It is important for used car dealers to comply with the provisions of the California Vehicle Code §5753, Chapter 2 because it sets forth some of the legal requirements for transferring ownership of a vehicle in the state of California. This includes requirements for transferring the title of the vehicle in a timely manner, providing certain information and disclosures to the buyer, and following certain procedures to ensure the transfer is done legally and accurately.
By abiding by these laws, used car dealers can protect themselves from potential legal liabilities and ensure that the transactions they are involved in are fair, transparent, and compliant with state regulations. Additionally, following these laws helps to maintain the integrity of the vehicle ownership records in California and prevent issues related to fraudulent transfers or ownership disputes..
Here are some tips to follow:
•Dealerships must submit an application for registration or transfer of registration to the DMV within 20 days after sale of a new car, or 30 days after sale of a used car.
• Penalties due for noncompliance are to be paid by the dealership and cannot be charged to the purchaser.
• If the DMV returns an application for registration and the application was first received by the DMV within 20 days of the date of sale of a new vehicle, the dealer must submit a corrected application within 40 days from the date of sale of the vehicle or 20 days from the date that the application is first returned by the DMV, whichever is later. If the vehicle is used and the application was first received by the DMV within 30 days of the date of sale of the vehicle, then the dealer must submit a corrected application within 50 days from the date of sale or within 30 days from the date that the application is first returned, whichever is later. Cal. Veh. Code §4456(a)(4). This means that the maximum time between the date of sale and the receipt of registration should be approximately 40 days for a new vehicle and 60 days for a used vehicle.
• Dealerships must turn over title no later than 15 business days after payment has been made in full; if they fail to do so, they may have to pay up to $2,500 (or $7,500 with triple damages) plus costs/attorney fees incurred in any court action brought by buyer.
Please review the actual Vehicle Code section 5753 below for more details:
(a) It is unlawful for any person to fail or neglect properly to endorse, date, and deliver the certificate of ownership and, when having possession, to deliver the registration card to a transferee who is lawfully entitled to a transfer of registration.
(b) Except when the certificate of ownership is demanded in writing by a purchaser, a vehicle dealer licensed under this code shall satisfy the delivery requirement of this section by submitting appropriate documents and fees to the department for transfer of registration in accordance with Sections 5906 and 4456 of this code and rules and regulations promulgated thereunder.
(c)(1) Within 15 business days after receiving payment in full for the satisfaction of a security interest and a written instrument signed by the grantor of the security interest designating the transferee and authorizing release of the legal owner’s interest, the legal owner shall release its security interest and mail, transmit, or deliver the vehicle’s certificate of ownership to the transferee who, due to satisfaction of the security interest, is lawfully entitled to the transfer of legal ownership.
(2) If a lease provides a lessee with the option to purchase the leased vehicle, within 15 business days after receiving payment in full for the purchase, and all documents necessary to effect the transfer, the lessor shall mail, transmit, or deliver the vehicle’s certificate of ownership to the transferee, who, due to purchase of the vehicle, is lawfully entitled to the transfer of legal ownership.
(d) The certificate of ownership delivered pursuant to subdivision (c) shall be signed by the legal owner or lessor to reflect release of the legal owner’s interest or transfer of the lessor’s interest in the vehicle or accompanied by a form provided by the department to accomplish the same result and signed by the legal owner or lessor. If the legal owner or lessor is not in possession or control of the certificate of ownership, the legal owner or lessor shall, within the time provided in subdivision (c) for the mailing, transmittal, or delivery of the certificate of ownership, take any action required by the department to release the legal owner’s security interest or transfer the lessor’s interest in the vehicle and within that time shall mail, transmit, or deliver written notice of its taking that action to the transferee.
(e) A legal owner or lessor that fails to satisfy the requirements of subdivisions (c) and (d), shall, without offset or reduction, pay the transferee twenty-five dollars ($25) per day for each day that the requirements of subdivisions (c) and (d) remain unsatisfied, not to exceed a maximum payment of two thousand five hundred dollars ($2,500). If the legal owner or lessor fails to pay this amount within 60 days following written demand by the transferee, the amount shall be trebled, not to exceed a maximum payment of seven thousand five hundred dollars ($7,500), and the transferee shall be entitled to costs and reasonable attorneys fees incurred in any court action brought to collect the payment. The right to recover these payments is cumulative with and is not in substitution or derogation of any remedy otherwise available at law or equity.
(f) A legal owner, upon written request of the transferee, shall disclose any pertinent information regarding the amount of payment and the documents necessary to release the obligation secured by the legal owner’s interest.
