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This article is the first of a trilogy of articles on the control of the site.
An understanding of site control, sometimes called “point protection” is important as regards the intended use of the dealership property and it becomes very important if the grantee has failed to succeed. [A "point" is a place where a manufacturer or distributor (hereinafter collectively the "manufacturer" or "plant") has or wants a distributor.]
As explained below, there are many ways to control the site. There is a difference, however, between the site control is applied to non-franchise real estate and control of the site for new car dealers. Because many forms and because of the difference with respect to car dealers, it would be a mistake to generalize and say that the control of the site itself is neither good nor bad. Each case must be evaluated individually.
A pre-emptive rights almost always chills the ability of an owner to sell the property. The theory is that the buyer of third parties would not be so easily inclined to spend time, money and energy to write an offer on the property, knowing that the tenant has the right to accept the offer and get the benefit of others seeking and negotiating for the option holder exercises the option.
In the case of a sale of a car dealership, this statement is rarely true.
BACKGROUND
While control of the site has been for decades, rising property prices in the years 1970 and 1980 saw many dealers to sell their services metropolitan what seemed then to be astronomical sums. Properties in fact, purchase or construction of hundreds of thousands of dollars in the 1940′s, 50 and 60 years were, in the 1970′s, selling millions.

As real estate prices higher, as the cost of replacement of facilities and manufacturers are struggling to find distributors to invest in several of these areas.
Therefore, the control site in the mid 1980′s began to emerge first in sales and contract manufacturing services.
For a short period in the 1980′s, there was a conflict between the dealers and Chrysler Realty Corporation (real estate), when Chrysler sold properties independently and not on their own, ABKO.
The situation in the 1980′s was an anomaly, and since Chrysler bought ABKO real estate, all real estate companies factories were owned factories, whose objective is to support our distributors.
In the mid 1980′s, when some plants have started to include pre-emption rights in its services and sales, most people thought that the restrictions affect the price of dealer sales and installations of the prospects cooling and decreased supply.
In the decade of 1990, each manufacturer’s sales and service agreement established a right of first refusal and, at the turn of the century, nobody thought anything.
In 2000, retailers have discovered that the manufacturer’s right of first refusal had absolutely no effect on the price of dealer sales and installations.
In the past 20 years, we have never seen or heard of a case where a dealer has sold and the dealer has received less blue sky because of site control, or the purchase price of the installation has been excluded for reasons of site control .
Even in the few cases where plants have exercised their options, we have never heard of a case in which there was a “reduced rate” for the right of first refusal.
In general, the factory, which is the exercise of the right hand and all existing contracts to a provider of their choice and the new concessionaire pays full retail for retail and real estate.
Here is an example of the wording of the sales of Mercedes-Benz USA and service contracts:
IX. TRANSFERS
B. Right of first refusal or OPTION TO BUY
1. Rights Granted
If the proposal to sell the major assets of the concessionaire or the transfer of majority stake in the concessionaire is subject to Mbusa distributor, or in case of death of the majority owner of the dealership, MBUSA has a right of first refusal or option to purchase those property or property rights, including rights to lease of real property. MBUSA to the right or option under this section replaces dealer IX.B right to transfer ownership or grant. MBUSA right or option may be assigned to the third MBUSA and hereby guarantee full payment of the corridors of the purchase price by the transferee as …. [Emphasis added.]
….
4. Option
In the case of death of the owner or dealer submits a proposal that most determines MBUSA is not in good faith or good faith, MBUSA has the option to purchase the principal assets of Dealer Dealer used in operations, including real estate and lease, and to terminate this Agreement and the rights granted by the dealer. The purchase price of the assets of the grant will be determined by negotiations in good faith between the parties. [Emphasis added.]
Here is an example of the development of General Motors Sales and Service Agreement:
12.3 The right of first refusal to buy
12.3.1 Creating and coverage
If the licensee submits a proposed change of ownership under Article 12.2, General Motors has a right of first refusal to acquire the assets or stock award and other rights proposed for transfer, regardless of whether the proposed buyer is qualified to be a distributor.
12.3.2 buying and selling rates of other terns
(A) Agreement in good faith
If the dealer has entered a good deal in good faith in writing / sale, the purchase price and other terms of sale are set out in this contract and related documents, unless Broker and General Motors agreed to other terms. ….
12.3.3 fullness
Dealer agrees to transfer the property by warranty deed, if the title is possible, commercial transportation free of liens and other encumbrances. Warranty Deed will be in good and due form for recording and dealers must deliver full possession of the property when the deed is issued. The dealer also must provide copies of any easement, license or other documents relating to property and the granting of permits or licenses required to operate the dealership.
A number of factories, including providing sales and service contracts back from the buyer’s perspective if the plant has exercised its option. The following are examples of Mercedes and Ford sales and service agreements:
U.S. Mercedes-Benz sales and service
IX. B. 3. Emptive rights.
If, upon exercise of the right of first refusal MBUSA, the distributor is contractually obliged to reimburse the original purchaser of reasonable attorneys’ fees, broker fees, title searches, inspections of property and other costs and expenses that the Buyer incurred in connection with the agreement of purchase / sale, MBUSA dealer to pay such costs and fees in an amount up to but not greater than fifty thousand dollars ($ 50,000.00). MBUSA dealer must submit all documentation supporting these costs and fees MBUSA may reasonably request.
Sales of Ford Motor Company and the Service
24. Company law (b) of first refusal to buy.
(6) The Company will pay the reasonable expenses, including attorney’s fees not exceeding the usual rates, customary and reasonable fees charged for similar work for other clients, incurred by the new project leaders and the transferee before the right of the Company’s refusal in the negotiation and execution of the contract for the proposed sale or transfer of assets of the distributor or dealer.
DEFINITION OF CONTROL car site
Site control is when a provider of subsidies to a manufacturer, your real estate company or finance company the right to decide to use a real estate license.
In general, control of media room for the duration of the agreement, the interest of a provider of services and real estate grant can not be sold, leased, assigned or encumbered in any way without written consent from the factory or his representative, whose consent must be obtained in order before the property can be used for purposes other than those of a new car dealership, including the manufacturer has control.
In general, control of the site not only for a period of time, but can also be determined by a rent or a car brand, or any combination thereof.
There are advantages and disadvantages of being taxed by a room control system.
Site control may affect the rental value of property in several ways:
1. value of the loan. One may find more difficult to obtain a second mortgage if the property appreciates in value and the rent is fixed at a certain speed for a number of years.
The difficulty, if any, will depend on several factors. For example, the strength of the business which the property could play an important role, as the will of the entity that owns the site control to accept a change in the rent.
By contrast, the control of the site could be an advantage, when financing a home. A distributor may qualify for a loan that would otherwise be impossible to achieve without control of the site. Show: Beaudry Motor Company / ABKO, Chrysler Corporation and Chrysler Realty Corporation, 780 F.2d 751, 4 Fed.R.Serv.3d 142 (1986), where a dealer can not get a loan without interest to control the site.
2. rental value. If the dealer is terminated or expires, in most cases the factory has the right to rent the facility for a specified period and a specified rent. In the 1980′s, there were some cases where the insolvent dealers offers received from the factories of competitors for the purchase of the dealership. If a plant site gunsmith control, supply could not have been amused that the facilities were in areas desirable and General Motors may not have consented that their facilities are distributors for a competing brand. The mere fact that these offers can be fun, it increases the value of the building, which brought in the bids, the strong buyers.
On the other hand, if a vendor is not in your company, the factory can (a) continue to rent his property, thus creating equity for the merchant of age, (b) make the control room for the dealer so that he do you want to own property, or (c) the acquisition of property by the concessionaire. In many cases, a cold housing market (in the 1980 mid-1990 and the era after 2008), the plant is the only legitimate purchaser of this property for special purposes. Until 2008, 2009 and 2010 there was an excess of vacancies distributors throughout the United States.
3. The resale value. Again, in the decade of 1980, there were instances where dealers have purchase offers real-owned franchise buyers unrelated to the car but were unable to accept because the plant was recorded points.
Today, however, most use restrictions imposed by the public and private entities to limit the use of the facilities granted to new car dealers.
Operating Limits
Clearly a single point distributor plans to double with another manufacturer, it will require prior written approval of the manufacturer with the right to control the site. In addition, a distributor of the chain (which owns several brands licenses) would require the consent of the manufacturer before the reorganization of the plate with the name and facilities.
Two things that have significantly altered the effects of site control in the 21 st century, however, are:
(A) the city government and attitudes Auto Mall Association. In 2010, if a property is used for a new car dealership, it is likely that a new car dealership. Several traders have moved to “self center” where the two zoning ordinances, the center of self association by laws and CC & R (covenants conditions and restrictions) to prohibit the properties to be used as a dealer cars, even if the plant is in control of the site.
See, for example, the Elk Grove City Council Staff Report of August 26, 2009, prepared by Heather Ross, Senior Management Analyst, reported that the city and the center of the auto association to restrict the use of the property dealer .
Locally, the lots are zoned AC Automall (motor trade) and can be used for “the motor vehicle sales, rental, repair and maintenance. Other possible uses that require a zone change …. The current restriction of use is also specified in the design guidelines Elk Grove Automall, so a change to the text of this document would also be necessary. It can also be restrictive covenants governing the use of the properties that car owners would be addressed.
In some states, like Texas and Colorado, sales tax car sales mainly the city of residence of the buyer. In others, like California, however, sales taxes go mostly to the city where the dealer resides.
On June 6, 1978, the citizens of California passed “Proposition 13, which limits the amount of property taxes cities can charge their citizens. The proposal has been held constitutional by the Supreme Court of the United States in the case of Nordlinger v Hahn, 505 U.S. 1 (1992) and one of the cities of California in the early to mid 1990 he began to feel the economic effects of Proposition 13 restrictions on property taxes.
Consequently, cities have tried to limit the current franchise properties dealer use only because the money raised from sales tax are generally the dealers car dealerships, the most important source of revenue for the city.
The Oakland Tribune reported how the “steady stream of income” supplies new car dealers in 50 percent of sales … City officials sales tax each year, but the city is worried about his future. The article goes on to quote the Burlingame city manager as saying: “My concern is how to keep these (auto dealerships) viable long term …” Most importantly, it conveys the intention of cities to limit property dealer dealers to use. Auto dealers “in the California unit sit on prime real estate on the peninsula Howard tract. auto dealers have been El Salvador in the city where hotels relieved after September 11, 2001,” said Councillor Rosalie O ‘Mahony . “[Emphasis added].” We definitely need more car dealers to any company in the city, “he said. May 6, 2006.
See also: The Sacramento Business Journal, March 14, 2008, where members have been the center of oneself against the use of property in the center of cars to sell used cars if the company was part of a dealer new cars.
“It’s (a used car park) is not something we like to see,” said Maggie Tadlock, president of the Elk Grove Auto Mall …. Used car sales only “very different from our expectations for the shopping center” and “pay what you’re trying to do” the mall of the car.
Throughout the first decade of the 21st century, a large number of articles have been written about the tax, cities and dealers. See, for example: San Francisco Business Times, November 23, 2003, The Palo Alto Weekly June 2, 2004, Palo Alto Weekly September 21, 2005, The Contra Costa Times, January 12, 2006, Los Gatos Weekly Times, 29 March 2006, Sacramento Bee March 10, 2007, The Oakland Tribune January 2, 2008 and Ward brokerage business, April 1, 2009.
All the above items have the same issues: (a) the number of auto dealers are for cities, and (b) prohibit cities from granting property to be used for anything other than car dealers.
(B) state law. On March 22, 2010 Donna Harris reported that there are currently forty states whose laws exemption was proposed in 2009 and 2010. Automotive News.
Even with the restrictions of many state laws require site control is important to remember that it is harder to challenge the control site, if the dealer has been offset by the factory – and plants in general, that all dealers are compensated. A universal claim of a quid pro quo is the provision of sales and service contract sales of the brand of the car factory.
(C) of the federal law. “Agents of Law Day in Court” Federal law (U.S. Code, tit. 15, § 1221)
Juan Pico, a retired lawyer from lenders and brokers, is the managing partner of the Automobile Dealers Adviser LLC, a brokerage firm out of law does not refer to buying and selling industry in positions of trust and recovery. His firm also provides litigation support and advice in relation to most dealers, including fraud and embezzlement. During the past 40 years has conducted more than 1,000 operations grant and has published several books and numerous articles on industry practice and is a member of the panel of speakers.