Bill Text: NJ S1724 | 2024-2025 | Regular Session | Introduced
Bill Title: Regulates pay-off of trade-in vehicles and certain vehicle title releases.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2024-01-09 - Introduced in the Senate, Referred to Senate Commerce Committee [S1724 Detail]
Download: New_Jersey-2024-S1724-Introduced.html
STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Senator PAUL D. MORIARTY
District 4 (Atlantic, Camden and Gloucester)
SYNOPSIS
Regulates pay-off of trade-in vehicles and certain vehicle title releases.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning the trade-in of used motor vehicles, supplementing chapter 10 of Title 39 of the Revised Statutes, and amending R.S.39:10-10 and R.S.39:10-11.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) a. A dealer or used motor vehicle dealer who buys a motor vehicle from a purchaser as a trade-in on which there remains a balance due under a security agreement which is to be satisfied pursuant to an agreement between the dealer and the purchaser shall, within 15 days of taking possession of the motor vehicle, remit payment in the full amount of the remaining loan to the secured party holding a security interest in the trade-in vehicle.
b. A dealer or used motor vehicle dealer subject to the provisions of subsection a. of this section shall provide proof of payment of the full balance due upon request by the person who transferred title or possession of the motor vehicle to the dealer or used motor vehicle dealer.
c. A dealer or used motor vehicle dealer who violates the provisions of this section shall be liable to a penalty of not more than $1,000 for the first offense and not more than $2,000 for the second and each subsequent offense. The penalty assessed pursuant to this subsection shall be exclusive of and in addition to any other penalties provided under chapter 10 of Title 39 of the Revised Statutes. In addition to any penalty assessed pursuant to this subsection, a dealer or used motor vehicle dealer subject to the provisions of subsection a. of this section shall pay any late cost or fee resulting from the dealer's failure to remit payment of the remaining loan in a timely manner.
2. R.S.39:10-10 is amended to read as follows:
39:10-10. When the contract or terms of the security agreement noted on the certificate of origin, or certificate of ownership have been performed, or when the full balance due has been satisfied, the seller or secured party shall:
a. deliver to the buyer, or the buyer's assignee, the certificate of ownership thereto, executed as provided in this chapter, with proper evidence of satisfaction of the contract or termination of the security interest [.Within 15 days after the performance of the contract or termination of the security interest, the seller or secured party shall] within 15 days after receipt of payment, provided, however, that when payment is made by non-certified check or draft, the seller or secured party shall make delivery within 15 days of the date which funds are credited to the seller's or secured party's account; and
b. file with the [director] chief administrator a notice, in such form as the [director] chief administrator shall prescribe, containing evidence of such performance or termination within 15 days after the performance of the contract or termination of the security interest. The chief administrator shall thereupon cause a notation to be made on his records of certificate of ownership of the motor vehicle that the contract has been satisfied or the security interest terminated.
c. A person who violates subsection a. of this section shall be liable to a penalty of not more than $500 for the first offense and not more than $1,000 for the second and each subsequent offense and shall be liable to the buyer or buyer's assignee for any fine, fee, or expense directly resulting from the failure to comply with subsection a. of this section. Any person violating the provisions of subsection b. of this section shall pay a fine of [$25.00] $25.
(cf: P.L.1961, c.122, s.4)
3. R.S.39:10-11 is amended to read as follows:
39:10-11. A. The purchaser
of a motor vehicle in this State, other than a dealer licensed pursuant to the
provisions of
R.S.39:10-19, shall, within 10 working days after its purchase, submit to the [director] chief
administrator evidence of the purchase. Upon presentation to the [director] chief
administrator of the certificate of origin, or certificate of ownership, or
bill of sale issued prior to October 1, 1946, with proper assignment and
certification of the seller, a record of the transaction shall be made and
filed. A certificate of ownership shall be issued by the [director] chief
administrator and delivered to the buyer, in case of a sale not subject to
a security interest, and the [director] chief
administrator shall collect a fee of $20 for the issuance and filing
thereof.
B. In the case of a sale subject to a security interest, a certificate of ownership, with the name and address of the holder of the encumbrance or secured party or his assignee recorded thereon, shall be delivered to the holder of the encumbrance or secured party or his assignee and a copy thereof shall be delivered to the buyer. The [director] chief administrator shall collect a fee of $30 for his services in issuing a certificate and copy thereof, and for making a record of and filing the record of the transaction, pursuant to this subsection.
C. Except as hereinafter in this section otherwise expressly provided, whenever a security interest is created in a motor vehicle, other than a security interest which is required to be noted on the certificate of origin or the certificate of ownership, as provided in R.S.39:10-8 and R.S.39:10-9, there shall be filed with the [director] chief administrator the certificate of ownership of the motor vehicle, together with a financing statement on a form prescribed by the [director] chief administrator. The [director] chief administrator shall make and file a record of the transaction and shall issue a certificate of ownership, recording the name and address of the secured party or his assignee thereon, and shall deliver it to the secured party or his assignee. A copy of the certificate of ownership so issued shall be delivered to the buyer. The [director] chief administrator shall collect a fee of $20 for his services in issuing a certificate and copy thereof and for making a record of and filing the record of the transaction, pursuant to this subsection.
D. The financing statement required to be filed pursuant to subsection C. hereof shall be signed only by the buyer, shall not be required to be acknowledged or proved, and shall show, in addition to such matters as the [director] chief administrator may require for the proper identification of the motor vehicle affected, the date of the security agreement, and the names and addresses of the parties thereto. Nothing contained in this section [39:10-11 contained] shall be construed as requiring that the security agreement or a copy thereof, or any proof of execution thereof other than that contained in the financing statement, shall be presented to the [director] chief administrator. When the buyer is a corporation, it shall be sufficient if the financing statement is signed by any officer thereof, or by any agent designated by the corporation for that purpose, and it shall not be necessary that the financing statement recite the authorization of the agent. When there is more than one buyer, it shall be sufficient if the financing statement is signed by any one of them.
E. Nothing in subsections C. and D. of this section shall apply to security interests in motor vehicles which constitute inventory held for sale, but such interests shall be subject to chapter 9 of Title 12A of the New Jersey Statutes, nor shall anything in the said subsections apply to interests in personal property subject to chapter 28 of Title 46 of the Revised Statutes.
F. In addition to the fees elsewhere in this section provided for, there shall be paid to the [director] chief administrator at the time a certificate of ownership is issued a fee of $10 for notice of satisfaction of the lien or encumbrance of the record or abstract, or of the termination of the security interest, where the motor vehicle is subject to a lien or encumbrance or a security interest as provided in R.S.39:10-14.
G. Notwithstanding any other provision of this chapter, when any dealer licensed under the provisions of R.S.39:10-19 is the purchaser of a motor vehicle in this State, he may, within 10 working days after its purchase, submit to the [director] chief administrator the evidence of purchase. Upon presentation of the certificate of ownership with proper assignment and certification of the seller to the [director] chief administrator, a record of the transaction shall be made and filed. A certificate of ownership shall be issued by the [director] chief administrator and delivered to such purchaser, and the [director] chief administrator shall collect a fee of $10 for the issuing and filing thereof.
If a dealer does not submit the evidence of purchase, upon resale of the motor vehicle he shall execute and attach to the certificate of ownership a dealer reassignment certificate. The [director] chief administrator shall issue dealer reassignment certificates in lots upon payment of a fee of $10 for each certificate.
H. Any purchaser of a motor vehicle who fails to comply with the provisions of this section shall pay to the [director] chief administrator a penalty of $25 plus the issuing and filing fee.
I. The failure of any person to comply with the requirements of this section shall not constitute a misdemeanor within the provisions of R.S.39:10-24, nor shall such failure affect the validity of any instrument creating or reserving a security interest in a motor vehicle, as between the parties to such instrument.
J. The notation of the name and business or residence address of a secured party or his assignee, on the certificate of origin or on the certificate of ownership, as provided in R.S.39:10-8 and R.S.39:10-9, and the presentation to the [director] chief administrator, in accordance with R.S.39:10-11, of the certificate of origin or certificate of ownership so noted, and the compliance with the requirements of subsections C. and D. of R.S.39:10-11 shall be in lieu of all filing requirements imposed by chapter 9 of Title 12A of the New Jersey Statutes and shall constitute the perfection of a security interest in the motor vehicle, and the rights and remedies of the debtors and the secured parties in respect to such security interest shall, except as otherwise expressly provided in this chapter, be subject to and governed by chapter 9 of Title 12A of the New Jersey Statutes.
K. A levy on a motor vehicle which is constructive and not actual in nature, initiated pursuant to R.S.39:10-15, shall not be valid, enforceable, or effective unless the person taking constructive possession of the motor vehicle seizes and takes actual possession of the motor vehicle within 30 days of filing the required notice with the chief administrator as required by R.S.39:10-15. The chief administrator shall remove any title transfer restriction or other impairment affecting the title if the motor vehicle is not seized and taken actual possession of within 30 days, or upon the request of the good faith purchaser. A levy by a judgment creditor on a motor vehicle shall not be effective against a subsequent good faith purchaser for value unless the motor vehicle in question was seized and actual possession was taken by the creditor.
(cf: P.L.1994, c.60, s.26)
4. This act shall take effect on the first day of the third month following enactment.
STATEMENT
This bill requires motor vehicle dealers to pay the remaining loan on a customer's trade-in within 15 days of accepting that trade-in. The bill also requires the dealer to provide proof of the payment to the customer upon request. A dealer who violates the bill's provisions is subject to a penalty of up to $1,000 for the first offense and up to $2,000 for each subsequent offense. In addition, a dealer would be required to pay any late cost or fee incurred by the customer as a result of the dealer's failure to pay the remaining loan on a customer's trade-in in a timely manner.
In addition, the bill requires a secured party to release the title within 15 days of receipt of payment from the motor vehicle dealer. When the balance is paid by non-certified check, the secured parties are required to release the title within 15 days from the date the check is credited to their account. A secured party who fails to comply with these time requirements is subject to a civil penalty of up to $500 for the first offense and up to $1,000 for each subsequent offense.
Under current law, a creditor that takes actual or constructive possession of a motor vehicle is required to notify the Chief Administrator of the Motor Vehicle Commission. This bill invalidates levies placed on vehicles unless a creditor taking constructive possession of the vehicle seizes and takes actual possession of the vehicle within 30 days of providing notice to the chief administrator. The bill also exempts a subsequent purchaser of a trade-in motor vehicle from financial responsibility for a levy on a motor vehicle that is not in a creditor's actual possession. The chief administrator is to release title transfer restrictions on motor vehicles that have been legally, but not physically, seized after 30 days or upon request of the good faith purchaser.
