Dealer Protection Laws Take Effect in Virginia

As of Monday, manufacturers may no longer exercise a right of first refusal to block a sale of a multi-franchise dealership chain in Virginia, provided that the prospective buyer is a licensed dealer anywhere in the United States, while adding provisions designed to promote increased ownership opportunities for minorities.

The amended version of Senate Bill 1464, which was introduced by Sen. Jeremy McPike (D-Dale City) and sponsored by Sen. Lionell Spruill (D-Chesapeake), passed the Senate unanimously and passed the House by a vote of 96-2.

Virginia dealers are now more protected if their manufacturer elects to discontinue a line make. As was noted in the WANADA Bulletin published May 7, if a dealership’s manufacturer does not honor dealer agreements, dealers have the right to payment for franchise assets, franchise goodwill value, and real estate assistance. This legislation, House Bill 2174, was introduced by Del. Jason Miyares (R-Virginia Beach), and passed both chambers of the General Assembly unanimously.

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