Effective 01 Aug 2002, see footnote

407.1338. Warranty service, warrantor to provide written obligations — compensation of dealer for warranty service, submission of warranty claims, procedure. — 1. Each warrantor shall specify in writing to each of its RV dealers, obligations, if any, for preparation, delivery and warranty service on its products; shall compensate the dealer for warranty service required of the dealer by the warrantor; and shall provide the dealer the schedule of compensation to be paid; and the time allowances for the performance of such work and service. In no event shall such schedule of compensation fail to include reasonable compensation for diagnostic work as well as warranty labor.

2. Time allowances for the diagnosis and performance of warranty labor shall be reasonable for the work to be performed. In the determination of what constitutes reasonable compensation under this section, the principal factors to be given consideration shall be the actual wage rates being paid by the dealer, and the actual retail labor rate being charged by the dealers in the community in which the dealer is doing business. In no event shall such compensation of a dealer for warranty labor be less than the lowest retail labor rates actually charged by the dealer for like nonwarranty labor as long as such rates are reasonable.

3. The warrantor shall reimburse the* dealer for warranty parts at actual wholesale cost, plus a minimum thirty-percent handling charge and the cost, if any, of freight to return warranty parts to the warrantor.

4. Warranty audits of dealer records may be conducted by the warrantor on a reasonable basis, and dealer claims for warranty compensation shall not be denied except for cause, such as performance of nonwarranty repairs, material noncompliance with warrantors' published policies and procedures, lack of material documentation, fraud, or misrepresentation.

5. The* dealer must submit warranty claims within thirty days of completing work.

6. The* dealer must notify the warrantor verbally or in writing if the RV dealer is unable to perform material or repetitive warranty repairs as soon as reasonably possible.

7. The* warrantor must disapprove warranty claims in writing within thirty days of the date of submission by the dealer in the manner and form prescribed by the warrantor. Claims not specifically disapproved in writing within thirty days shall be construed to be approved and shall be paid within forty-five days.

8. It is a violation of this chapter for any warrantor to:

(1) Fail to perform any of its warranty obligations with respect to its warranted product;

(2) Fail to include in written notices of factory campaigns to vehicle owners and dealers the expected date by which necessary parts and equipment, including tires and chassis or chassis parts, will be available to dealers to perform the campaign work. The manufacturer may ship parts in quantity to the dealer to effect such campaign work, and if such parts are in excess of the dealer's requirements, the dealer may return unused parts to the manufacturer for credit after completion of the campaign;

(3) Fail to compensate any of its RV dealers for authorized repairs effected by such dealer of merchandise damaged in manufacture or transit to the dealer, if the carrier is designated by the manufacturer, factory branch, distributor or distributor branch;

(4) Fail to compensate its RV dealers for authorized warranty service in accordance with the schedule of compensation provided the dealer pursuant to** this section, if performed in a timely and competent manner;

(5) Intentionally misrepresent in any way to purchasers of RVs that warranties with respect to the manufacture, performance or design of the vehicle are made by the dealer either as warrantor or cowarrantor; or

(6) Require the dealer to make warranties to customers in any manner related to the manufacture of the RV.

9. It is a violation of this chapter for any RV dealer to:

(1) Fail to perform "predelivery inspection" (PDI) functions, if required, in a competent and timely manner;

(2) Fail to perform warranty service work, authorized by the warrantor, in a reasonably timely and competent manner on any transient customer's vehicle whether sold by that dealer or not;

(3) Misrepresent the terms of any warranty.

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(L. 2001 H.B. 575)

Effective 8-01-02

*Word "the" does not appear in original rolls.

**Word "to" does not appear in original rolls.