A. It is unlawful to, directly or indirectly, impose unreasonable restrictions on the motor vehicle dealer or franchise relative to transfer, sale, right to renew, termination discipline, noncompetitive covenants, site-control whether by sublease, collateral pledge of lease or otherwise, right of first refusal to purchase, option to purchase, compliance with subjective standards and assertion of legal or equitable rights.

B. Unless a separate agreement lasting no more than fifteen years has been voluntarily entered into for separate consideration, it is unlawful to, directly or indirectly, require a site control agreement or exclusive use agreement as a condition of:

(1) awarding a franchise to a prospective motor vehicle dealer;

(2) adding a line make or franchise to an existing dealer;

(3) renewing the franchise of an existing dealer;

(4) approving the relocation of an existing dealer's facility; or

(5) approving the sale or transfer of ownership of a franchise.

C. As used in this section, "site control agreement" or "exclusive use agreement" means any agreement that has the effect of:

(1) requiring a dealer to establish or maintain exclusive dealership facilities;

(2) restricting the ability of a dealer or a dealer's lessor to transfer, sell, lease or change the use of the dealership premises; or

(3) preventing or attempting to prevent a dealer from acquiring, adding or maintaining a sales or service operation for another line make of motor vehicles at the same or expanded facility at which the dealer currently operates a dealership, provided that the dealer complies with any reasonable facilities requirements of the manufacturer, successor manufacturer or distributor.

History: 1953 Comp., § 64-37-8, enacted by Laws 1973, ch. 6, § 8; 2010, ch. 38, § 2; 2010, ch. 40, § 2.

The 2010 amendment, effective March 8, 2010, in the catchline, after "unreasonable restrictions;", added "site control agreements; exclusive use agreements"; in Subsection A, at the beginning of the sentence, changed "It shall be unlawful to impose unreasonable restrictions" to "It is unlawful to, directly or indirectly, impose unreasonable restrictions"; and added Subsections B and C.

Laws 2010, ch. 38, § 2 and Laws 2010, ch. 40, § 2 enacted identical amendments to this section. The section was set out as amended by Laws 2010, ch. 40, § 2. See 12-1-8 NMSA 1978.

Inapplicable to prospective franchisees. — This article does not govern manufacturers' dealings with prospective franchisees, nor does it provide in explicit terms protection for that class. Key v. Chrysler Motors Corp., 1996-NMSC-038, 121 N.M. 764, 918 P.2d 350.