22 January, 2009

Emergency Regulations for District’s Used Car Dealerships

Mayor Fenty Announces Emergency Regulations for District’s Used Car Dealerships

Contact: Feras Sleiman, (202) 251-8829
Michael Rupert, (202) 437-1024

WASHINGTON, DC - Mayor Adrian M. Fenty today announced new emergency regulations intended to permanently address threats to public health, safety, and comfort posed by the District’s used car lots, including criminal activity, rodent harborages, and environmental hazards.

Fenty, joined by Attorney General Peter J. Nickles and Department of Consumer and Regulatory Affairs (DCRA) Director Linda K. Argo, said these new regulations will once again allow the city’s commercial corridors to thrive.

“We will not allow our neighborhoods and our commercial corridors to continue serving as junkyards for dealers who contribute little or nothing to the District’s economy,” Fenty said. “These new regulations will go a long way to bringing this industry under control for the first time in decades.”

The emergency regulations, which became effective December 23, 2008, and were published in the District of Columbia Register on January 2, 2009, strengthen the business licensing requirements for dealers and salespersons, limit the number of vehicles that can be stored outdoors in commercial zones, require a permanent structure on all lots, and limit the number of salesmen based on the size of the lot, among others.

Fenty’s announcement follows a two-month citywide sweep of more than 200 used car dealers across the city. Since Fenty announced the crackdown on November 17, the Department of Consumer and Regulatory Affairs has so far suspended the licenses of 27 dealers and the Department of Public Works has towed a total of 424 vehicles.

“This underground industry has gone essentially unregulated for years,” Nickles said. “We are cleaning up this mess lot by lot.”

DCRA will immediately begin reaching out to dealers and the public to inform them of the new regulations and encourage voluntary compliance, Argo said.

DCRA will commence enforcement of the regulations against car lot operators on March 2, 2009.

“We will continue to welcome businesses that serve the needs of the consumers and residents of the District and add to the vibrancy of our streets,” Argo said. “We now have the legal muscle to make sure people are where they are supposed to be and doing what they’re supposed to be doing so legitimate businesses can thrive.”

New Regulations in Effect:

* Outdoor storage of five or more vehicles now requires the posting of a $100,000 bond. Before the addition of these new regulations, a bond was not required.

* An outdoor car lot with five or more vehicles requires a new kind of license: a basic business license, with a Motor Vehicle Sales, Service, and Repair license endorsement for a Used Car Lot. The fee for this license is $1,000.00, and only one license is available per lot. This license is required in addition to a basic business license, with a Motor Vehicle Sales, Service, and Repair license endorsement, for a Motor Vehicle Dealer. Before the addition of these new regulations, this license was not required.

* Outdoor storage of motor vehicles by used car dealers are now only permitted in Commercial-Light Manufacturing Districts (C-M) and General Industry Districts (M). In all other zoning districts, including Commercial Districts (C-1, C-2, C-3, C-4, and C-5), a used car dealer can keep up to four vehicles outdoors. The dealer must keep all other vehicles inside a permanent garage or permanent building.

* Each outdoor car lot must have an office in a permanent building of at least 250 square feet, with heating, electricity, and a bathroom connected to water and sewer lines.

* New requirements for paving of parking areas, marking of parking spaces, minimum space size, signage, curbing or fencing, and landscaping.

* The regulations also require that lots be open to the public during regular business hours and that most vehicles stored or displayed outdoors be offered for retail sale and display completed Federal Trade Commission Buyers Guides. Outdoor lots may not be used for storage of disassembled or junk vehicles, and any car parts or trash must be kept off the ground in secured containers.

* There will be two new categories of salesmen licenses. Used car dealers who maintain outdoor lots must ensure that all Motor Vehicle Salesman licenses issued for the lot be either “Seller Only” or “Buyer and Seller” licenses. In addition, only one salesman license per 3,000 square feet of lot space may be a “Buyer and Seller” license. All Motor Vehicle Salesman licensees must be employees of the lot’s Motor Vehicle Dealer.

* Dealers need to ensure that at least 70 percent of the motor vehicles stored or displayed at an outdoor car lot are offered for sale and sold at the lot. Vehicle purchase and sale records must be kept on the lot and made available for immediate inspection by DCRA during regular business hours.

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