Titled Movable Transactions

The Office of Motor Vehicles

• Operates under Department of Safety and Corrections

• Is run by the Commissioner of Motor Vehicles

Louisiana R.S. Title 32

The title that contains all of the motor vehicle laws in Louisiana

Certificate of Title

Is a negotiable instrument (meaning that it can be endorsed and transferred, like a check); Is the official negotiable document of ownership for motor vehicles

Endorsement and Delivery of Certificate of Title

No person may convey ownership in a motor vehicle without delivering to the buyer a Certificate of Title issued by the OMV in the name of the seller, properly endorsed by the seller or donor of the vehicle

2 Traditional Methods of Endorsement- Involves Notary

• The seller signs the completed title assignment in the presence of a notary who attests to the seller’s signature; or

• The seller signs the completed title assignment in the presence of two subscribing witnesses and one of the witness then goes to a notary public and that witness (who saw the seller sign) then completes the acknowledgment on the title in the presence of the notary

(This is commonly how car dealerships deal with titles)

3 New Ways of “Endorsement”

The new paragraphs (3) through (5) methods allow transfers without notarization when:

(3) signed over to an insurance company when car is totaled or settled,

(4) transferred to/from a licensed dealer; or

(5) signed before an “authorized officer” for sales involving a secured loan to certain financial institutions

Ownership vs. Merchantability

• the language of R.S. 32:705 is not a condition of sale but the courts view their statue as an additional requirement to validly title and register a movable as to make them merchantable (sellable on open market)

• Failure to comply with R.S. 32:705 makes the titled movable unmerchantable, but does not invalidate the sale (It can bring about some liability if the sale was made with warranties of title, though)

Requirements for Obtaining Certificate of Title- Buying a New, Previously Unregistered Vehicle

1. Persons must fill out a DPSMV Form 1799, Vehicle Application, which you see if you are at a dealership or a used car lot purchasing a car but you’re not trading in one

2. Manufacturer’s Statement of Origin bearing the completed seller’s assignment in favor of the buyer

3. Original itemized invoice from dealer to buyer

4. Odometer disclosure statement if the vehicle is less than 16,000 pounds

5. Lien and Copy of the UCC-1 From (if the sale is financed)

6. Copy of driver’s license

7. Taxes and fess

Requirements for a New Owner to Obtain a Louisiana Certificate of Title on a Used Vehicle Are:

1. DPSMV Form 1799, completed and signed by applicant
2. Current Certificate of Title, with completed seller's assignment of title to
purchaser properly endorsed
3. Odometer disclosure statement, unless exempt
4. Conveyance document:
• Original bill of sale or
invoice, with actual price
and full description of
vehicle; or
• Act of donation in
authentic form
5. If a lien is to be recorded, a copy of the UCC-1 financing form
6. Proof that the buyer has liability insurance, unless the purchase was from a dealer
7. Copy of driver's license

8. Taxes and fees

Out-of-State Vehicle Titles Requirements

The Certificate of Title has no requirement for a seller to appear and sign the assignment before a notary public (as in many states).
• Their residence can be
determined by:
• An affidavit of non-
residency which shows their
true address; or
• Showing their out-of-state
driver's license to the motor
vehicle officer; or
• Dealer's invoice lists the
out-of-state residence on
the trade-in invoice.
• The out-of-seller's state must be determined to determine taxes and fees. Their taxes and fees are calculated as a single out-of-state transfer
• If the seller is a resident of Louisiana, for in-state taxes and fees, the use and title fees due from the seller for bringing the vehicle into Louisiana will be charged in addition to the sales tax and fees for the sale transaction

Supporting Documentation Forms

Forms for Bill of Sale and Act of Donation are available on the OMV website at www.expresslane.org

Bill of Sale

Must contain:
• Name and capacity of seller
• Recitation of the date of sale
• Price
• Recitation that the seller is selling the titled movable
• Whether there is a warranty of any kind (title, redhibition, etc.) ... or not ("as is")
• Liens and encumbrances
• A full description of the titled movable (VIN, make, model, year, color)
• Buyer does not necessarily have to appear, but it is customary
• Names on the title must conform to that on the bill of sale
(Bill of Sale is not required except when claiming a tax credit for an out-of-state
transfer but it is a good
practice).

Act of Donation

Must be accompanied by an Authentic Act of Donation that is properly accepted by the donee, and Must contain:
• Name and capacity of the
seller
• Recitation of the date of donation
• Value of the donated vehicle
• Recitation that the donor is donating the titled movable
• Whether or not there is a warranty of any kind (title, redhibition, etc
• Relationship between the donor and donee
• A full description of the titled movable (VIN, make, model, year, color)

Memorialization of a Manual Gift

The OMV recognizes a gift without an Authentic Act of Donation in certain, limited situations as part of a transaction involving a licensed new-car dealer (Ex. when a father donates a vehicle to his daughter for use as a trade-in on a new-car purchase); Otherwise, a donation can be made without an authentic act in terms of transferring ownership, but the OMV will not recognize the transfer of title.

Odometer Disclosure Statement

• All title transfers on non-exempt vehicles must contain an odometer statement with the printed names and signatures of the transferor (seller or donor) and the transferee (buyer or donee)
• Odometer disclosure
statement need not be signed before a notary.

Exempt from Odometer Statement

A vehicle exempt from requiring an odometer
statement must meet one of the following:
• Vehicles having a gross weight rating of more than
16,000 pounds
• Vehicles that are not self-propelled (e.g. trailers)
• A vehicle with a model year of 2010 or before
• Effective January 1, 2021, a vehicle with a model year of 2011 or newer that is transferred at least twenty (20) years after January 1st of the calendar year corresponding to its designated model year; for example: A 2011 model year vehicle will become exempt January 1, 2031, a 2012 model year vehicle will become exempt in 2032, and so on
• Dealer-to-dealer trades, on new vehicles only.

Affidavit of Heirship

When a vehicle owner dies, and no judicial succession has been opened, nor judgment of possession has been issued, the surviving spouse, heirs, or legatees may obtain title to his vehicle by filing an Affidavit of Heirship on the approved DPSMV Form 1696.

Requirements of An Affidavit of Heirship

• The following Must be submitted with the Form:
• DPSMV Form 1696
• Copy of the death certificate or published obituary
• Copy of the will if the deceased died testate
• Certificate of title and registration (Affidavit if these are not available)
• Completed odometer statement, unless exempt
• Any other documents such as vehicle application or act of donation, signed by surviving spouse or heirs if no spouse
• Copy of renunciation documents, if any
• Copy of everyone's driver's licenses
• Taxes and fees
• Completed Form DPSMV
1799

Power of Attorney

• If someone is authorized to act on behalf of another through a Power of Attorney, the OMV will recognize that Power of Attorney. They are authorized to keep the original, or they can make a copy and keep the copy on file at the request of the person submitting the Power of Attorney
• An agent can transfer a vehicle on behalf of the principal and sign in that capacity on the back of the title, if that Power of Attorney specifically grants or authorizes him that power for transactions with the OMV
• A certified "True Copy" is
sufficient for the OMV

Security Agreements and Financing Statements

• If any documents submitted, such as a Manufacturer's Statement of Origin or invoice, indicate lien, a lien
instrument must be included with the file
• An out-of-state title indicating a lien is considered a lien instrument when the vehicle is being moved into Louisiana and no ownership is taking place
• Security agreements may be filed in any form, provided the information conforms to OMV requirements; forms do not need to be notarized or witnessed
• UCC-1 documents are
acceptable if they contain:
• Name and address of lienholder
• Name and address of debtor
• Complete description of vehicle
• Terms of the agreement

Vehicle Liens May be Recorded w OMV by These 4 Ways:

1. UCC-1 financing statement
2. Any security agreement
3. A lease agreement when the leasing company is both the owner and the lending institution
4. A combination bill or sale and lien document

Affidavit of Correction

• Errors happen. When an error is made in a title assignment or other signed instrument, a correction is made and explained in an affidavit of correction (see the sample in the study guide)
• The affidavit of correction must make specific reference to:
• The document or documents being corrected
• The title number or
certificate-of-origin number
• The subject vehicle by year, manufacturer, model, and VIN
• The explanation of the specific error and the correction made is in error (the person who wrote their name incorrectly, the notary who signed in the wrong place, etc.)
• This is not the same kind of Act of Correction made under LA R.S. 35:2.1 (clerical error in a notarial act affecting movable or immovable property), because this affidavit is being made by the person who made the error and does not need witnesses.

Affidavit of One and the Same Person

When the name usage on documents is inconsistent
in OMV transactions, this Affidavit is used. For example, if a woman gets divorced and changes her last name, her name may be inconsistent with the title on a vehicle.

Affidavit of Non-Purchase and Delivery

When an assignment has been completed but the sale does not take place, this affidavit is filled out. For example, if the financing falls through, or the vehicle is not as promised.

Affidavit Justifying Selling Price

If the price appears to be too low to the OMV (they want to collect taxes on the fair market value of the vehicle), the seller may have to provide an affidavit justifying why the price is so low.

Name usage on document

• The applicant's full legal name is defined as the
name on his driver's license, unless they provide proof of a name change
• Full given first and last name - no initials in place of the first name, like A.J., or nicknames
• Full legal name of the business
• Names must correspond on all of the documents
• No titles or rank can be used: cannot say Dr., Mrs., etc.
• Suffixes such as Jr. or III can only be used if it is a legal part of their name
• Except for a hyphen (-) and ampersand (&), no punctuation is allowed
• In care of (c/o) is not allowed
• Last names such as O'Donnell must be entered without spaces or
punctuation
• An abbreviated form of a name must be used when there are more than 28
characters
• Standard abbreviations apply for companies, such as LLC, LLP, or Corp

• Entities such as trusts and
DBA shall be classified as businesses

Sales and Use Tax

The OMV is the agency responsible for collecting sales tax on all transfers of new and used motor vehicles based on the selling price shown on the Bill of Sale or invoice passed before a notary public and in compliance with rules, regulations, and law as construed by the Department of Revenue.

Calculation of Sales and Use Tax

• Tax is calculated based on
where the vehicle is domiciled, not purchased
• Vehicles transferred to
Louisiana from other states
are subject to a road use tax
based on the loan value in the
printed NADA used car guide,
or the average trade-in value (for online edition). If the vehicle is too new, the value for road use tax is 85% of the original invoice price
• Sales or use tax can be lower
if the vehicle has sustained major damage, but documentation is required.

Road Use Tax Credit

• Louisiana has reciprocal
agreements with other states that allow a credit for out-of-state road use taxes
•Sales tax is not charged on trade-in value, provided the traded vehicle is titled in Louisiana and the sale document expressly recites the trade-in and description of the vehicle taken in trade. This avoids double taxation.

Even and Uneven Exchanges

• Sales tax is not charged in an
even exchange of vehicles
• Sales tax is charged on the net difference on an uneven exchange of vehicles.

Penalties and Interest

• Sales tax must be paid on all vehicles by the 40th day following the date of sale
• If sales tax is not paid timely, penalties are due of 5% per 30 days, up to 25%; and interest of 1.25% per day.

Duplicate Titles

• If an original title has been lost, destroyed, or never
received, a duplicate can be applied for
• DPSMV Form 1799 must be completed and signed by all registered owners and notarized

Requesting a Duplicate Title

• A Duplicate can be
requested by any one of the following:
• The owner
• A mandatary or agent for the registered owner when a POA is attached
• A curator or tutor, when the Letters appointing him are attached
• A trustee for a bankruptcy, a copy of the referee's order must be submitted
• A representative of the company, provided his proof of his position with the company
• The recorded lienholder
• Witnessed acknowledgment
before a notary will be acceptable only if the witness signs the application before a notary attesting that he witnessed the owner sign the duplicate title affidavit
• If there is a unsatisfied lien, the lienholder must file an Affidavit of Non-Possession in addition to the owner filing for the duplicate title.

Cancelled or Rescinded Sales

•When a manufacturer sells a new vehicle, but submits an incorrect Manufacturer's Statement of Origin or
Certificate of Origin, the "sale" may be rescinded or cancelled and the dealer must may correct the sale with the correct documentation.