Senate Bill No. 541
(By Senator Wooton and Rowe)
____________
[Introduced February 7, 2002; referred to the Committee
on the Judiciary.]
____________
A BILL to amend and reenact sections three and four, article
four-a, chapter seventeen-a of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, all relating to
certificate to show liens and encumbrances; providing that
liens and encumbrances placed on vehicles are void against
lien creditors under particular circumstances; requiring a
purchase money lien or encumbrance to be perfected on the date
and time of delivery of same to the division; specifying the
documents that will perfect a lien or encumbrance; requiring
that an application for a certificate of title must be filed
under certain time limitations in order to maintain perfected
status; providing when an application is not filed within a
certain time limitation that the division take action to void
the perfected status of a lien or encumbrance; providing that
no certificate of title will be delivered absent an application delivered to the division; prescribing lien forms
that satisfy the requirements of the article; and defining a
"purchase money lien or encumbrance".
Be it enacted by the Legislature of West Virginia:
That sections three and four, article four-a, chapter
seventeen-a of the code of West Virginia, one thousand nine hundred
thirty-one, as amended, be amended and reenacted, all to read as
follows:
ARTICLE 4A. LIENS AND ENCUMBRANCES ON VEHICLES TO BE SHOWN ON
CERTIFICATE OF TITLE; NOTICE TO CREDITORS AND
PURCHASERS.
§17A-4A-3. Notice of lien; noninventory lien created by voluntary
act of the owner not shown on certificate of title
or otherwise perfected void as to subsequent
purchasers and lien creditors; exceptions.
(a) A certificate of title, when issued by the department
showing a lien or encumbrance, shall be deemed considered from and
after the filing with the department of the application therefor or
the notice of lien authorized in section four of this article
adequate notice to the state and its agencies, boards and
commissions, to the United States government and its agencies,
boards and commissions, to creditors and to purchasers that a lien
against the vehicle exists. and the recording of such reservation
of title, lien or encumbrance in the county wherein the purchaser or debtor resides or elsewhere is not necessary and shall not be
required or have any effect. Notwithstanding any other provision
of this code to the contrary, and subject to the provisions of
subsection (b) of this section and of section four of this article,
any lien or encumbrance placed upon a vehicle by the voluntary act
of the owner but not shown on such certificate of title shall be
void as to any purchaser for value or lien creditor, who, in either
case, without notice of such lien or encumbrance, purchases such
vehicle or acquires by attachment, levy or otherwise a lien
thereupon
(b) Notwithstanding any other provision of this code to the
contrary, and subject to the provisions of subsection (c) of this
section, any lien or encumbrance placed on a vehicle by the
voluntary act of the owner shall be void as against: (i) Any lien
creditor who, without knowledge of the lien, acquires by
attachment, levy or otherwise a lien thereupon, unless the lien or
encumbrance, is noted on the certificate of title, a filed
application for certificate of title, or the notice of lien
authorized in section four of this article; and (ii) any purchaser
who, without knowledge of the lien or encumbrance, purchases the
vehicle, unless the lien or encumbrance is noted on the certificate
of title, a filed application for certificate of title, or the
notice of lien authorized in section four of this article:
Provided, That a purchaser under this subsection who purchases the vehicle without knowledge of the lien or encumbrance, and
contemporaneously obtains actual physical possession of the vehicle
and the certificate of title for the vehicle without the lien or
encumbrance noted on the certificate of title, receives the vehicle
free and clear of the lien or encumbrance.
(b) (c) The creation and perfection of a lien against: (1) A
vehicle held as inventory for sale by a registered dealer holding
title by assignment; or (2) a vehicle for which a certificate of
title has been issued and is held as inventory for lease by a
vehicle rental agency or similar person engaged solely in the
business of leasing vehicles in accordance with the provisions of
article nine, chapter forty-six of this code shall be deemed
adequate notice to the state and its agencies, boards and
commissions, to the United States government and its agencies,
boards and commissions, to creditors and to purchasers that a lien
against the vehicle exists, subject to the provisions of section
three hundred seven, article nine, chapter forty-six of this code,
except that any lien or encumbrance on such a vehicle shall not be
effective against the rights of any purchaser for value who
purchases such the vehicle primarily for personal, family,
household or agricultural purposes unless such lien or encumbrance
is recorded on the certificate of title or specified on the bill of
sale.
§17A-4A-4. Purchase money lien or encumbrance; effective date of lien; dealer to record lien; fees.
(a) A deferred purchase money lien or encumbrance upon any
motor vehicle may shall be perfected by recording in either
electronic or paper format the name and address of the lienholder
upon the face of the certificate of title for the motor vehicle.
If an application for a certificate of title is filed with the
division of motor vehicles within sixty days after the date of
purchase of the motor vehicle, the effective date of the lien or
encumbrance shall be the date the lien or encumbrance was created.
If an application for a certificate of title is not filed within
the sixty-day period, the lien shall be perfected from the date it
was filed with the division of motor vehicles on the date and at
time of delivery to the division of motor vehicles of either of the
following documents, whether in paper format or by facsimile or
other electronic format: (1) The applicable notice of lien forms
provided in subsection (d) of this section; or, (2) an application
for a certificate of title. If perfection occurs pursuant to
subdivision (1), subsection (a) of this section, an application for
a certificate of title must be filed with the division of motor
vehicles within sixty days after the date of purchase of the
vehicle or refinancing of the purchase in order to maintain the
perfected status of the lien or encumbrance. When an application
is not filed within the time prescribed, the division of motor
vehicles shall remove from its records the form filed in accordance with subdivision (1), subsection (a) of this section and the lien
or encumbrance shall become unperfected on the sixty-first day
following the purchase or refinancing date of the vehicle. To re-
perfect such lien or encumbrance, an application for a certificate
of title must be filed with the division of motor vehicles, and the
new perfection date for the lien or encumbrance is the date and
time of the delivery of the application for a certificate of title.
No certificate of title for a vehicle may be issued unless an
application is delivered to the division.
(b) In all transactions involving a deferred purchase money
lien or encumbrance upon a motor vehicle, the motor vehicle dealer
shall collect and remit to the division of motor vehicles the
title, tax and registration fees required under section four,
article three of this chapter and file and record with the division
of motor vehicles any lien created as a result of the transaction:
Provided, That a motor vehicle dealer may remit the title, tax and
registration fees through any license service that is licensed by
the division of motor vehicles.
(c) No fee may be charged by a motor vehicle dealer for its
services required under this section except that fee authorized by
section one-b, article six of this chapter, or subdivision (6),
subsection (a), section one hundred nine, article three, chapter
forty-six-a of this code.
(d) The following notice of lien forms or another document in substantial compliance with the forms is sufficient to satisfy the
requirements of this article:
(i) Dealer's Notice of Lien [Used Vehicle]
STATE OF WEST VIRGINIA
DEPARTMENT OF TRANSPORTATION
DIVISION OF MOTOR VEHICLES
Dealer's Notice of Lien
[Used Vehicle]
DESCRIPTION OF USED VEHICLE:
(Vehicle Identification Number)(Year, Model & Make of Vehicle)(Style of Body)(Model Name)
USED VEHICLE SALE TO DEALER:
The undersigned seller(s) hereby acknowledge(s) that the undersigned sold
the above-described vehicle to .................................. on
............................(Name of Dealer)
(Date of Sale to Dealer)
The undersigned further acknowledge(s) that such vehicle:
* Was not subject to any lien
* Was subject to the lien of .................................
(Name of Existing Lienholder)
...................................................
[Printed Name Of Seller][Printed Name of Co-Seller]
...................................................
[Signature of Seller][Signature of Co-Seller]
PURCHASE INFORMATION:
......................................................................
(Purchaser Name)(Purchaser's Address)
......................................................................
(Co-Purchaser Name)(Co-Purchaser's Address)
NEW LIEN INFORMATION:
......................................................................
(Name of New Lienholder)(Date of Lien)
......................................................................
(Street Address)(City/State/Zip Code)(Phone No.)
......................................................................
(Mailing Address)(City/State/Zip Code)
The above-named dealer does hereby certify that the above-named
lienholder has acquired a lien on the above-described motor vehicle.
....................................
[Signature of Dealer Representative]
(ii) Dealer's Notice of Lien [New Vehicle]
STATE OF WEST VIRGINIA
DEPARTMENT OF TRANSPORTATION
DIVISION OF MOTOR VEHICLES
Dealer's Notice of Lien
[New Vehicle]
DESCRIPTION OF USED VEHICLE:
(Vehicle Identification Number)(Year, Model & Make of Vehicle)(Style of Body)(Model Name)
......................................................................
(Selling Dealer Name)
......................................................................
(Dealer Street Address)(City/State/Zip Code)(Phone No.)
The above-named dealer does hereby certify that this is the first sale
of the above-referenced motor vehicle..................................
[Signature of Dealer Representative]
PURCHASE INFORMATION:
......................................................................
(Purchaser Name)(Purchaser's Address)
......................................................................
(Co-Purchaser Name)(Co-Purchaser's Address)
LIEN INFORMATION:
......................................................................
(Name of New Lienholder)(Date of Lien)
......................................................................
(Street Address)(City/State/Zip Code)(Phone No.)
......................................................................
(Mailing Address)(City/State/Zip Code)
The above-named dealer does hereby certify that the above-named
lienholder has acquired a lien on the above-described motor vehicle.
....................................
[Signature of Dealer Representative]
The above-named purchaser(s) does (do) hereby acknowledge purchase of the
above-described motor vehicle and that the above-named lienholder has
acquired a lien on the above-described motor vehicle.
....................................
[Signature of Purchaser]
....................................
[Signature of Co-Purchaser]
(iii) Lender's Notice of Lien [Used Vehicle]
STATE OF WEST VIRGINIA
DEPARTMENT OF TRANSPORTATION
DIVISION OF MOTOR VEHICLES
Lender's Notice of Lien
[Used Vehicle]
DESCRIPTION OF USED VEHICLE:
(Vehicle Identification Number)(Year, Model & Make of Vehicle)(Style of Body)(Model Name)
USED VEHICLE SALE TO DEALER:
The above-described vehicle was previously owned by
............................... and such vehicle:
(Name of Prior Owner)
* Was not subject to any lien
* Was subject to the lien of .................................
(Name of Existing Lienholder)
PURCHASE REFINANCE INFORMATION:
..................................................................................................
(Purchaser/Refinancing Party Name)(Purchaser's/Refinancing Party Address)
..................................................................................................
(Co-Purchaser/Co-Refinancing Party Name)(Co-Purchaser's/Co-Refinancing Party's Address)
NEW LIEN INFORMATION:
......................................................................
(Name of New Lender/ Lienholder)(Date of Lien)
......................................................................
(Street Address)(City/State/Zip Code)(Phone No.)
......................................................................
(Mailing Address)(City/State/Zip Code)
The above-named lender does hereby certify that the above-named lender
has acquired a lien on the above-described motor vehicle.
....................................
[Signature of Lender Representative]
The above-named purchaser(s) refinancing party (ies) does (do) hereby
acknowledge purchase of the above-described motor vehicle and that the
above-named lienholder has acquired a lien on the above-described motor
vehicle.
......................................................
[Signature of Purchaser/Refinancing Party]
......................................................
[Signature of Co-Purchaser/Co-Refinancing Party]
(iv) Lender's Notice of Lien [New Vehicle]
STATE OF WEST VIRGINIA
DEPARTMENT OF TRANSPORTATION
DIVISION OF MOTOR VEHICLES
Lender's Notice of Lien
[New Vehicle]
DESCRIPTION OF USED VEHICLE:
(Vehicle Identification Number)(Year, Model & Make of Vehicle)(Style of Body)(Model Name)
......................................................................
(Selling Dealer Name)
......................................................................
(Dealer Street Address)(City/State/Zip Code)(Phone No.)
PURCHASE INFORMATION:
......................................................................
(Purchaser Name)(Purchaser's Address)
......................................................................
(Co-Purchaser Name)(Co-Purchaser's Address)
LIEN INFORMATION:
......................................................................
(Name of Lender/Lienholder)(Date of Lien)
......................................................................
(Street Address)(City/State/Zip Code)(Phone No.)
......................................................................
(Mailing Address)(City/State/Zip Code)
The Lender does hereby certify that the above-named Lender has acquired
a lien on the above-described motor vehicle.
....................................
[Signature of Lender]
The above-named purchaser(s) does (do) hereby acknowledge purchase of the
above-described motor vehicle and that the above-named Lender has
acquired a lien on the above-described motor vehicle.
....................................
[Signature of Purchaser]
....................................
[Signature of Co-Purchaser]
(e) For purposes of this section, a purchase money lien or
encumbrance is defined to include: (1) A lien taken or retained by
the seller or the vehicle to secure all or a part of its price; (2)
a lien taken by a person who by making advances or incurring an
obligation gives value to enable another to acquire rights in or
the use of a vehicle if such value is so used; and, (3) the
refinancing of either of the foregoing for the sole purpose of
repaying a loan secured by the vehicle.
NOTE: The purpose of this bill is to
address various legal aspects relative to a certificate to show liens and encumbrances
applicable to vehicles. Particularly the bill contains the
following changes to current law: (1) It provides that liens and
encumbrances placed on vehicles are void against lien creditors
under particular circumstances; (2) it requires a purchase money
lien or encumbrance to be perfected on the date and time of
delivery of same to the division; (3) it specifies certain
documents that will perfect a lien or encumbrance on a vehicle; (4)
it requires that an application for a certificate of title must be
filed under certain time limitations in order to maintain perfected
status; (5) it provides that when an application is not filed
within a certain time limitation that the division shall take
action to void the perfected status of a lien or encumbrance; (6)
it provides that no certificate of title will be delivered absent
an application for same delivered to the division; (7) it
prescribes lien forms that satisfy the requirements of the article;
and, (8) it defines the terms "purchase money lien or encumbrance".
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.