Warning: Do not obtain “Repo Titles” on vehicles that are impounded

Several reliable sources indicate that The New York State Department of Motor Vehicles (“DMV”) may be beginning an investigation of lienholders who are applying for “repo” titles in situations where the lienholder does not actually possess the vehicle. The DMV is focused on lienholders who have been using “repo” titles in order to recover vehicles from police impounds.

The term “repo title” is a shorthand term for a “repossession title” issued by the DMV. There is no right to a repo title under New York law. New York State law does not specifically authorize repo titles. The repo title concept was created by DMV as an accommodation to lienholders who asked that DMV provide some type of titling process that would allow lienholders to have a title to go with a repossessed vehicle when the vehicle was auctioned. In order to obtain a “repo” title the lienholder must sign an MV-950 form which confirms the details of the repossession. DMV considers it to be fraudulent for a lienholder to sign the MV-950 form (verifying that a repossession has occurred) where the lienholder cannot have possession because the vehicle is in police impound. Under Vehicle and Traffic Law 426 and Penal Law 175.35 the submission of a knowingly false document affecting title can be punishable as a Class E Felony.

The bottom line is that “repo” titles should never be obtained from New York or any other state where the lienholder has not actually taken possession of the vehicle. There is no such thing as a “paper repo”.

If a title is needed in order to recover a vehicle from the NYPD impound one of the two legal methods should be used:

  • Have a NY licensed attorney obtain an administrative transfer of the title through the DMV; or
  • Have a NY licensed attorney obtain a Court Order authorizing DMV to issue title.

Attorney representation is required because application for an administrative transfer of title or Court ordered transfer constitutes the practice of law.

A final related point is that lienholders must never estimate mileage when applying for a title. New York law aimed at odometer tampering requires that mileage can be reported only after physical inspection of the odometer. DMV has specifically confirmed that mileage may only be reported when the affiant confirms that he has physically inspected the odometer. Where the actual mileage cannot be obtained by physical inspection (such as where the car is held in police impound) the mileage must be reported as “0000” or “not actual mileage” and then corrected once the vehicle is recovered and the odometer is read. (The correction requires submission of MV-103 and MV-82 forms).

Lienholders should immediately review their procedures to make sure that “repo” titles are not being obtained on impounded vehicles. If a lienholder discovers that it has inadvertently obtained a suspect “repo” title there is a process for correcting the improper title that should be followed.

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