Did the manufactured housing law give the state housing department power over unlicensed real estate brokers?

Plain-English summary

The Executive Director of the Texas Department of Housing and Community Affairs asked whether a new provision, section 6A of the Manufactured Housing Standards Act (article 5221f), added by House Bill 1193 in the 76th Legislature, gave the Department new authority to regulate unlicensed real estate brokers. The Attorney General concluded it did not.

Article 5221f governs the manufactured housing industry, and the Department's executive director has rulemaking authority to protect consumers and govern the conduct of those required to be licensed under the act, including retailers (people in the business of buying for resale, selling, or exchanging manufactured homes). Real estate transactions are governed by a separate statute, the Real Estate License Act (article 6573a), under which the Texas Real Estate Commission oversees licensed real estate brokers. Section 6A(b) of the manufactured housing act prohibits a retailer from selling, representing for sale, or offering for sale any real estate in conjunction with the sale of a manufactured home "except as may be authorized by the department consistent with the provisions of The Real Estate License Act."

The opinion read that provision as a restriction on retailers (who the Department already regulates), not as a grant of new authority over real estate brokering. Section 6A addresses "land-home transactions," where both real estate and a manufactured home are bought together. Nothing in it explicitly gives the Department authority over unlicensed real estate brokering, and an agency has only the powers expressly conferred or necessarily implied. Rather than expanding the Department's reach, the section forbids retailers from certain practices without the Department's assent and conditions that assent on compliance with the Real Estate License Act. The opinion noted this reading matched both the House and Senate bill analyses, which said the statute did not grant additional regulatory authority, and the bill sponsor's explanation that the concern was misleading representations to buyers in rural land-home purchases. General regulation of real estate brokering remains with the Texas Real Estate Commission. Because the Director's second question assumed a "yes" to the first, the opinion did not reach it.

Currency note

This opinion was issued in 2000. Subsequent statutory amendments, court decisions, or later Attorney General opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

What the opinion meant for those who asked

The Department of Housing and Community Affairs (what the opinion held for it): The opinion held that section 6A did not enlarge the Department's authority to reach unlicensed real estate brokers; it gave the Department only the role of authorizing (or not) a regulated retailer's combined real-estate-and-home sales, consistent with the Real Estate License Act.

Manufactured-housing retailers (what the opinion held for them): The opinion held that section 6A(b) bars a retailer from selling, representing, or offering real estate in conjunction with a manufactured home sale unless the Department authorizes it consistent with the Real Estate License Act.

The Texas Real Estate Commission (what the opinion held for it): The opinion held that general regulation of real estate brokering remains the province of the Real Estate Commission, not the housing Department.

Common questions

Did section 6A let the housing department regulate real estate brokers?
No. The opinion concluded section 6A gave the Department no new authority over unlicensed real estate brokers and instead restricted manufactured-housing retailers.

What does section 6A actually do?
The opinion explained it prohibits a manufactured-housing retailer from selling or offering real estate together with a manufactured home unless the Department authorizes it in a way consistent with the Real Estate License Act.

Who regulates real estate brokers in Texas?
The opinion concluded that general regulation of real estate brokering remains with the Texas Real Estate Commission under the Real Estate License Act.

What problem was section 6A meant to address?
The opinion noted the bill sponsor's explanation that the concern was misleading representations made to buyers of manufactured homes, mainly in rural areas, in combined land-home purchases.

Background and statutory framework

Article 5221f, the Manufactured Housing Standards Act, regulates the manufactured housing industry. Section 9(b) gives the Department's executive director authority to adopt rules and take action to assure compliance with the act and the Texas Manufactured Housing Standards Code, and section 9(m) directs the director to set rules protecting consumers and governing the conduct of those required to be licensed, including retailers as defined in section 3(19). The Real Estate License Act, article 6573a, governs real estate transactions, and section 1(b) makes it unlawful to act as a real estate broker or salesperson without a license from the Texas Real Estate Commission.

House Bill 1193 (Act of May 30, 1999, 76th Leg., R.S., ch. 1369) added section 6A. Section 6A(b) prohibits a retailer from selling, representing for sale, or offering for sale real estate in conjunction with a manufactured home except as authorized by the Department consistent with the Real Estate License Act. The opinion applied the rule that an administrative agency has only powers expressly conferred or necessary to accomplish its duties (State v. Public Utility Comm'n, 883 S.W.2d 190, 194 (Tex. 1994)), and found section 6A neither expressly nor by necessary implication granted the Department authority over unlicensed real estate brokering. It noted the House and Senate bill analyses agreed the statute did not grant additional regulatory authority, and the sponsor's hearing statement framing the concern as misleading representations in rural land-home transactions.

Citations

Statutory provisions:

• Tex. Rev. Civ. Stat. Ann. art. 5221f, §§ 3(19), 6A, 9(b), 9(m) (Vernon Supp. 2000)
• Tex. Rev. Civ. Stat. Ann. art. 6573a, § 1(b) (Vernon Supp. 2000)

Cases:

• State v. Public Utility Comm'n, 883 S.W.2d 190 (Tex. 1994)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/john-cornyn/jc-0272
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2000/jc0272.pdf

Original opinion text

Best-effort transcription from the official scanned PDF. Minor character-level errors from the source OCR have been corrected; the linked PDF is authoritative.

OFFICE OF THE ATTORNEY GENERAL - STATE OF TEXAS

JOHN CORNYN

August 29, 2000

Ms. Daisy A. Stiner
Executive Director
Texas Department of Housing and Community Affairs
P.O. Box 13941
Austin, Texas 78711-3941

Opinion No. JC-0272

Re: Whether section 6A of article 5221f, Revised Civil Statutes, authorizes the Texas Department of Housing and Community Affairs to regulate unlicensed real estate brokers (RQ-0208-JC)

Dear Ms. Stiner:

You have asked this office whether the addition of section 6A to the Manufactured Housing Standards Act, article 5221f, Revised Civil Statutes, by House Bill 1193, 76th Legislature, grants new regulatory authority to the Texas Department of Housing and Community Affairs (the "Department") over unlicensed real estate brokers. In our view, it does not.

Article 5221f governs the regulation of the manufactured housing industry in Texas. Pursuant to section 9 of the act, rule-making authority under it is given to the executive director of the Department, who is empowered to "adopt rules and regulations, promulgate administrative orders, and take all action necessary to assure compliance with the intent and purpose of this Act . . . and of the Texas Manufactured Housing Standards Code." TEX. REV. CIV. STAT. ANN. art. 5221f, § 9(b) (Vernon Supp. 2000). The director is further authorized and instructed by the statute to "establish rules and regulations for the protection of the interests of consumers who occupy or desire to purchase or install manufactured housing and for the business conduct of those persons required to be licensed under this Act." Id. § 9(m). Persons required to be licensed include retailers, who are defined by the statute as "person[s] engaged in the business of buying for resale, selling, or exchanging manufactured homes or offering such for sale, exchange, or lease-purchase to consumers." Id. § 3(19).

Real estate transactions, on the other hand, are governed by the Real Estate License Act, article 6573a of the Revised Civil Statutes. Pursuant to that act, the Texas Real Estate Commission has general regulatory oversight over licensed real estate brokers in the state. According to article 6573a, § 1(b), "It is unlawful for a person to act in the capacity of, engage in the business of, or advertise or hold that person out as engaging in or conducting the business of a real estate broker or a real estate salesperson within this state without first obtaining a real estate license from the Texas Real Estate Commission." Id. art. 6573a, § 1(b).

The Manufactured Housing Standards Act, article 5221f, has been amended by House Bill 1193,[1] enacted by the 76th Legislature, which inter alia added section 6A to the act. Section 6A(b), which appears to have prompted your question, reads as follows:

The retailer is prohibited from selling, or representing for sale, or offering for sale any real estate in conjunction with the sale of a manufactured home except as may be authorized by the department consistent with the provisions of The Real Estate License Act (Article 6573a, Vernon's Texas Civil Statutes).

Id. art. 5221f, § 6A.

You inform us that "[i]t has been suggested that Section 6A grants the Department new regulatory authority over unlicensed real estate brokers if the broker is a retailer and the unlicensed brokerage is in conjunction with the sale of a manufactured home." Request Letter at 1.[2] We do not agree.

Section 6A concerns what are called "land-home transactions," in which, as we understand it, both real estate and a manufactured home are being purchased together. Nothing in the statutory language explicitly vests the Department with authority over unlicensed real estate brokering, which is part of the regulatory sphere of the Real Estate Commission, as we have previously noted. Nor does the statute grant such authority to the Department by necessary implication. See State v. Public Utility Comm'n, 883 S.W.2d 190, 194 (Tex. 1994) (administrative agency, as creation of legislature, has only those powers expressly conferred and those necessary to accomplish duties). Rather, the statute forbids retailers, who are already subject to regulation by the Department, from engaging in certain practices without the Department's assent, and conditions the Department's ability to give that assent on another settled body of law.

Our conclusion that the Department has not been granted new regulatory authority over unlicensed real estate brokers is, we note, also consistent with both House and Senate bill analyses of House Bill 1193, according to both of which the statute does not grant additional regulatory authority. See HOUSE COMM. ON URBAN AFFAIRS, BILL ANALYSIS, Tex. H.B. 1193, 76th Leg., R.S. (1999); SENATE COMM. ON ADMINISTRATION, BILL ANALYSIS, Tex. H.B. 1193, 76th Leg., R.S. (1999). The general purpose of the section was explained by Senator Chris Harris in his discussion of the amendment when introducing it at the public hearing of the Senate Committee on Administration on April 15, 1999. The senator said, "There is a real problem that I perceive, or potential problem in this industry, where there are representations made to buyers of manufactured homes and this mainly happens in rural areas . . . [with] land-home purchases." After laying out the statutory language, the senator said of such land-home transactions, "And more or less I want to get truth in lending into it if it's packaged." Hearings on Tex. H.B. 1193 Before the Senate Comm. on Administration, 76th Leg., R.S. (Apr. 15, 1999) (statement of Senator Chris Harris) (tape available from Senate Staff Services Office).

To that end, the statute forbids the sale, offer, or representation for sale of real estate in conjunction with the sale of manufactured housing by a retailer of manufactured housing "except as may be authorized by the [Department of Housing and Community Affairs]." However, the Department's power to authorize such sales is itself circumscribed. Such authorization must be "consistent with the provisions of The Real Estate License Act." That is, the retailer may not be permitted to sell, represent for sale, or offer for sale real estate in conjunction with the sale of a manufactured home if such acts would violate the Real Estate License Act. The general regulation of real estate brokering is and remains the province of the Texas Real Estate Commission.

Because your second question presupposes an affirmative answer to your first, we do not consider it.

SUMMARY

Section 6A of article 5221f, Texas Revised Civil Statutes, added to the statute by House Bill 1193, 76th Legislature, does not grant to the Texas Department of Housing and Community Affairs new regulatory authority over unlicensed real estate brokers.

Very truly yours,

JOHN CORNYN
Attorney General of Texas

ANDY TAYLOR
First Assistant Attorney General

CLARK KENT ERVIN
Deputy Attorney General - General Counsel

SUSAN D. GUSKY
Chair, Opinion Committee

James E. Tourtelott
Assistant Attorney General - Opinion Committee

[1] Act of May 30, 1999, 76th Leg., R.S., ch. 1369, § 4, 1999 Tex. Gen. Laws 4628, 4629-30.

[2] Letter from Daisy Stiner, Executive Director, Texas Department of Housing and Community Affairs, to Honorable John Cornyn, Attorney General of Texas (Mar. 22, 2000) (on file with Opinion Committee).