Q about California title transfer.

[racer72]

What is the name of your state? California.

Probably not the right forum but figured someone here would know. Acquaintance bought 1999 vehicle in 2003 from dealer in the LA area. Loan financed by local strip mall lender. Loan paid off last month, all payments on time. Buyer paid sales tax on vehicle at time of purchase along with a $35 end of loan transfer fee, paperwork does not specify transfer of what. Lender supplied purchaser with title to vehicle listing purchaser as registered owner and loan company as legal owner along with a statement that the loan was paid in full. Purchaser took title and statement to DMV to tranfer legal ownership and was told it will cost her over $600 to transfer the title. The largest chunk of this is for sales tax which she previously paid. She was also told that she needed a smog test too.

I am not sure of the laws in California but this would not fly in Washington. I have paid off a number of vehicles and the lender has always presented me with a clean title listing me as both registered and legal owner shortly after paying off the loan. I told her to return the title to the lender and tell them it is there job to transfer legal ownership, not her's. Is she getting jerked around in this deal?

[CdwJava]

It sounds as if someone did not pay the proper taxes, and a lien may have been placed on the transfer of the vehicle. Your friend can inquire further up the DMV food chain, or, they can hire an attorney, or they can pay the additional fees.

The question may well be whether or not your friend wants to have title of the car or not.

- Carl

[Zigner]

To answer your other question about who does the legwork - in Calif. the buyer would received a title that still lists the finance company as the legal owner (but would show the borrower as the registered owner). The finance company will have "signed off" on the title that they release their interest in the vehicle. Then the buyer would need to take care of the "legwork" of getting the Legal Owner removed from the title - which includes a small fee for the updated title. As for the smog, if the car is within 90 days (I believe that's the right time frame) of the registration renewal date, then the *registered* owner still would need to get said smog check and pay renewal fees.
The reason that your daughter never had to get the smog before is that California has new vehicle owners just pay a fee for the first 5 years after the model year. The last time she would have been due was two years ago and the vehicle was probably still under that program. In any case, it is your daughter's responsibility to smog it.

I'm sorry but I can't speak to the tax question.

[racer72]

I have done a bit of checking and discovered that the place she went to transfer the title was incorrect. The California DMV site has the specific procedures.

Change of Legal Owner
A legal owner is someone holding a security interest in a vehicle. Legal owner and lienholder are one and the same. Change of legal owner for a vehicle may occur when a lien has been paid off or when the legal owner changes (for example when a car is refinanced).

What Must I Do When I Have Paid Off the Legal Owner?

To have the legal owner name removed from the title, you must submit the Certificate of Title to DMV. It must be signed on the designated line by the legal owner. In lieu of the legal owner's signature on the title, a Lien Satisfied Statement (REG 166), Application for Duplicate Title, or notarized statement on the financial institution's letterhead are acceptable (see below).

Remember: The department cannot remove the lienholder until you submit the title to the department to record the change.

What You Need

Any one of the three following options will satisfy DMV requirements for a legal owner release or "sign off". See below for help finding your legal owner.

1. The signature of the legal owner on the title or a notarized Lien Satisfied (REG 166) form.

2. An Application for Duplicate Title (REG 227) completed, signed, and notarized by the legal owner.

3. A notarized statement on the financial institution's letterhead that:


Describes the vehicle, and
Indicates that they no longer have record of your lien, and
States that they have no interest in the vehicle.

She was supplied with the REG 166 form with the title. She also called the dealer where she bought the car and they told her to bring everything to them and they will do the transfer for free. No smog check or taxes required.

[CdwJava]

Ah! It's all in the forms. Wrong form, and the world girnds to a halt.

Honestly, that is a situation I've never come across. Some similar ones that involved ex lovers, ex spouses, and former friends-now-enemies, but not quite like this.

- Carl