Section 45.25.150. Required compensation for new motor vehicle dealer facilities.

   (a) Upon termination by the manufacturer or distributor, the manufacturer or distributor shall compensate the new motor vehicle dealer for new motor vehicle dealer facilities a sum equivalent to the
        (1) rent for the unexpired term of the lease or 18 months, whichever period is shorter, if the new motor vehicle dealer is leasing the new motor vehicle dealership facilities from a lessor other than the manufacturer or distributor; or
        (2) reasonable rental value of the new motor vehicle dealership facilities for 18 months or until the facilities are leased or sold, whichever period is shorter, if the new motor vehicle dealer owns the new motor vehicle dealership facilities; the sum may be paid in monthly installments at the election of the manufacturer or distributor.
   (b) This section does not relieve a new motor vehicle dealer of the obligation to mitigate damages under a lease, prevent a manufacturer from occupying and using the new motor vehicle dealer's facilities while paying rent, or preclude a manufacturer from negotiating a lease termination, sublease, or new lease.
   (c) This section does not apply to a termination for
        (1) insolvency of the new motor vehicle dealer or the filing of any petition by or against the new motor vehicle dealer under a bankruptcy or receivership law;
        (2) failure of the new motor vehicle dealer to conduct its customary sales and service operations during its customary business hours for seven consecutive business days;
        (3) conviction of the new motor vehicle dealer or its principal owners of a felony or a misdemeanor regardless of the punishment if the crime involves theft, dishonesty, or false statement;
        (4) revocation of a license required for the new motor vehicle dealer to operate; or
        (5) a fraudulent misrepresentation by the new motor vehicle dealer to the manufacturer or distributor that is material to the new motor vehicle dealer's agreement.
   (d) The payment required under (a) of this section is only required to the extent that the facilities were used for activities under the franchise agreement and only to the extent the facilities were not leased for unrelated purposes.
   (e) If payment under (a) of this section is made, the manufacturer or distributor is entitled to possession and use of the new motor vehicle dealership facilities for the period for which the payment is paid.

Authorities

45.25.990

Notes

Recent Bills that will modify this

HB 318 MOTOR VEHICLE DEALER FRANCHISES
SB 197 MOTOR VEHICLE DEALER FRANCHISES

References

AS 45.25.990 Definitions.

History

(Sec. 9 ch 79 SLA 2002)