General Warranty Complaints.
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.
Warranty Performance Obligations.
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.
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:
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
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
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
replace the motor vehicle with a comparable motor vehicle; or
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
the nonconformity is the result of abuse, neglect, or
unauthorized modifications or alterations of the motor vehicle;
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.
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
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;
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
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.
The Commission shall adopt rules for the enforcement and
implementation of this section.
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.
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.
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.
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.
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.
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.
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.
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.
This section does not limit the rights or remedies otherwise
available to an owner under any other law.
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.
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.
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
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.
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.
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.
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.
Judicial Review; Appeal.
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.
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.
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.
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.
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.
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.
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.
Filing of Complaints.
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.
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
Complaints must provide the following information:
name, address, and phone number of vehicle owner;
identification of vehicle by make, model, and year, and
manufacturer's vehicle identification number;
type of warranty coverage;
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;
date of delivery of vehicle to original owner; and in the case
of a demonstrator, the date the vehicle was placed into
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;
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
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
any other information which the complainant believes to be
pertinent to the complaint.
The commission's staff will provide information concerning the
complaint procedure and complaint forms to any person requesting
information or assistance.
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).
Review of Complaints.
complaints will be reviewed promptly by the commission's staff
to determine whether they satisfy the requirements of the lemon
If it cannot be determined whether a complaint satisfies the
requirements of the lemon law, the complainant will be contacted
for additional information.
If it is determined that the complaint does not meet the
requirements of the lemon law, the complainant will be notified
of this fact.
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).
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.
Notification to Manufacturer and Distributor.
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.
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.
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.
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
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.
Hearings will be conducted by commission staff hearing officers
or by independent hearing officers designated by the executive
director of the commission.
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
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.
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.
Each party will be subject to being questioned by the other
party, within limits to be governed by the hearing officer.
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
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
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
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
Contested Cases: Decisions and Final Orders.
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:
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.
The decision and final order shall be sent to all parties of
record by certified mail.
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.
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.
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.
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.
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.
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
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
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
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
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
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
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.
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
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
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.
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.
The lessee shall receive the total of:
all lease payments previously paid by him to the lessor under
the terms of the lease; and
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.
The lessor shall receive the total of:
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
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
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.
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.
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
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.
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.
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.
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
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
reasonable cost of alternate transportation;
charges for towing;
costs of telephone calls or mail charges directly attributable
to contacting the manufacturer, distributor, converter, or
dealer regarding the vehicle; and
reasonable costs of meals and lodging necessitated by the
vehicle's failure during out-of town trips.
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.
with the commission's order will be monitored by the commission.
A complainant is not bound by the commission's decision and
order and may either accept or reject the decision.
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.
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.
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.
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.
Reports to Commission.
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.
Contested Cases under General Warranty.
Decisions and Final Orders.
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.