Pub. 12 2013-2014 Issue 3

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S 33 new jersey auto retailer W W W . N J C A R . O R G proximately 800 dealers and, through its “Genesis Project,” consolidated its brands with certain dealers who granted Chrysler site control over the facility for 30 years. More recently, GM sought to exact facility upgrades through subsidies which would be provided only if the dealer granted GM site control over the facility for 25 years. From the perspective of the manufacturer, site control is important because it enables the manufacturer to maintain control in a territory it deems acceptable. From the perspective of the dealer, site control is the relinquishment of a valuable property right which leaves the dealer subject to the whims of the manufacturer. The FPA now acknowledges the dealer’s valuable property rights and, therefore, prohibits site control unless and until the dealer agrees to the site control and re- ceives valuable consideration for agreeing to forego his valuable rights vis-a-vis site control. Section 7.4(k) forbids the manu- facturer from requiring, or attempting to require, a dealer “or the owner or landlord of property on which a motor vehicle fran- chise is operated” to give the manufacturer “an interest in or option with respect to the real property on which the motor vehicle franchise is operated.” Section 7.4(k) also forbids the manufacturer from restricting the uses to which the dealer’s facility “may be put during or after the term of the fran- chise.” Further, Section 7.4(k) forbids the manufacturer fromwithholding or threat- ening to withhold “any action, impose or threaten to impose any penalty, or deny or threaten to deny any benefit, as a result of the failure or refusal of a motor vehicle franchisee, property owner, or landlord to agree to or comply with any such demand or restriction.” Finally, Section 7.4(k) permits the dealer, or his landlord, to re- linquish site control by way of a voluntary agreement and receipt of a separate and valuable consideration for said site control. In conclusion, dealers may, under certain circumstances, create a “dual” situation at their premises, and, if the manufacturer wants site control, it must pay for it. The moral of the story: remember that New Jersey’s FPA overrides any provisions in your Dealer Sales and Service Agreement which are not consistent with the FPA. It is important that you consult with your attorney before executing any documents with the manufacturer, facility related or otherwise. Theodore “Ted” Schiller, Esq. is a partner and Thomas G. Russomano, Esq. is an attorney with the law fi rm of Schiller & Pittenger, P.C. They can be reached at 908- 490-0444 or via email at ted@carlawyernj.com and tgr@sp-lawyers.com.