Bill Text: VA SB421 | 2012 | Regular Session | Chaptered
Bill Title: Motor vehicle dealers; recovering title.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2012-03-06 - Governor: Acts of Assembly Chapter text (CHAP0119) [SB421 Detail]
Download: Virginia-2012-SB421-Chaptered.html
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Be it enacted by the General Assembly of Virginia: 1. That §§46.2-618, 46.2-1527.1, 46.2-1527.2, and 46.2-1527.5 of the Code of Virginia are amended and reenacted and that the Code of Virginia is amended by adding in Article 4 of Chapter 6 of Title 46.2 a section numbered 46.2-654.1 as follows: §46.2-618. When unlawful to have in possession certificate of title issued to another; remedy of purchaser against persons in possession of title of vehicle purchased from dealer. A. It shall constitute a Class 1 misdemeanor for any person in the Commonwealth to possess a certificate of title issued by the Commissioner to a person other than the holder thereof, unless the certificate of title has been assigned to the holder as provided in this title. This section, however, shall apply neither to secured parties who legally hold certificates of title as provided in this title nor to the spouse of the person to whom the certificate of title was issued. B. When a purchaser of a motor vehicle is unable to obtain the title for such vehicle because the motor vehicle dealer who sold the vehicle to the purchaser is no longer engaged in business in the Commonwealth as a dealer as defined in §46.2-1500, 46.2-1900, 46.2-1992, or 46.2-1993 and the purchaser must petition a court of competent jurisdiction to direct that a person other than the dealer holding the title to release the title to the purchaser, the Court may order the title be released to the buyer if the court finds that the purchaser has a right to the title superior to that of the person holding the title under the laws of the Commonwealth. The court may also, upon finding that the person holding the title must release it, award reasonable attorney fees, expenses, and costs incurred by the purchaser in making the petition to the court. §46.2-654.1. Temporary registration issued for purchasers of motor vehicles from motor vehicle dealers who are no longer engaged in business and title is held by person other than dealer. The Department may issue a temporary registration to any purchaser of a motor vehicle who is unable to obtain the title for such vehicle because the motor vehicle dealer who sold the vehicle to the purchaser is no longer engaged in business in the Commonwealth as a dealer as defined in § 46.2-1500, 46.2-1900, 46.2-1992, or 46.2-1993 and the title is held by a person other than such dealer. §46.2-1527.1. Motor Vehicle Transaction Recovery Fund established. All fees in this article shall be deposited in the Motor
Vehicle Transaction Recovery Fund, hereinafter referred to in this article as
"the Fund." The Fund shall be a special fund in the state treasury to
pay claims against the Fund and for no other purpose provided that any such
payment does not result in a negative balance of the Fund, except the Board
may expend moneys for the administration of this article up to the maximum
amount authorized for consumer assistance in the general appropriation act,
provided the amount expended for administration does not result in a
balance of the Fund of less than $250,000. The Fund shall be used to satisfy
unpaid judgments, as provided for in §46.2-1527.3. Any interest income shall
accrue to the Fund. The Board shall maintain an accurate record of all
transactions involving the Fund. The Every applicant renewing a motor vehicle dealer's license shall pay, in addition to other license fees, an annual Fund fee of $100, and every applicant for a motor vehicle salesperson's license shall pay, in addition to other license fees, an annual Fund fee of $10, prior to license issue. However, annual Fund renewal fees from salespersons shall not exceed $100 per year from an individual dealer. These fees shall be deposited in the Motor Vehicle Transaction Recovery Fund. Applicants for an original motor vehicle dealer's license shall pay an annual Fund fee of $250 each year for three consecutive years. During this period, the $250 Fund fee will take the place of the annual $100 Fund fee. In addition to the $250 annual fee, applicants for an original dealer's license shall have a $50,000 bond pursuant to §46.2-1527.2 for three consecutive years. Only those renewing licensees who have not been the subject of a claim against their bond or against the Fund for three consecutive years shall pay the annual $100 fee and will no longer be required to pay the $250 annual fee or hold the $50,000 bond. In addition to other license fees, applicants for an original Certificate of Dealer Registration or its renewal shall pay a Fund fee of $60. The Board may suspend or reinstate collection of Fund fees. The provisions of this section shall not apply to manufactured home dealers as defined in §36-85.16, T&M vehicle dealers as defined in § 46.2-1900, trailer dealers as defined in §46.2-1992, motorcycle dealers as defined in §46.2-1993, and nonprofit organizations issued certificates pursuant to subsection B of §46.2-1508.1. The provisions of this section shall not apply to applicants
for the renewal of a motor vehicle dealer's license where such applicants have
not been the subject of a claim against a bond issued pursuant to §46.2-1527.2
or against the Fund for three years and such applicants elect to maintain
continuous bonding pursuant to Article 3.2 (§46.2-1527.9 et seq.) §46.2-1527.2. Bonding requirements for applicants for an original license. Before the Board shall issue to an applicant an original license, the applicant shall obtain and file with the Board a bond in the amount of $50,000. The bond shall come from a corporate surety licensed to do business in the Commonwealth and approved by the Attorney General. The bond shall be conditioned on a statement by the applicant that the applicant will not practice fraud, make any fraudulent representation, or violate any provision of this chapter in the conduct of the applicant's business. The Board may, without holding a hearing, suspend the dealer's license during the period that the dealer does not have a sufficient bond on file. If a person suffers any of the following: (i) loss or damage
in connection with the purchase or lease of a motor vehicle by reason of fraud
practiced on him or fraudulent representation made to him by a licensed motor
vehicle dealer or one of the dealer's salespersons acting within his scope of
employment, (ii) loss or damage by reason of the violation by a dealer or
salesperson of any provision of this chapter in connection with the purchase or
lease of a motor vehicle, or (iii) loss or damage resulting from a breach of an
extended service contract entered into on or after the effective date of this
act, as defined by §59.1-435, that person shall have a claim against the
dealer and the dealer's bond, and may recover such damages as may be awarded to
such person by final judgment of a court of competent jurisdiction against the
dealer as a proximate result of such loss or damage up to but not exceeding In those cases in which a dealer's surety shall be liable
pursuant to this section, the surety shall be liable only for the first $50,000
in claims against the dealer. Thereafter, the Fund shall be liable for The dealer's surety shall notify the Board when a claim is made against a dealer's bond, when a claim is paid and when the bond is cancelled. Such notification shall include the amount of a claim and the circumstances surrounding the claim. Notification of cancellation shall include the effective date and reason for cancellation. The bond may be cancelled as to future liability by the dealer's surety upon 30 days' notice to the Board. §46.2-1527.5. Limitations on recovery from Fund. The maximum claim of one judgment creditor against the Fund
based on an unpaid final judgment arising out of any loss or damage by reason
of a claim submitted under §46.2-1527.2 or 46.2-1527.3 involving a single
transaction shall be limited to The aggregate of claims against the Fund based on unpaid final
judgments arising out of any loss or damage by reason of a claim submitted
under §46.2-1527.3 involving more than one transaction shall be limited to However, aggregate claims against the Fund under §46.2-1527.2
shall be limited to If a claim has been made against the Fund, and the Board has
reason to believe that there may be additional claims against the Fund from
other transactions involving the same licensee or registrant, the Board may
withhold any payment from the Fund involving the licensee or registrant for a
period not to exceed the end of the relevant license or registration period.
After this period, if the aggregate of claims against the licensee or
registrant exceeds However, claims against motor vehicle dealers and salespersons participating in the Motor Vehicle Transaction Recovery Fund pursuant to § 46.2-1527.2 shall be prorated when the aggregate exceeds $50,000. Claims shall be prorated only after the dealer's $50,000 bond has been exhausted. On receipt of a verified claim filed against the Fund, the Board shall forthwith notify the licensee or registrant who is the subject of the unpaid judgment that a verified claim has been filed and that the licensee or registrant should satisfy the judgment debt. If the judgment debt is not fully satisfied 30 days following the date of the notification by the Board, the Board shall make payment from the Fund subject to the other limitations contained in this article. Excluded from the amount of any unpaid final judgment on which a claim against the Fund is based shall be any sums representing (i) interest, (ii) punitive damages, and (iii) exemplary damages. Awards from the Fund shall be limited to reimbursement of costs paid to the dealer for all charges related to the vehicle including without limitation, the sales price, taxes, insurance, and repairs; other out of pocket costs related to the purchase, insuring and registration of the vehicle, and to the loss of use of the vehicle by the purchaser. If at any time the Fund is insufficient to fully satisfy any claims or claim filed with the Board and authorized by this article, the Board shall pay such claims, claim, or portion thereof to the claimants in the order that the claims were filed with the Board. However, claims by retail purchasers shall take precedence over other claims. |
