VA Dealer Board Adopts New Policy for Storage of Dealer Records
At its September 10, 2007 meeting at DMV headquarters in Richmond, the Virginia Motor Vehicle Dealer Board (MVDB) adopted a significant new policy for storage of dealer records. Under Virginia law, dealers must maintain records concerning employees, vehicle inventories, vehicle transactions, and other important matters at the place of business. The records must be available for immediate review by MVDB representatives who visit dealerships.
In the past, MVDB has granted variances to dealers who wish to maintain certain records off the premises. The new policy is designed to permit flexibility without going to MVDB for a variance given the increasing electronic maintenance of records.
The new policy will permit off-site storage of records, provided they are immediately retrievable electronically at the originating dealer or retrievable under other limited circumstances. MVDB will publish its new policy in an upcoming issue of its newsletter that goes to all Virginia dealers.
Other notable actions by MVDB include the following:
Special Event Sales. A Virginia dealer was investigated for having a special event sale in which there was concern that salespeople were not employees of the dealership. When the MVDB investigator arrived, the dealer did not immediately make available records concerning the employment of the salespeople. While it later turned out that the salespeople were employees, a civil penalty of $350 was imposed for not making records available immediately for the MVDB representative.
There are two important lessons from this case. First, dealers are reminded that special event sales in which salespeople are employees of the special event company and not of the dealer are impermissible under Virginia law. Sales activities may be undertaken only by licensed salespeople. To be licensed, a salesperson must be a W-2 employee of the dealership.
Second, official MVDB representatives have the right of immediate access to records that are required to be kept onsite by statute when they arrive at a dealership. In this case, the dealer was concerned because of the request for employment records, fearing a violation of privacy laws. However, Motor Vehicle Dealer Board representatives are statutorily empowered to review such records, and there is an exemption under privacy laws for disclosure of relevant information to them.
Material Misstatement Policy. MVDB decided to make no change to its material misstatement policy as to licensed applicants. An applicant for a sales license who has had a conviction, but who does not reveal it on the application will not be licensed in the ordinary course. Instead, under MVDB policy, such an applicant can wait six months and reapply, or the applicant must undergo a hearing process where the Board must make a final decision on the application. MVDB staff considered some suggestions for changes to the policy, but the Board determined not to make those changes.
Advertising. MVDB voted to support a legislative proposal to change Virginia advertising law to allow dealers to indicate limited availability of new cars by advertising stock number. A recent Virginia Supreme Court decision ruled that under current Virginia law listing a new car by its stock number is an impermissible indication of limited availability of advertised vehicles.
MVDB scheduled its next meeting for Monday, November 5, 2007, meeting, as it does, every other month.
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