Texas Warranty Reimbursement Law

Occupations Code, Title 14, Subtitle A, Chapter 2301.

Sec. 2301.002. DEFINITIONS. In this chapter:

(37) “Warranty work” means parts, labor, and any other expenses incurred by a franchised dealer in complying with the terms of a manufacturer’s or distributor’s warranty.

Sec. 2301.401. PREPARATION, AND DELIVERY REQUIREMENTS.

(a) On request, a manufacturer or distributor shall provide to the department a copy of the current requirements the manufacturer or distributor imposes on its dealers with respect to the dealer’s:

(1) duties under the manufacturer’s or distributor’s warranty; and

(2) vehicle preparation and delivery obligations.

(b) Warranty or preparation and delivery requirements placed on a dealer by a manufacturer are not enforceable unless the requirements are reasonable.

Sec. 2301.402. RATE OF COMPENSATION.

(a) A manufacturer or distributor shall fairly and adequately compensate its dealers for warranty work.

(b) A manufacturer or distributor may not pay or reimburse a dealer an amount of money for warranty work that is less than the amount the dealer charges a retail customer for similar nonwarranty work.

(c) In computing the amount of money a dealer charges a retail customer under Subsection (b), the manufacturer or distributor shall use the greater of:

(1) the average labor rate charged during the preceding six months by the dealer on 100 sequential nonwarranty repair orders, exclusive of routine maintenance; or

(2) the average labor rate charged for 90 consecutive days during the preceding six months by the dealer for nonwarranty repairs, exclusive of routine maintenance.

Sec. 2301.403. ADJUSTMENT OF WARRANTY LABOR RATE.

(a) A dealer may request an adjustment in the dealer’s warranty labor rate. The request must be sent to the manufacturer or distributor by certified mail, return receipt requested, and must state the requested rate and include information reasonably necessary to enable the manufacturer or distributor to adequately evaluate the request.

(b) Not later than the 60th day after the date of receipt of a request under this section, the manufacturer or distributor shall provide written notice to the requesting dealer of the approval or disapproval of the request. If the request is disapproved, the manufacturer or distributor shall state the reasons for the disapproval.

(c) A requesting dealer may file a protest with the board if the manufacturer or distributor:

(1) disapproves the request; or

(2) fails to respond within the time required by this section.

(d) After a protest is filed, the board may uphold the manufacturer’s or distributor’s decision only if the manufacturer or distributor proves by a preponderance of the evidence that the disapproval of the request or failure to respond was reasonable.

(e) If the board does not determine that the disapproval of the request or failure to respond was reasonable, the board shall order the requested rate into effect as of the 60th day after the receipt of the request by the manufacturer or distributor.

(f) Except by agreement of the parties, a warranty labor rate established under this subchapter may not be adjusted more often than once a year

Although the statutory text provided above represented that codified and in effect in the respective state at the time of publication of the above, Armatus Dealer Uplift, LLC bears no responsibility for deviations of the above from versions thereof subsequently in effect as a result of future statutory amendments.