
ENROLLED
COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 541
(Senators Wooton and Rowe, original sponsors)
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[Passed March 8, 2002; in effect from passage.]










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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; 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 division
showing a lien or encumbrance, shall be considered from and after
the filing with the division 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.

(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.

(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 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 purchase money lien or encumbrance upon any vehicle
shall be perfected on the date and at time of delivery to the
division of motor vehicles of either the application for a
certificate of title with all supporting documents, or a completed
notice of lien form in a format determined by the division. The
notice of lien form may be submitted to the division in paper
format, facsimile or in any other electronic format approved by the
division.
(b) If perfection occurs through the notice of lien form
pursuant to subsection (a) of this section, an application for
certificate of title must be received by the division of motor
vehicles within sixty days after the date of purchase of the
vehicle or refinancing of such purchase in order to maintain the
perfected status of such lien or encumbrance. When an application
is not filed within the time prescribed, the lien or encumbrance
shall become unperfected on the sixty-first day following the
purchase or refinancing date of the vehicle. If an application for
a certificate of title is received by the division on or after the
sixty-first day, the new perfection date for the lien or
encumbrance is the date the application for a certificate of title is received by the division. Nothing in this section extends the
sixty-day title application filing requirement of section four,
article four of this chapter. The name and address of the lien
holder shall be recorded on this title by the division in either
electronic or paper format.
(c) No certificate of title for a vehicle shall be issued
unless an application is delivered to the division of motor
vehicles.
(d) In all transactions involving a 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.
(e) 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.
(f) 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.