New Jersey Auto Industry Alert: COVID-19 Update
December 17, 2020
LEGISLATIVE UPDATE: BILL ADVANCES FORMALLY ALLOWING DEALERS TO CONDUCT ONLINE RETAIL SALES
Assembly Bill A5033, which expressly authorizes online retail vehicle sales and use of electronic signatures in retail vehicle sales, was unanimously passed by the New Assembly Transportation and Independent Authorities Committee on December 10, 2020. The bill has not yet been scheduled for a vote by the General Assembly. A corresponding bill was introduced into the New Jersey Senate on December 14, 2020 and referred to the Senate Transportation Committee.
The bill also (1) clarifies that only licensed new and used dealers would be permitted to sell motor vehicles online, (2) prohibits the Motor Vehicle Commission from requiring a notarized signature of any transaction documents, and (3) clarifies existing requirements for new and used dealers. Early on in the pandemic all New Jersey non-essential retail businesses, which at that time included dealerships, were ordered closed by Executive Order of the Governor and Administrative Order of the State Police Commissioner. Prior to dealers being allowed to reopen for in person retail sales, Administrative Order No. 2020-6 was issued on March 30, 2020 acknowledging that online retail transactions are permitted. The order stated, “car dealers may continue to conduct online sales or remote sales that can be completed by phone, text, or email, and are consistent with current law. Such sales shall be deemed permissible in accordance with paragraph 6 of Executive Order No. 107. In the event of such a sale, the car may be delivered to the purchaser or the purchaser can pick up the car curbside or in the dealership service lane. Picking up a car from a dealership shall be considered essential retail business for the purposes of paragraph 6 of Executive Order No. 107.”
If A5033 becomes law it would formally allow motor vehicle sales to be conducted fully online. The Motor Vehicle Commission would also be required to accept documents signed via e-signature consistent with the Uniform Electronic Transactions Act. For now, under a bill signed into law on April 14, 2020, remote notarizations are permitted in New Jersey during the pandemic provided certain conditions are satisfied. However, the law expires with the expiration of Governor Murphy’s Executive Order declaring a State of Emergency and Public Health Emergency. There are currently bills in the legislature that would authorize remote notarizations on a permanent basis.
COMPLIANCE TIP: CONDUCTING RETAIL VEHICLE SALES WITHOUT TITLES PRESENT DURING THE PANDEMIC
Dealers may continue to face delays for the remainder of the pandemic from the New Jersey Motor Vehicle Commission in processing titles. In order to compensate for these delays, this is a reminder that dealers can engage in retail sales without a title present provided the dealership satisfies all liens on the title, has right to the title at the time of sale and provides written confirmation of the information to a consumer. The Motor Vehicle Commission has a form to deal with this situation but its use is not mandatory. Best practices suggest that new and used dealers use the form, which can be found at https://www.state.nj.us/mvcbiz/pdf/Business_Licenses/statement.pdf. A violation of the disclosure requirement could result in the Commission imposing a fine, suspension or in a worst-case scenario loss of license.
This NJ Auto Industry Alert is intended to keep readers current on developments in the law. It is not intended to be legal advice. If you have any questions, please contact author Tony Bush at (609) 989‐5056 or firstname.lastname@example.org, or any other attorney at Eckert Seamans with whom you have been working.