2023 Tennessee Code › Title 55 - MOTOR AND OTHER VEHICLES (§§ 55-1-101 — 55-53-105) › Chapter 17 - VEHICLE SALES LICENSES (§§ 55-17-101 — 55-17-419) › Part 4 (§§ 55-17-401 — 55-17-419) › Section 55-17-408 - Grounds for denial of application for license or revocation or suspension of license

(a)
The commission may deny any application for a license or revoke or suspend any license after it has been issued upon finding that:
(1)
The applicant or license holder was previously the holder of a license issued under this part or part 1 of this chapter, which license was revoked for cause and never reissued by the commission, or which license was suspended for cause and the terms of suspension have not been fulfilled;
(2)
The applicant or license holder was previously a partner, stockholder, director, or officer controlling or managing a partnership or corporation whose license issued under this part or part 1 of this chapter was revoked for cause and never reissued or was suspended for cause and the terms of the suspension have not been terminated;
(3)
The licensee or applicant has been convicted of a crime of moral turpitude and fewer than five (5) years have passed since the licensee or applicant has completed serving the licensee's or applicant's sentence, including parole or probation, whichever is later;
(4)
The applicant or license holder has filed an application for a license that as of its effective date was incomplete in any material respect or contained any statement that was, in light of the circumstances under which it was made, false or misleading with respect to any material fact;
(5)
The applicant or license holder has willfully and continually failed to pay the proper application or license fee;
(6)
The applicant or license holder has practiced fraud in the conduct of business; or
(7)
(A)
The license holder has failed to return to a customer any parts that were removed from the recreational vehicle and replaced during the process of repair if the customer, at the time repair work was authorized, requested return of the parts; provided, that any part retained by the license holder as part of a trade-in agreement or core charge agreement for a reconditioned part need not be returned to the customer unless the customer agrees to pay the license holder the additional core charge or other trade-in fee; and provided further, that any part required to be returned to a manufacturer or distributor under a warranty agreement or any part required by any federal or state statute, rule or regulation, or local ordinance to be disposed of by the license holder need not be returned to the customer;
(B)
The license holder has failed to permit inspection of any parts retained by the license holder if the customer, at the time repair work was authorized, expressed the customer's desire to inspect the parts; provided, that if, after inspection, the customer requests return of the parts, the restrictions set forth in subdivision (a)(7)(A) shall apply;
(C)
The license holder has failed to post in a prominent location notice of this subdivision (a)(7); or
(D)
The license holder has failed to print on the repair contract notice of this subdivision (a)(7).
(b)
The license holder need not retain any parts not returned to the customer after the recreational vehicle has been returned to the customer.
(c)
In addition to the grounds contained in subdivisions (a)(1)-(7), the commission may deny an application for a license or revoke or suspend the license of a recreational vehicle dealer or salesperson who:
(1)
Has required the purchaser of a recreational vehicle, as a condition of sale and delivery of the vehicle, to also purchase special features, appliances, accessories, or equipment not desired or requested by the purchaser unless the features, appliances, accessories, or equipment are the type that are ordinarily installed on the vehicle by the manufacturer or distributor when the recreational vehicle is received or acquired by the dealer;
(2)
Has represented or sold as a new or unused recreational vehicle any recreational vehicle that has been operated for demonstration purposes or that is otherwise a used recreational vehicle;
(3)
Has sold or offered for sale as a new or unused recreational vehicle any recreational vehicle for which the dealer or salesperson cannot secure for the purchaser of the recreational vehicle such new recreational vehicle warranty as may be extended by the manufacturer of the vehicle to purchasers of one (1) of the manufacturer's new recreational vehicles unless the fact that the vehicle is being sold without a manufacturer's warranty is communicated to the purchaser and disclosed prominently in writing on the bill of sale;
(4)
Has no established place of business that is used or will be used primarily for the purpose of selling, buying, displaying, repairing, or servicing recreational vehicles;
(5)
Resorts to or uses false or misleading representations in connection with that person's business as a recreational vehicle dealer or salesperson; provided, that dealers are specifically authorized to charge a document preparation fee, processing fee, or servicing fee in addition to the sales price of the recreational vehicle and these fees shall not be deemed to be a false or misleading representation made in connection with the sale of a recreational vehicle, nor a violation of the Tennessee Consumer Protection Act of 1977, compiled in title 47, chapter 18, part 1; and provided, further, that the amount of these fees is separately stated and clearly and conspicuously disclosed on the face of the sales contract or buyer's invoice prior to the buyer's execution of the contract or invoice. For purposes of this subdivision (c)(5), the disclosure shall be deemed to be conspicuous if it is listed on the contract or invoice in the same place and manner and in type face no smaller or less obvious than the other type face used in the contract or invoice with respect to other charges listed, and shall be deemed to be clear if it states that the charge is a fee for document preparation, processing, or servicing, or language or abbreviations to the same or a similar effect. The authorization provided by this subdivision (c)(5) shall not apply if the recreational vehicle dealer represents to the buyer that the fee is required by or will be paid to any governmental agency or entity;
(6)
Gives false or fictitious names or addresses for the purpose of registering the sale of a recreational vehicle or who makes application for the registration of a recreational vehicle in the name of any person other than the true owner;
(7)
Employs any person who has not been licensed as a motor vehicle salesperson;
(8)
Fails to reasonably supervise agents, salespersons, or employees;
(9)
Uses or permits the use of special license plates assigned to that person for any purpose other than those permitted by law;
(10)
Disconnects, turns back, or resets the odometer of any motor home as defined in §
55-28-102
, in violation of state or federal law, except as provided for in §
39-14-132(b)
;
(11)
Commits any act or practice involving the purchase, sale, repair, or servicing of a recreational vehicle or the parts or accessories of a recreational vehicle, that, in the opinion of the commission, is false, fraudulent, or deceptive;
(12)
Increases the price of a new recreational vehicle to a retail customer after the recreational vehicle dealer has accepted an order of purchase or a contract from a buyer, except that a trade-in may be reappraised if it subsequently suffered damage, or parts or accessories have been removed or if the trade-in is not in the condition described by the consumer prior to the dealer seeing or evaluating the trade-in and the original sales price was based on the consumer's description of the trade-in. Price differences applicable to new models or a new series of recreational vehicles at the time of the introduction of new models or new series shall not be considered a price increase or price decrease;
(13)
Sold, or offered for sale, a recreational vehicle without the recreational vehicle being manufactured in accordance with the NFPA 1192 - 2015 Standard for Recreational Vehicles;
(14)
Possesses any certificate of title that is not a closed title, unless the recreational vehicle dealer maintains an executed consignment form developed by the commission on each recreational vehicle that does not have a closed title;
(15)
Issues more temporary plates than allowed by law or fails to maintain a record of the issuance of temporary plates;
(16)
Engaged in curbstoning, as defined in §
55-31-102
; or
(17)
Violated any provision of chapter 28 of this title as evidenced by an order from a court of competent jurisdiction stating the specific sections violated and facts supporting such violations.
(d)
Whenever any licensee pleads guilty or is convicted of the offense of odometer tampering or any other criminal offense involving moral turpitude, the licensee, within sixty (60) days, shall notify the commission and provide the commission with certified copies of the conviction. The licensee's license shall automatically be revoked sixty (60) days after the guilty plea or conviction unless, during the sixty-day period, the licensee makes a written request to the commission for a hearing. Following the hearing, the commission, in its discretion, may impose upon the licensee any sanction permitted by this part.
(e)
A recreational vehicle dealer shall pay off the agreed upon indebtedness on the trade-in vehicle within thirty (30) days after the dealer has received actual payment on the financing contract for the new recreational vehicle purchase.
(f)
(1)
Notwithstanding any law to the contrary, the commission may revoke or suspend the license of or levy a civil penalty against any recreational vehicle dealer who, in a recreational vehicle transaction that is conditioned upon final funding to the dealer by a third party financial institution, fails to:
(A)
Provide in writing to the customer the conditional delivery agreement set forth in §
55-17-114(b)(4)(D)
;
(B)
Retain possession of any vehicle used by the consumer as consideration, commonly known as a trade-in vehicle, until the dealer has received funding from the financial institution;
(C)
Allow the consumer to void the motor vehicle transaction if any of the terms of the transaction change after the consumer has approved and accepted the terms; or
(D)
Pay off the agreed upon indebtedness on the trade-in vehicle within thirty (30) days after the dealer has received funding from the financial institution on the financing contract for the new purchase.
(2)
As used in this subsection (f), "funding" means actual payment to the dealer by the financial institution purchasing the financing contract or lease.
(3)
Compliance with this subsection (f) may not be waived by any consumer.
(g)
In addition to the grounds contained in subdivisions (a)(1)-(7), the commission may deny an application for a license, or revoke or suspend the license of a manufacturer or distributor, who has:
(1)
Refused to deliver to any recreational vehicle dealer having a franchise, manufacturer/dealer agreement, or contractual arrangement for the retail sale of new and unused recreational vehicles sold or distributed by the manufacturer any recreational vehicle publicly advertised for immediate delivery within sixty (60) days after the dealer's order has been received;
(2)
Obtained money, goods, services, or any other benefit from any other person with whom the recreational vehicle dealer does business, on account of, or in relation to, the transaction between the dealer and such other person, other than for compensation for services rendered, unless the benefit is promptly accounted for, and transmitted to the dealer;
(3)
Increased prices of recreational vehicles that the recreational vehicle dealer has ordered but not delivered for private retail customers prior to the dealer's receipt of the written official price increase notification. A sales contract by a private retail customer shall constitute evidence of each such order. In the event of manufacturer price reductions, the amount of any reduction received by a recreational vehicle dealer shall be passed on to the private retail customer by the recreational vehicle dealer if the retail price was negotiated on the basis of the previous higher price to the recreational vehicle dealer. A price reduction shall apply to all recreational vehicles in the dealer's inventory that are subject to the price reduction. Price differences applicable to new models or a new series of recreational vehicles at the time of the introduction of new models or new series shall not be considered a price increase or price decrease. This subsection (f) shall not apply to price changes caused by either:
(A)
The addition to a recreational vehicle of required or optional equipment pursuant to state or federal law; or
(B)
Revaluation of the United States dollar in the case of foreign-made vehicles;
(4)
Failed to pay a recreational vehicle dealer, within a reasonable time following receipt of a valid claim by a recreational vehicle dealer thereof, any payment agreed to be made by the manufacturer to the recreational vehicle dealer by reason of the fact that a new vehicle of a prior year model is in the dealer's inventory at the time of introduction of new model recreational vehicles;
(5)
Offered any refunds or other types of inducements to any person for the purchase of new recreational vehicles of a certain line-make to be sold to the state or any political subdivision thereof or to any other person without making the same offer to all other recreational vehicle dealers in the same line-make within the state;
(6)
Employed any person as a representative who has not been licensed pursuant to this part;
(7)
Sold recreational vehicles to persons not licensed under this part as recreational vehicle dealers;
(8)
Coerced or attempted to coerce any recreational vehicle dealer to accept delivery of any recreational vehicle or recreational vehicles, appliances, equipment, parts, tools, or accessories, or any other commodity or commodities that have not been voluntarily ordered by the dealer;
(9)
Coerced or attempted to coerce any recreational vehicle dealer to contribute or pay money or anything of value into any cooperative or other advertising program or fund;
(10)
Coerced or attempted to coerce any recreational vehicle dealer to engage in any business pursuit that is not directly related to the sale of recreational vehicles as defined by the commission;
(11)
Sold, or offered for sale, a recreational vehicle without the recreational vehicle being manufactured in accordance with the NFPA 1192 - 2015 Standard for Recreational Vehicles; or
(12)
Violated any provision of chapter 28 of this title as evidenced by an order from a court of competent jurisdiction stating the specific provisions violated and facts supporting such violations.
(h)
The commission may revoke or suspend any license that the commission has issued upon finding that the licensee has not maintained any of the requirements for issuance of such license.
Amended by 2024 Tenn. Acts, ch. 1017,s 9, eff. 7/1/2024.
Added by 2016 Tenn. Acts, ch. 781, s 10, eff. 1/1/2017.