Advisory opinion letter

THIS APPENDIX MUST BE READ TOGETHER WITH THE ATTACHED ADVISORY OPINION LETTER.

THE FOLLOWING SEPARATE ITEMS OF EQUIPMENT ARE CONSUMER PRODUCTS" COVERED BY THE MAGNUSONMOSS WARRANTY ACT WHEN SOLD AS PART OF A HOME:

Heating and Ventilation
Boiler
Heat Pump
Electronic air cleaner
Exhaust fan
Thermostat
Space heater
Furnace
Air conditioning system
H umiclifier
Mechanical/Electrical
Central vacuum system
Smoke detector

ADVISORY OPINIONS 1033

Fire alarm
Fire extinguisher
Garage door opener
Chimes
Water pump
Intercom
Burglar alarm
Electric meter
Water meter
Gas meter
Gas or electric barbecue grill
Pltunbing

Whirlpool bath
Garbage disposal
Water heater
Water softener
Sump pump
Applia' l1(;es

Refrigera tor
Freezer
Trash Compactor
Range
Oven
Kitchen center
Dishwasher
Oven hood
Clothes washer
Clothes dryer
Ice maker

THE FOLLOWING ARE NOT CONSUMER PRODUCTS UNDER THE MAGNUSON-MOSS WARRANTY ACT WHEN SOLD AS PART OF A NEW HOME:

HeathIg and Ventilation
Radiator
Convector
Register

88 F.

Duct

Mechanical/ Elect?"ical

Garage door
Electrical switch and
outlet
Light fixture
Electric panel box
Fuse
Circuit breaker
Wiring

Pl1.imbiT,"g
Sprinkler head
Water closet
Bidet
Lavatory
Bathtub
Laundry tray
Sink
Shower stall
Plumbing fittings

(shower head, faucet, trap, escutcheon, and drain) Medicine cabinet

Miscel.lameO1.lS Ite'fns
Cabinet
Door
Shelving
Window
Floor Covering
(includes carpeting, linoleum , etc.
Wall or wall eovering
Ceiling
Vanity
Gutter
Shingle
Chimney and fireplace
Fencing

ADVISORY OPINIONS 1035

THE FOLLOWING SEPARATE ITEMS OF EQUIPMENT ARE NOT CONSUMER PRODUCTS UNDER THE MAGNUSON-MOSS W ARRANTY ACT WHEN SOLD AS PART OF A CONDOMINIUM COOPERATIVE OR SIMILAR MULTIPLE-FAMILY DWELLING AS THEY ARE NOT NORMALLY USED FOR "PERSONAL FAMILY OR HOUSEHOLD PURPOSES" WITHIN THE MEANING OF THE ACT:

Fusable fire door
closer
Emergency back-up
generator
Elevator
TV Security monitor
Master TV antenna
Institutional trash
compactor

Supplenw' nta.l. Letter of Request

November 1, 1976 Dear Chairman Collier:

This acknowledges the FTC's October 20 letter on our request to extend the effective date of the rule on informal dispute settlement mechanisms. We appreciate the FTC' s expeditious handling of this matter prior to HOW's Board meeting on October 21. However, we are deeply disappointed that the extension is only to May 1 and not October 1 as requested. The question of the length of extension, you may recall, came up during our meeting in your office. At that time, you too indicated you were dubious that even a six-month extension would be sufficient to get CongTessional clarification on the intent regarding coverage of new home warranties. That lent support in our minds at least, to the request for a longer extension period. The FTC letter states that this extension is being provided because of logistical problems in bringing the HOW program into compliance with the proposed interpretations published in the Federal Register on August 16, 1976. The informal dispute settlement procedure visualized by the regulations is totally cou~ter to what we believe is an effective approach in the field of new housing. This same view was expressed in detail to the FTC by the American Arbitration Association, Better Business Bureau and others over a year ago.

88 F.

If the definition of "consumer products" in a new home were clear (we still do not have the final interpretation), \ve might be able to bifurcate and operate with different systems depending on the nature of the complaint. From our conversations with the FTC staff, it seems that bifurcation is the procedure they believe \ve should follow. However, if the final interpretation is similar to the August proposed interpretation (and all indications are that it will be little different) the course of bifurcation would be impossible. The system we would be faced with would be no more and no less than "Rube Goldberg" contrivance. It would be impossible of description in readily understandable language.

HOW, therefore, is confronted with an extremely risky predicament. And we stilI cannot understand why. The insurance backing of our warranty is a totally and distinctly different feature, different than any other industry program in existence. Our dilemma is that on one hand we have FTC and Magnuson-Moss with jurisdiction over warranties but not insurance, and on the other hand we have state insurance commissioners who have jurisdiction over insurance but not warranties. In our program, the two are inseparable.

extension only to May we must in this limited tiIT.e: , given an Attempt to get Congressional action on clarification. If we fail or if the action is short of an exemption for new housing, we must then refile an amendment in all state insurance departments. After two and one-half years from the date of the first filing in all fifty states, there are still four states where we have not yet gotten approval. We have no idea what kind of time will be required to get an amendment approved.

Once insurance commission approval is gotten, we must then reprint all our documents. Numbered documents require special facilities, so we are looking at four to six weeks under ideal circumstances.

We must then retrieve over 100 000 numbered forms scattered throughout the U.S. and replace these forms with new, revised like-numbered documents.

We then have a major training job, not only with local HOW Council staff, but with participating builders and their staffs. During this period, any gTo\\Tth is likely to be compromised and both ADVISORY OPINIONS 1037

consumer and industry will suffer. We are trying to make this program truly beneficial to the consumer. We have constantly been completely open with government at all levels. We have sought advice and guidance from knowledgeable consumer groups, consumer affairs officers, and other government officials.

Congressman Moss has continued to support our efforts before the FTC; it must be apparent that the principal sponsor in the House would like to see the problem resolved in a way that is not disruptive. I earnestly urge you to review the four-month extension and as a minimum first step in obtaining an equitable resolution of this situation to consider an extension until October 1, 1977. We would be pleased to discuss this further with you at the earliest possible date.

Sincerely,
Isl Richard J. Canavan
Letter of Response