Manufactured Housing Practice Test

If a dealer breaches a purchase agreement and cannot return a trade-in unit, what must the dealer do?

1. Return the fair market value of the trade-in within 30 days

2. Refund either the contractual value or fair market value within five days

3. Replace the trade-in within 30 days

4. Refund only the specific amount designated in the purchase agreement

The correct answer is: Refund either the contractual value or fair market value within five days

A dealer who breaches a purchase agreement and is unable to return a trade-in unit is obligated to refund either the contractual value or the fair market value of that unit within a specified timeframe. This requirement is in place to protect the interests of consumers who might be adversely affected by such a breach, ensuring they are compensated appropriately for the loss of their trade-in. By allowing the dealer the option to refund either the contractual value or the fair market value, the law recognizes that there may be fluctuations in market conditions and provides flexibility to dealers while still supporting the consumer's rights. The five-day timeframe for this refund ensures that consumers receive timely compensation, as delays could further complicate the situation. Thus, the correct answer highlights both the dealer's responsibility in fulfilling this obligation and the consumer's right to receive fair treatment under the circumstances.