VA franchise protection bills headed for governors desk
Two franchise bills in the Virginia General Assembly (HB1696 and S1191), aimed at limiting various OEM practices that coerce dealers on facilities construction, site control and successorship are on their way to the governors desk for signature after they unanimously passed both houses. The bills, which will now be combined into one measure, are designed to significantly enhance dealer protection and include provisions related to fair vehicle inventory delivery rules and establishing the dealer right to acquire goods and services beyond the OEM when it makes business sense for a dealer to do so.
The measures had been the subject of heavy lobbying by manufacturers, but VADA and dealers statewide successfully resisted the challenge, which included full page ads in the Richmond Times Dispatch by the Alliance of Automobile Manufacturers urging defeat of the legislation.
Still working its way through the legislature is SB 1372, which provides that in every DMV hearing involving an OEM, the burden of proof is to be placed on the manufacturer, NOT the dealer. This is a reversal of previous practice where it had generally been the rule to put the burden of proof on the dealer. The bill passed the Senate and is now on its way to the House floor where it is also expected to pass.
There are two other measures involving the Virginia Motor Vehicle Dealer Board (MVDB), one that will have an impact on dealer business practices and the other not. HB 2011 will require dealers to maintain vehicle sales records for five years instead of four, and SB 1372 raises the amount that can be recovered by a consumer from the Transaction Recovery Fund from $20,000 per incident to $50,000 per incident. HB 2011, which was introduced at the urging of the MVDB, has already passed the House and is expected to pass in the Senate. SB1372 was opposed by VADA and never made it out of committee.
Lastly, Virginia based dealers are urged to counsel their sales staff that dealership Internet postings must follow Virginia law with regard to notification that the ad is a dealership ad, regardless of where on the Internet they are posted. The caution comes from the MVDBs executive director, who has received complaints that this poses a problem with postings to Craigslist. The MVDB is planning to more vigorously monitor Internet sites like Craigslist to ensure that dealers follow the law.
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