney General Myers' long-term strategy to cause significant reform in the manufactured housing industry. In September 2000, Myers convened a Manufactured Housing Task Force of 150 participants made up of industry representatives, consumers, park owners, park managers, lenders, the news media and other interested parties. The task force worked for seven months concluding with recommendations for changes in state policies regarding manufactured housing.

Myers and other members of the task force during the 2001 Legislature introduced several bills focused on making changes in the manufactured housing industry.

Three bills, related to manufactured housing, have been signed into law by Governor John Kitzhaber, while two other bills are still yet to be signed. Those five bills are:

  • HB2701A-Requires manufactured housing dealers to provide notice to buyers if a portion of the buyer's rent will be paid by the dealer or out of financing proceeds. Effective January 1, 2002.
  • HB2702B-Requires landlords renting space for manufactured homes to provide a written statement to prospective tenants listing the improvements to be made by the tenant in order to rent in the park. This includes improvements such as landscaping, decks, gutters, garages and governmental installation fees such as water and sewer known as "system development charges." Effective January 1, 2002.
  • HB3684B-Requires manufactured housing dealers to make uniform disclosures to buyers in purchase agreement forms. Purchase agreements must clearly state the basic price of the home including an itemized list of any additional costs associated with the purchase such as upgrades, administrative fees, extended warranties and park package costs. The bill also requires dealers to provide buyers with a list of state agencies that regulate specific aspects of the manufactured housing industry. Justice will compile this list. Upon signing, effective January 1, 2002.
  • HB3686B-Directs cities and counties to approve subdivisions of manufactured home parks under certain conditions. Allows owners of manufactured homes to own the land, on which they live and gain equity in the property. Effective July 2, 2001.
  • HB3917B-Makes it illegal for manufactured housing dealers, arranging financing for a sale, to require the buyer to purchase certain items in order to be financed. This includes six types of insurance and an extended warranty on the home. The bill also prohibits dealers from misrepresenting to lenders the amount or existence of a down payment. Upon signing, effective January 1, 2002.

Consumers wanting more information on the new laws on manufactured housing may call the Attorney General's consumer hotline at (503) 378-4320 (Salem area only), (503) 229-5576 (Portland area only) our toll-free at 1-877-877-9392. The Department of Justice web site is www.doj.state.or.us.

The Manufactured Dwelling Ombudsman can be reached at (503) 986-2017.

Contact:

Jan Margosian, (503) 947-4333 (media line only) jan.margosian@doj.state.or.us |
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