T
exas dealers know the title dance all too well — not to mention the complications that can ensue when that precious blue document is not present at the closing table for the buyer to sign. What to do? What to do? Use the brown, secure POA? Can’t do it unless you’re dealing with a trade-in and there is a payoff or a lost title. Have the customer come back in when the title becomes available? That has been the default setting for many dealers, and most can attest to the futility of trying to actually get the customer to come back in. Sometimes, it just ain’t gonna happen. Over the years, many dealers have resorted to having the customer sign a white, non-secure POA. Although technically not appropriate for dealer transactions, for years many counties would accept this document provided it had been granted to a “disinterested 3rd party” and not the dealer. Some counties even accepted the form when it HAD been granted directly to the dealer, although this practice was prohibited on the face of the document. This was the condition of the industry when the Vehicles Titles and Registration division (VTR) of TxDMV recently undertook to review its forms, practices and procedures with an eye toward ensuring compliance with federal law. During this review, VTR realized that the widespread use of white POAs in dealer transactions was, in most cases, a violation of the federal truth-in-mileage act, which strictly limits the use of POA’s for odometer disclosure statements. VTR brought the matter to the attention of Blake Ingram, a TIADA past president who occupies the position reserved for an independent dealer on the TxDMV board. “I was very concerned when I realized VTR was correct, and that dealers would need to stop using the white
February 2016
T e x a s
D e a l e r
So How Does This Work? by Danny Langfield
The state is re-iterating its position that the white POA, also known as VTR 271, is not appropriate for dealer transactions. The state recently issued a new version of the VTR 271; however, neither the old nor the new version of the VTR 271 may be used in dealer transactions, according to TxDMV. At the urging of TIADA, the state has decided to allow the use of a secure dealer reassignment form (VTR 41-A) even when all the dealer reassignment spaces have not been used on the original title. TIADA believes this is an enormous win for the industry, as it negates the need for a POA when title is not present at closing. ACTION ITEMS: Starting immediately, TIADA is recommending that, on every applicable sale, dealers do one of two things: Have the customer sign the original title document; or, if the title is not present… Have the customer sign a secure dealer reassignment form (VTR 41-A). We are also recommending that dealers immediately stop using the white POA, as it is unclear whether counties will continue to accept them. Some counties have already begun rejecting dealer title applications supported by a white POA. Keep your TIADA membership current. This POA update is the type of critical information that is only provided to CURRENT members of TIADA. If you are not a member, you can join by calling 800.442.5944 or online at www.txiada.org. ADDITIONAL INFORMATION: This update applies to vehicles subject to the federal odometer disclosure law. Vehicles 10 years or older, or with a gross weight over 16,000 lbs still do not require the buyer’s signature on the title. Form VTR 41-A is only available from the VTR regional service centers as well as some county tax offices. It is a secure, numbered form; therefore it cannot be printed directly or downloaded. A sample image is provided on page 12. Regarding deals already completed with a white POA, but not yet transferred: depending on your county, these deals may still be accepted. If they are rejected, TxDMV has taken the position that you must have the customer sign the original title. Regarding the secure dealer reassignment form (VTR 41-A): As stated above, if the original title is not present at closing, a dealer may have the customer sign VTR 41-A. This form has an eight digit control number printed in red ink in the lower left corner. When the original title becomes available, the dealer must write in the next open reassignment space on the original title, “REASSIGNMENT ON _________” indicating the control number of the VTR-41-A that was used. VTR has indicated that the dealer may write that on any line in the next open reassignment space. If your county has any issues with accepting a VTR 41-A in this manner, please direct them to the state’s registration and titling bulletin, RTB 011-15. This announcement does not affect the secure, or “brown” power of attorney (VTR 271-A). The appropriate usage of this form has not changed. It may only be used when a vehicle is being traded in and the title is physically held by a lienholder or has been lost. In these situations, dealers should continue to use the brown POA. 9