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I plan on doing some work and having it inspected. As part of the work I will be switching some normal breakers to AFCI. Before I get started I notice my panel does not fully latch closed. The latch appears to be thin sheet metal that has snapped off.

I am wondering if this is a code violation and something I will have to fix.

If so that might really change my plans as I don't see these latches as being sold separately or meant to be replaced.

My town is on the 2011 NEC. The breaker panel is a 200A GE catalog # TM3020F

closeup of broken panel clip

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You should be able to replace the latch

Try using a GE TDL106 to replace the broken latch on your panel, although it's not a Code violation, simply annoying to have the door on a NEMA 1 (indoor) panel floating loose like that. (Some smaller panels lack a door, even.)

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