Pub. 1 2019-20 Issue 1

http://wvcar.com 22 WVADA By Johnnie E. Brown, Pullin, Fowler, Flanagan, Brown & Poe, PLLC W elcome to the first ad- dition of Counselor’s Corner. With this quar- terly article, it is my goal to keep you ap- prised of new legal trends and how to protect yourself against those old pes- ky challenges. But, let’s start Counsel- or’s Corner on a positive note. For our inaugural issue, I would like to address two successes that have occurred this year. First, let’s discuss the new West Virginia “as-is” law, and then we will review the increase of West Virginia’s documentary fee. The statutory change to allow West Vir- ginia dealers to sale “as-is” brings our law in line with the states around us, which have allowed “as-is” sales of mo- tor vehicles for decades. However, keep in mind that West Virginia’s version of “as-is” is more limited, and has more re- quirements to meet. Despite this, still a positive change. Likewise, the modest increase in West Virginia’s documentary fee brings West Virginia dealers closer to the amount charged by dealers in neighboring states, which have been using the fee to create an unfair business advantage. This has caused consumers to leave our state un- der the perception that they are saving money. We are moving in the right direc- tion to level the playing field. Back to our “as-is” statute, while train- ing was provided on “as-is” at our recent Annual Family Convention, many of the dealers were unable to attend. Just a reminder that the West Virginia Auto- mobile Dealers Association has forms which have been prepared by the Asso- ciation’s partner and sponsor, Reynolds & Reynolds, and my PowerPoint training on “as-is” is posted on the Association’s website. I had the opportunity to draft and approve these forms for Reynolds & Reynolds which were introduced at the Convention. These documents, when used properly, will help properly dis- close all the requirements in order to sell “as-is” in West Virginia. Remember “as-is” only applies to five sit- uations: (1) vehicles which are inoperable or a total loss, (2) custom-built or modi- fied for show purposes or racing, (3) vehi- cles sold for less than $4,000, (4) vehicles drivenmore than 100,000miles, or (5) ve- hicles seven years of age or older. You do not have to sell these types of cars “as-is” but they are eligible. If the car meets one of those requirements and you wish to sell the car “as-is,” remember that there is a statutory disclosure which needs to be provided to the consumer. Please con- sider this to be the first disclosure to be signed on an “as-is” sale. THIS VEHICLE IS SOLD “AS-IS.” THIS MEANS THAT YOU WILL LOSE YOUR IMPLIED WARRANTIES. YOU WILL HAVE TO PAY FOR ANY REPAIRS NEEDED AFTER THE SALE. IF WE HAVE MADE ANY PROMISES TO YOU, THE LAW SAYS WE MUST KEEP OUR PROMISES EVEN IF WE SELL AS “AS-IS.” TO PROTECT YOURSELF, ASK US TO PUT ALL PROMISES IN WRIT- ING. YOU MAY HAVE THE RIGHT TO CANCEL THIS SALE BY THE END OF DEALER’S THIRD BUSINESS DAY FOL- LOWING THE SALE IF THE VEHICLE HAS SIGNIFICANT MECHANICAL IS- SUE THAT CAN BE REASONABLY BE EXPECTED TO HAVE EXISTED AT THE TIME OF THE SALE. I encourage you to use the Reynolds & Reynolds disclosure forms if any vehicles are sold “as-is” and remember that the buyer does have a right until the third business day following the sale to return the vehicle. However, this consumer right exists based upon any significantmechan- ical issue which existed at the time of the “as-is” sale for only vehicles sold based upon price, mileage, or age. This three business day right-of-return does not ex- ist for vehicles that are sold as inoperable and a total loss, and custom-built or mod- ified for show purposes or racing. Fur- thermore, for vehicles sold “as-is” based upon price, mileage, or age, I do ask that you consider making sure the vehicle will pass a West Virginia safety inspection, and also disclose any mechanical or oper- ational defect that you would reasonably be able to determine about the motor vehicle. By using the prepared Reynolds & Reynolds form to disclose known vehi- cle mechanical issues, you protect your- self against facing the consumer right to return and the creation of any accidental implied warranties of merchantability. Turning to our documentary fee, con- gratulations to the Association’s Presi- dent, Jared Wyrick, for his success with the Division of Motor Vehicle to allow us a modest increase of the documentary fee from $175 to $250. This has not changed since approximately 2011. However, when disclosing the documentary fee during a motor vehicle sale, please remember not to represent that the documentary fee is a State mandated fee . Allowme to be clear, it is not. The dealer is allowed to charge up to $250, however, the documentary fee can be lower, or zero, i.e., a dealer’s busi- ness decision. All cash or credit customers must be treated equally, meaning they are to be charged the same documentary fee For a Change: Good News COUNSELOR’S CORNER: