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New Mexico Lemon Law – Consumer Rights

August 18, 2011 Leave a comment

The other day my aunt had asked me about how New Mexico’s lemon law works. As an Albuquerque business lawyer, I figured that this subject would be of interest to many consumers who have purchased a vehicle in this state. Believe it or not there exists a lemon law with regard to both used and new vehicles. The lemon law comes from the Motor Vehicle Quality Assurance Act (NMSA 1978, 57-16A-1 to 57-16A-9).

With regard to newly purchased vehicles the lemon law applies to new and demonstration vehicles sold by New Mexico car dealers. Basically the law applies to force car dealers to repair all defects which have a substantial impact on the market value and of course the use of the car. The time period to which the law applies is the shorter period of either one-year after which the consumer takes possession of the vehicle, or when the manufacturer’s warranty expires. Basically the law will allow a consumer to be eligible for a replacement or repurchase under the law, if during the one-year period the car has been at the dealership for a total of thirty days or more (this is cumulative), or the car has the same problem repaired four or more times.

NMSA 1978, 57-16A-3.1 applies to used vehicles, and applies to vehicles sold by a New Mexico car dealer. Car dealers must include disclosure of the lemon law in the contract for the sale of the vehicle otherwise the purchaser may cancel the contract. The law provides that used vehicles cannot be sold “as is”; any commercial lawyer would recognize the “as is” language as a disclaimer of warranty, but it does not apply in this context. Additionally the law creates a warranty on the vehicle for the time period of whichever occurs first between 500 miles or 15 days. Once the consumer becomes aware of a problem that limits the use of the car, he or she must return the vehicle to the dealer before attempting to have the car repaired. Failure to follow this key point will make the lemon law inapplicable to the dealer; the essence of this is to give the dealer a chance to repair the problem. The car dealer can charge up to $25 for the first two attempts to repair the vehicle. If a dealer refuses to fix a problem that occurs within the short warranty period, then the consumer can cancel the contract, is entitled to get their money back and if a car was traded in, the consumer can get their old car back. Lastly and obviously, the law does not apply when the problem occurs as the result of abuse, off-roading, racing, failure to maintain required fluids or lubricants and other such operator errors. If you have questions about whether the lemon law applies to your situation, contact one of our Albuquerque attorneys.

Forming a Limited Liability Company – New Mexico

August 1, 2011 Leave a comment

Deciding what type of entity you want for your business is certainly important, as this choice has ramifications mainly related to taxes and report requirements. The advantages or disadvantages of forming a certain type of business (either as a partnership, corporation, limited liability company, or nonprofit corporation) is largely based on what the business is going to do. An entity formation attorney can be useful in advising you as to what type of business entity is right for the type of business that you want to run. Having made the choice to form a business as a limited liability company, here are some of the more important things that you will need to do.

1.   The first item is to choose a name. One important thing about the name is that it must contain “Limited Liability Company”, “LLC”, or “L.L.C.” after the business name. After a name is selected it must be checked to see that someone else has not already registered the same business name; this can only be done by checking with the appropriate state department (the Secretary of State or some department thereof).

2.  After choosing a name, the company must draft “Articles of Organization.”  States have different requirements for what has to be included in this document; for example some States require that the documents indicate whether there is one owner (member) or multiple,  or whether you will be member or manager-managed. Typical elements that need to be in this founding document include both a clause designating a registered agent and a clause stating the  office address for the registered agent. The registered agent is the party that will be served in the event the business is sued or the State otherwise needs to contact the business.

3. After completing the Articles of Organization the incorporator (person who files the documents with the proper State agency) will then send off or deliver the Articles of Organization to the Secretary of State for filing; this usually requires a nominal filing fee which varies by State.

4. After filing the Articles of Organization the business becomes recognized as an entity by the State. The next thing that business owners should do is adopt an “Operating Agreement” (this is analogous to bylaws with a corporation). An Operating Agreement must be adopted by the owners/members of the business, and will dictate how the business must run. These are the rules that govern all LLC action. Common items addressed in an Operating Agreement including voting rights, ownership structure, and management decisions. It should be noted that an Operating Agreement replaces the State’s default set of operating rules. A business attorney is usually retained to draft an Operating Agreement that will meet the business owner’s needs.

5. After adopting the Operating Agreement, the owners generally meet and resolve to complete items that are needed for the business to run, like opening a bank account, and applying for insurance.

Although not an exhaustive checklist of what needs to be done to form a limited liability company (LLC), the above is enough to get the LLC formed; however some States may require more. A good idea is to check with your State’s Secretary of State to determine the precise requirements for formation. A local business lawyer can help you form your limited liability company in accordance with your State’s laws.

Categories: Business