regulation matters Dealer Reassignment Update & More
by Danny
M
arch is upon us, and no doubt the changes to the “two steps, one sticker” program, documented in this space last month, are garnering a fair share of attention at your dealership. As you are probably aware by now, vehicles sold by a dealer on or after March 1 will need to have completed a passing inspection in the 180 day period preceding the sale date in order to be registered. But that was last month’s column! This month let’s have a little deeper look at the secure dealer reassignment form (VTR 41-A) and its appropriate use when title is not present at closing. For an overview of this matter, please see the cover story from the February issue of this magazine entitled, “Goodbye, White POA... Hello Secure Dealer Reassignment.”
VTR 41-A Not Applicable
One situation not discussed in that story involves the retail resale of a vehicle that has been repossessed by the lienholder. As BHPH dealers know, when a repossessed vehicle is resold, the dealer signs the title as the seller using an affidavit of repossession, and the new customer signs as the buyer. These signatures are entered on the first box labeled “Assignment of Title” on the back of the title. So, if that title is not present at closing, could the dealer have the customer sign the VTR 41-A instead of the title? Unfortunately, the answer is no. Before a reassignment form can be used, there must be at least one assignment completed on back of the title. And in the case of a title on a vehicle that was repo-ed, the back would be blank. (See facing page) Another situation not covered in last month’s article is that of a vehicle which is titled in the dealer’s name. Though dealers normally only take assignment of titles for vehicles in their inventory, in some instances a vehicle will actually be transferred into the dealership’s name. In other words, in these situations, the dealership is shown as the owner on the front of the title, instead of being an assignee on the back. Federal law specifies that a dealer may not use the secure dealer reassignment form when the dealership is the owner listed on the front of the title.
32
Langfield
TIADA DEPUTY DIRECTOR
A couple other brief notes on the dealer reassignment: many dealers have been asking where exactly they need to write “Reassignment on _____” on the back of the original title. The answer is this: write it on the next available reassignment space, in any area where it will be legible. We recommend using the bottom right line above where it says Printed Name. Lastly, some members have reported that their county tax offices still will not accept dealer reassignment forms when there are spaces available on the original title. If you encounter this, you can refer the county to the Registration & Title Bulletin RTB #011-15 entitled, ‘Use of the Dealer Reassignment with “Open” Reassignments’ issued by VTR on 12/18/15. Contact me if you need an actual copy of or link to that bulletin.
Other Agency Happenings…
A few interesting rule actions are in various stages of progress from a couple of state agencies. TxDMV has a rule package which has been posted and is now in the public comment period. Among other things, this rule creates a duty for a seller to post a sign with specific disclosure language on each salvage rebuilt vehicle offered for sale. It would also require a written disclosure, signed by the customer and retained by the dealer, with similar language. The OCCC is also looking at an administrative rule action, this one including a review of the agency’s motor vehicle rules. The pre-comment draft included several potentially significant provisions, one of which considers increasing the “safe harbor” amount of a doc fee to $150 (currently it is $125). Another provision would provide for a required annual renewal statement from MVSF licensees which would include the dollar volume of contracts originated, acquired, or serviced during the preceding calendar year. TIADA will continue to track these developments and keep you up to date as they progress. T e x a s
D e a l e r
March 2016