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Service Compliance

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This presentation was made in 2007.

This presentation was made in 2007.


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  • 1. Colorado Automobile Dealers Association Service Director Legal Compliance Seminar November 2007
  • 2. Colorado Law Related to Service and Repair of Motor Vehicles Presented By: Michael J. Dommermuth of McGloin, Davenport Severson & Snow, P.C.
  • 3. The Motor Vehicle Repair Act Of 1977
  • 4. Motor Vehicle Repair Act of 1977
    • Requires written estimate of costs and consent of consumer.
      • Work Order will include written estimate of cost of repair and estimated completion date-
      • Signed by the customer
    • If no written consent:
      • No repairs can be made.
    • Civil and Criminal Penalties (treble damages and attorney fees)
  • 5. Motor Vehicle Repair Act of 1977 (continued)
    • Statutory Exceptions:
      • After hours or Early Bird Drop Off
      • Tow In
      • Can only charge up to $100
      • Towing charges are exempt from the statutory requirements
  • 6. Motor Vehicle Repair Act of 1977 (Continued)
    • Oral consent is permitted:
      • Work Order:
        • Date
        • Time
        • Manner of consent
        • Telephone number called
        • Name of service technician
        • Amount of the estimate
        • Completion Date
        • Name of person giving consent
    • Document retention – 3 years!
  • 7. Motor Vehicle Repair Act of 1977 (Continued)
    • No estimate required if customer signs and dates:
    • I DO NOT WISH TO RECEIVE ANY ESTIMATE, EITHER WRITTEN OR ORAL, TO WHICH I AM ENTITLED BY LAW, BEFORE REPAIRS ARE AUTHORIZED.
      • Must be CONSPICUOUS
      • Recommended for Early Bird Drop Offs
      • Need a separate statement authorizing repairs
  • 8. Motor Vehicle Repair Act of 1977 (Continued)
    • Disassembly to diagnosis.
      • Estimate must be given for cost of reassembly.
      • Estimate must include costs of any parts destroyed or consumed in disassembly/reassembly process.
      • No act of disassembly shall be undertaken if the vehicle cannot be restored to its pre-disassembly condition unless written consent given by customer.
      • E.g., if it was running before disassembly, it better be running after unless:
      • Written consent from customer acknowledges.
  • 9. Motor Vehicle Repair Act of 1977 (Continued)
    • Post-disassembly estimate:
      • Consent oral
      • Notation on Work Order
      • Date
      • Time
      • Manner of communication
      • Telephone number called
      • Name of service technician
      • Name of person giving consent.
    • Additional Repairs:
      • Again, consent required.
      • Or limited to 10% of original consented amount.
      • Same rules.
  • 10. Motor Vehicle Repair Act of 1977 (Continued)
    • New Completion Date .
      • Must notify customer
      • Within 24 hours of original completion date.
      • If done orally,
        • All requirements.
      • No change in completion date unless customer consents.
      • If consent not given or denied by customer, contract cancelled.
    • If cancelled:
      • Must reassemble without loss to customer.
      • Customer must pay for repairs already completed.
  • 11. Motor Vehicle Repair Act of 1977 (Continued)
    • Repair Cancellation .
      • Can charge for work done up to amount of estimate.
      • Customer can specify reassembly or not.
      • Must complete reassembly within three days.
  • 12.
    • Work order must CONSPICOUSLY state:
    • “ Customer is entitled to the return of the replaced parts if the customer so requests at the time of authorizing the repairs”
    • Exceptions:
    • Body shop parts, exchanged or warranty parts (but customer has right to inspect) and air bag parts
    Motor Vehicle Repair Act of 1977 (Continued)
  • 13. Motor Vehicle Repair Act of 1977 (Continued)
    • Parts – Used, Reconditioned or Rebuilt .
      • Original work order must specify:
        • OEM
        • NOEM
        • USED
        • RECONDITIONED
        • REBUILT
      • If consent is oral:
        • Date
        • Time
        • Telephone number
        • Name of service technician
        • Name of person receiving notice
        • Type of part
  • 14. Motor Vehicle Repair Act of 1977 (Continued)
    • Invoice .
      • All repairs performed must be recorded on invoice.
      • Invoice must be given to customer.
      • Copy retained for three years.
      • Must include:
        • Customer’s name and address
        • Year, make, odometer reading, and license number
      • Date into shop.
      • Itemization of parts.
        • Description of parts by name and number
        • Identification of whether part was used, reconditioned or rebuilt
        • Charge for part
  • 15. Motor Vehicle Repair Act of 1977 (Continued)
    • Invoice (Continued) .
      • Labor charges
        • Full name of mechanic(s) or employee number
        • If multiple mechanics – must identify which stage done by which mechanic
        • Itemized statement of charges including storage, service, handling, taxes
        • Identification of any subcontracted repairs
      • Initials of person completing invoice
      • If “no charge,” itemization not required
      • Miscellaneous designations permitted
        • Shop supplies
        • Paint and paint supplier
        • Shop materials
      • Except flat rate work – no designation of mechanics, parts, labor, etc. required.
  • 16. Motor Vehicle Repair Act of 1977 (Continued)
    • Storage Charges
  • 17. Motor Vehicle Repair Act of 1977 (Continued)
    • Storage Charges .
      • Must be a separate written agreement.
      • Must include the following language:
      • Storage Fee Policy
      • A storage fee may not be charged unless a written
      • agreement, separate from any other repair document, for an
      • amount is reached. A storage fee may be charged, beginning on
      • the fourth day, if a motor vehicle is not removed within three (3) days
      • after the customer is notified that repairs have been completed, excluding
      • Saturdays, Sundays, legal holidays, and any days the repair facility
      • is closed for business.
  • 18. Motor Vehicle Repair Act of 1977 (Continued)
    • Storage Charges (Continued) .
      • Cannot start storage charges until three business days after completion.
      • Must notify customer that repairs are completed:
      • If oral notification:
      • Date
      • Time
      • Manner of communication
      • Telephone number called
      • Service Technician’s name
      • Name of person receiving notice
  • 19. Motor Vehicle Repair Act of 1977 (Continued)
    • WARRANTY .
      • If warranty provided, must be written.
      • Writing must include completion date.
  • 20. Motor Vehicle Repair Act of 1977 (Continued)
    • Return of Replaced Parts .
      • Must be returned if customer requests except:
        • Factory warranty parts
        • Air bag components
  • 21. Motor Vehicle Repair Act of 1977 (Continued)
    • Air Bags .
      • Must use new factory or salvage
      • If salvage, need written authorization from customer
      • If salvage, disclosure (conspicuous) must be prominent on invoice:
      • Cannot specify “used” or “as is”
      • If salvaged, must include:
        • Date of sale of salvaged unit
        • VIN of vehicle from which salvaged
        • Part number
  • 22. Motor Vehicle Repair Act of 1977 (Continued)
    • Prohibited Acts .
      • Charges in excess of estimate/consent
      • Represent that repairs required if not true
      • Represent that repairs are performed if not true
      • Perform unnecessary omissions repairs
      • Failure to use proper invoice
      • Failure to given notice of additional repairs
      • Require customer to sign repair order that does not state that customer requested repairs
      • Fail to state odometer reading
      • Alter airbag
  • 23. TERMS AND CONDITIONS
      • Recommended on both Repair Order and Invoice and Prominently Displayed Sign
      • Warranty – Disclaimers and Limitations
      • Remove valuables: Not liable for lost or stolen items
      • Payment Terms
      • Lien Rights
      • Shop Supply Charges
      • Hazardous Waste Disposal Charges
      • Exclusive Remedy – Damage Limitation-Refund
      • Limited Arbitration
      • Attorney Fees
      • Test Drive Authorization
      • Parts Return Policy
  • 24. Automobile Theft Law
      • DAILY RECORD
        • Must maintain a daily log of VINs
        • Can use your invoices as your daily record
  • 25. Automobile Theft Law (Continued)
      • Daily Record (Continued)
        • Legible
        • Name and address of owner
        • Time and date of service
        • Name and address of driver
        • Model year, make & style
        • License number
        • Must be available for inspection during regular business hours.
        • Must report altered VINs.
  • 26. Garageman’s Lien
      • Garage has lien on vehicle to recover cost of repairs.
      • Repairs made at the request of owner or agent.
      • Possessory lien – meaning must have possession of vehicle.
      • Subject to purchase money security interest
  • 27. Garageman’s Lien (Continued)
      • If car released on open account or
      • If paid with bad check
        • Send written notice of bad check
        • Notice : Must be sent via registered or certified mail, return
        • receipt requested and postage prepaid at address on the
        • check or account records.
      • If 12 days have passed, may repossess the vehicle without breach of peace.
      • Must file a foreclosure action quickly or the lien expires.
  • 28. Abandoned Vehicles
    • At least 24 hours
    • Licensed tow operator must notify law enforcement
    • Tow operator sells-need appraisal
    • Must sell in a commercially reasonable manner
  • 29. Abandoned Vehicles (continued)
    • Special Rules for vehicles under $2000
    • Appraise within 15 to 30 days www.revenue.state.co.us/mv_dir/wrap.asp?incl=titlereg/info/appraisalguidelines
    • appraisal notify sheriff
    • If not reported stolen, then notify DMV
    • DMV forms DR2542
    • Complicated procedures-Call your attorney
  • 30. Disclaimer
    • This presentation was created for the Colorado Automobile Dealers Association for informational and educational purposes only. You should consult with your attorney about specific compliance issues.
    • This information is not intended as legal advice. Laws and regulations change frequently and are subject to different interpretations. This information is not intended as a substitute for competent, independent and individualized legal counsel of your choice.
  • 31. Thank You! Michael J. Dommermuth Attorney at Law 303 863-9800 303-571-1600 Fax 1600 Stout Street Suite 1600 Denver, CO 80202-3103 [email_address]