How long shall a lienholder wait to sell an abandoned vehicle?

Full Question:

Once a mechanics lien is filed how long does the lienor have to wait before sale of the vehicle or before applying for a title at DMV?
05/29/2017   |   Category: Abandoned Property   |   State: Colorado   |   #38033

Answer:

A vehicle is presumed to be abandoned if the owner has failed to contact the lienholder for a period of not less than 30 days and the lienholder, in good faith, is without knowledge of any evidence indicating that the owner does not intend to abandon the property. The lien holder has to wait for 15 days to sell the abandoned vehicle. Fifteen days prior to selling of the abandoned vehicle, the lienholder has to notify the owner about the sale. The lienholder have to send a notice to the owner's last known address by registered or certified mail, return receipt requested, signed by the addressee only. If no response is received, he can sell the vehicle after the completion of 15 days.
The following are the Colorado statutes in this regard:
 
38-20-116. Abandoned property - notice of sale - definitions


(1) Property is presumed to be abandoned if the owner has failed to contact the lienholder for a period of not less than thirty days and the lienholder, in good faith, is without knowledge of any evidence indicating that the owner does not intend to abandon the property.

(2) At least fifteen days prior to selling or otherwise disposing of abandoned property, the lienholder shall notify the owner of the proposed manner and date of disposition by transmitting said notice to the owner's last known address by registered or certified mail, return receipt requested, signed by the addressee only. The lienholder shall maintain in his records for a period of one year a copy of said notice together with the return receipt signed by the addressee, or, if said notice is returned unclaimed, said notice and the proof of return unclaimed shall be so maintained. If the written notice is returned unclaimed, the lienholder shall publish said notice at least one day in a newspaper in the county in which the property is located or, if no newspaper is published in that county, then a newspaper in some adjoining county.

(2.5) (a) The provisions of this subsection (2.5) shall apply to abandoned motor vehicles at repair shops.

(b) For purposes of this subsection (2.5), unless the context otherwise requires:

(I) "Abandoned motor vehicle" means a motor vehicle:

(A) That has been left at a repair shop by the motor vehicle's owner, the owner's agent, or an operator hired by the owner or owner's agent;

(B) That the repair shop has offered to repair and for which the repair shop has prepared an estimate of repair costs;

(C) That the owner or the owner's agent has refused to authorize repairs to, has refused to remove from the repair shop upon request, or has refused to pay for authorized and completed repairs to the vehicle. If a repair shop is unable, despite good faith efforts, to obtain a response from the owner or the owner's agent regarding the authorization of repairs, payment for authorized and completed repairs, or the removal of a motor vehicle, the owner or owner's agent shall be deemed to have refused to grant authorization, make payment, or remove the motor vehicle five working days following the repair shop's last good faith effort to contact the owner or owner's agent.

(D) That is not the subject of sale negotiations or a sale agreement between the owner or the owner's agent and the repair shop.

(II) "Department" means the department of revenue.

(III) "Division" means the division of motor vehicles in the department.

(IV) "Lienholder" means a person who holds a security interest in a motor vehicle under article 9 of title 4, C.R.S. For purposes of this subsection (2.5) only, "lienholder" shall not refer to the holder of a lien established pursuant to section 38-20-106.

(c) If a repair shop seeks to obtain a certificate of title for an abandoned motor vehicle for purposes of selling such vehicle, a repair shop, or where practicable, its agent, shall:

(I) At least fifteen days after the vehicle becomes an abandoned motor vehicle, establish the retail fair market value of the vehicle either by reference to sources generally accepted within the insurance industry, including price guide books and computerized valuation services, or by seeking a Colorado licensed automobile dealer or certified appraisal;

(II) (A) Have the abandoned motor vehicle inspected and a verification of vehicle identification number completed by a peace officer certified pursuant to section 42-5-206, C.R.S. Such inspection shall not be over one year old when the repair shop or its agent seeks to obtain a certificate of title to the abandoned motor vehicle.

(B) If the verification of the vehicle identification number reveals that the vehicle is stolen, the peace officer completing the verification shall recover and secure the motor vehicle and notify its rightful owner.

(III) Request a Colorado title record search of the vehicle identification number of the abandoned motor vehicle from the division or check the electronic system implemented by the department as required in section 42-4-2103 (3) (c) (III), C.R.S., to obtain correct information relating to any owner and lienholder of the abandoned motor vehicle as represented in the department records. In addition to requesting a Colorado title record search, if the abandoned motor vehicle is an out-of-state vehicle, the repair shop or its agent shall request a title and lien search from the other state.

(IV) Use the information provided through the Colorado title record search or out-of-state title and lien search to notify by certified mail the owner of record, including an out-of-state owner of record, and all lienholders of its possession of the abandoned motor vehicle. The notice shall specify the location of the repair shop and that, unless claimed within thirty calendar days after the date the notice was sent, as determined from the postmark on the notice, the motor vehicle is subject to sale. The repair shop or its agent shall keep the proof of notification on file for three years from the date of mailing.

(V) Purchase a surety bond for twice the retail fair market value of the abandoned motor vehicle as established under subparagraph (I) of this paragraph (c);

(VI) Write a statement under penalty of perjury that includes the following information:

(A) That the repair shop or its agent notified the owner and any lienholders of the abandoned motor vehicle as required in subparagraph (IV) of this paragraph (c) and that neither the owner nor any lienholder has attempted to claim the abandoned motor vehicle within the time prescribed in subparagraph (IV) of this paragraph (c);

(B) The business name and address of the repair shop;

(C) The year, make, model, and vehicle identification number of the abandoned motor vehicle;

(D) The date the abandoned motor vehicle was left at the repair shop;

(E) The name of the person who left the abandoned motor vehicle at the repair shop. The repair shop or its agent shall provide a copy of any estimate as defined in section 42-9-102 (1.5), C.R.S., or work order as defined in section 42-9-102 (6), C.R.S. If the parties entered into an oral agreement, the repair shop shall provide the record of such communication as specified in section 42-9-104 (1) (c), C.R.S.

(F) Whether the abandoned motor vehicle is roadworthy as defined in section 42-6-102 (15), C.R.S.; and

(VII) (A) Not less than thirty days after the postmarked date of the notice mailed pursuant to subparagraph (IV) of this paragraph (c), present documentation of the requirements specified in subparagraphs (I) to (VI) of this paragraph (c) to the county motor vehicle office in the county in which the repair shop is located and apply for a certificate of title for the abandoned motor vehicle.

(B) If the retail fair market value of the abandoned motor vehicle is less than two hundred dollars, the sale shall be made only for the purpose of junking, scrapping, or dismantling the motor vehicle, and the purchaser thereof shall not, under any circumstances, be entitled to a certificate of title. The repair shop shall cause to be executed and delivered to the person purchasing the motor vehicle a bill of sale. The bill of sale shall state that the purchaser acquires no right to a certificate of title for such vehicle. The repair shop shall promptly submit together to the department a report of sale and a copy of the bill of sale and shall also deliver a copy of the report of sale to the purchaser of the motor vehicle. Upon receipt of any report of sale with supporting documents on any sale made pursuant to this sub-subparagraph (B), the department shall purge the records for the vehicle as provided in section 42-4-2109 (1) (b) and shall not issue a new certificate of title for the vehicle. Any certificate of title issued in violation of this sub-subparagraph (B) shall be void.

(d) (I) After the repair shop or its agent has obtained a certificate of title for the abandoned motor vehicle as specified in paragraph (c) of this subsection (2.5), the repair shop or its agent shall sell the motor vehicle in a commercially reasonable manner at a public or private sale.

(II) Nothing in this paragraph (d) shall require a repair shop to be a licensed dealer pursuant to article 6 of title 12, C.R.S., for purposes of selling a motor vehicle pursuant to this section.

(e) The department may promulgate rules in accordance with article 4 of title 24, C.R.S. or create department-approved forms as may be appropriate to satisfy the requirements of this subsection (2.5).

(3) (a) The following provisions shall apply to molds, as defined in section 38-20-101:

(I) In the absence of an agreement to the contrary, a customer shall have all rights and title to any mold in the possession of a molder that was used to perform work for such customer; except that, if a customer has not claimed possession of a mold within three years following its last prior use, such mold shall be presumed to be abandoned by the customer and all rights and title to such mold shall be transferred to the molder who shall destroy or otherwise dispose of such mold as abandoned property in accordance with this section. For purposes of this subsection (3), "within three years following its last prior use" means any period following the last prior use of the mold and includes periods preceding September 30, 1998.

(II) Any molder who desires to have all rights and title to a mold shall send written notice to the customer's last-known address by registered or certified mail return receipt requested, signed by the addressee only. If the written notice is returned unclaimed, the molder shall publish said notice at least one day in a newspaper of general circulation in the area in which the mold is located. Such written notice shall clearly indicate that the molder intends to terminate the customer's rights and title to the mold described in such notice and shall include a recitation of the customer's rights, as set forth in this section.

(III) If a customer does not respond to the written notice sent pursuant to subparagraph (II) of this paragraph (a) within one hundred twenty days after the date of such notice to claim possession of the mold or does not make other contractual arrangements with the molder for storage of such mold, all rights and title of the customer to such mold shall transfer to the molder. Such molder may then destroy or otherwise dispose of the mold without risk of liability to the customer.

(IV) The molder shall maintain in such molder's records for a period of one year a copy of the notice sent pursuant to subparagraph (II) of this paragraph (a), together with the return receipt signed by the addressee, or, if said notice is returned unclaimed, said notice and the proof of return unclaimed shall be so maintained.

(b) Nothing in this subsection (3) shall require a molder to commence a judicial action to foreclose on a molders' lien if such mold is abandoned, as such term is defined in this section, and nothing in this subsection (3) shall be interpreted to eliminate any right of action a molder may have against a customer for unpaid charges, damages, costs, or attorney fees, if provided for by contract.