SB 411 — Various Motor Vehicle Law Revisions.

GENERAL ASSEMBLY OF NORTH CAROLINA SESSION 2017 S 21 SENATE BILL 411 Transportation Committee Substitute Adopted 4/24/17 Short Title:

Senator B.

Jackson (Primary Sponsor).

Rules and Operations of the Senate March 29, 2017 A BILL TO BE ENTITLED AN ACT TO EXPAND THE REQUIRED USE OF THE ELECTRONIC LIEN SYSTEM IMPLEMENTED BY THE DIVISION OF MOTOR VEHICLES AND TO REVISE THE LAW GOVERNING WHEN A MOTOR VEHICLE DEALER THAT DOES NOT HAVE A MOTOR VEHICLE'S STATEMENT OF ORIGIN OR CERTIFICATE OF TITLE MAY TRANSFER TITLE TO THE MOTOR VEHICLE.

When a manufacturer's statement of origin or an existing certificate of title on a motor vehicle is unavailable, a motor vehicle dealer licensed under Article 12 of this Chapter may also transfer title to another by certifying in writing in a sworn statement to the Division thatthatthat, to the best of the dealer's knowledge and information, all prior perfected liens on the vehicle have been paid and that the motor vehicle dealer, despite having used reasonable diligence, iswas unable to obtain the vehicle's statement of origin or certificate of title.title on or prior to the date the dealer sold or transferred the vehicle because the statement of origin or certificate of title was (i) not delivered to the dealer or (ii) lost or misplaced by the dealer.

In the absence of a form developed by the Division, a dealer may use any form that satisfies the requirements of this subsection, provided*S411-v-1* that the dealer submits the completed form and *S411-v-2* General Assembly Of North Carolina Session 2017 certificateprovided ofthat, titlewithin toa thereasonable Divisiontime noof laterobtaining thanor 45receiving daysthe followingform, the saledealer orsubmits transferthe completed form and certificate of title to the vehicle.Division.

A dealer principal, owner, or manager of a motor vehicle dealership shall only be liable infor accordancea withviolation G.S.under this subsection for the actions or conduct of a dealership employee if the dealer principal, owner, or manager had actual knowledge of the falsity of the application at the time the application was submitted to the Division.

20-72.1.Any person transferring title or interest in a motor vehicle shall deliver the certificate of title duly assigned in accordance with the foregoing provision to the transferee at the time of delivering the vehicle, except that where a security interest is obtained in the motor vehicle from the transferee in payment of the purchase price or otherwise, the transferor shall deliver the certificate of title to the lienholder and the lienholder shall forward the certificate of title together with the transferee's application for new title and necessary fees to the Division within 20 days.

Any person transferring title or interest in a motor vehicle shall deliver the certificate of title duly assigned in accordance with the foregoing provision to the transferee at the time of delivering the vehicle, except when a certificate of title is unavailable as provided in G.S.

20-72.1, and except that where a security interest is obtained in the motor vehicle from the transferee in payment of the purchase price or otherwise, the transferor shall deliver the certificate of title to the lienholder and the lienholder shall forward the certificate of title together with the transferee's application for new title and necessary fees to the Division within 20 days.

Part 4 of Article 3 of Chapter 20 of the General Statutes is amended by adding a new section to read:

"§ 20-72.1.

Transfer by owner when a certificate of title is unavailable;

consumer remedies.

(a) Notwithstanding any other provision in this Article, when an existing certificate of title on a motor vehicle is unavailable, a motor vehicle dealer licensed under Article 12 of this Chapter shall deliver the certificate of title together with the transferee's application for new title and necessary taxes and fees to the Division within 20 days of receipt of the title, but no later than 45 days following the sale or transfer of the vehicle.

The dealer may offer the vehicle for sale provided that any potential purchaser is given written notice prior to sale that the dealer is not in possession of the certificate of title.

For purposes of this paragraph, a vehicle's existing certificate of title shall be considered unavailable under either of the following circumstances:

(1) The dealer is entitled to possession of the title, but it has not been actually delivered to the dealer on or prior to the date the dealer sold or transferred the vehicle.

(2) The title was lost or misplaced by the dealer on or prior to the date the dealer sold or transferred the vehicle and the dealer has made application to the Division for a duplicate title prior to the sale or transfer of the vehicle.

(b) In any case where a dealer fails to deliver the certificate of title to the Division within 45 days, the vehicle purchaser shall have the option to rescind the purchase transaction and collect the full purchase price of the vehicle and liquidated damages from the dealer.

Liquidated damages shall be one thousand dollars ($1,000) or five percent (5%) of the vehicle purchase price, whichever is greater.

Nothing in this section shall be construed to limit any other civil remedies or consumer protections available to the vehicle purchaser." SECTION 4.

Page 2 Senate Bill 411-Second411-First Edition