Manufacturer's Financial Surety Requirements

New Requirements for Manufacturers Selling Direct to Home Purchasers or Receiving Deposits or Down Payments 

Pursuant to the adoption and effective date of 6/30/2023, for new Administrative Rules (8 CCR 1302-14), and new Colorado Revised Statute language from HB22-1242, all manufacturers who sell direct to purchasers of one or two family dwellings or receive deposits or down payments from registered sellers must do the following: 

If you sell direct to consumers: 

1. Complete the Registered Seller application. See Rules 4.5 and 5.2.
2. Establish and maintain an escrow account as described in Rule 5.3. Please note the exceptions to coverage amounts in Rule 5.4 (C)(2) & (3). 
3. Provide the Division of Housing a letter of credit or surety bond in the amount of $100,000, which the Division of Housing may call upon after an enforcement action for cancellation or failure to deliver a unit when the down payment is not returned. Rule 4.5.2. We understand that the amount in the Rule 5 for registered sellers is $50,000, but it is clear in Rule 4.5.2 that the amount for Manufacturers is $100,000. 
4. Comply with the registered seller contract requirements. Rule 5.10, 5.11, & 5.12 and Colorado Revised Statute 24-32-3325. 
5. Comply with all other registered seller requirements. Rule 5. 

If you receive deposits or down payments from a registered seller who has received this money from a consumer: 

1. Establish and maintain an escrow account as described in Rule 5.3. Please note the exceptions to coverage amounts in Rule 5.4 (C)(2) & (3). 
2. Provide the Division of Housing a letter of credit or surety bond in the amount of $100,000, which the Division of Housing may call upon after an enforcement action for cancellation or failure to deliver a unit when the down payment is not returned. Rule 4.5.2. We understand that the amount in the Rule 5 for registered sellers is $50,000, but it is clear in Rule 4.5.2 that the amount for Manufacturers is $100,000. Please note there is an error in Rule 5.3. The reference in the last line should read “...utilized for purposes of rule 5.4(C)(2) and (3)”. 

Please read all applicable Rules and Colorado Revised Statutes with respect to manufacturer and registered seller requirements as listed in the Administrative Rules Complete. The applicable Colorado Revised Statutes are 24-32-3301 – 24- 32-3329 and are located at the Colorado Legal Resources.

Please send your bond, letter of credit, or certificate of deposit within the next 60 days to dola_manfuacturedbuildings@state.co.us.