COMMITTEE SUBSTITUTE

FOR

H. B. 2099

(By Delegates Farris, Beane and Kelley)


(Originating in the House Committee on the Judiciary)


[February 1, 1995]



A BILL to amend and reenact sections two, three and five, article
four-a, chapter seventeen-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, all relating to the perfection of liens against vehicles held as inventory by a registered dealer once title has been issued.

Be it enacted by the Legislature of West Virginia:
That sections two, three and five, article four-a, chapter seventeen-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted, all to read as follows:
ARTICLE 4A. LIENS AND ENCUMBRANCES ON VEHICLES TO BE SHOWN ON
CERTIFICATE OF TITLE; NOTICE TO CREDITORS AND PURCHASERS.

§17A-4A-2. Liens and encumbrances subsequently created.
(a) Liens or encumbrances placed on vehicles by the voluntary act of the owner (including a registered dealer holding title by assignment entered upon a certificate of title) after the original issue of title to be properly recorded must be shown on the certificate of title. In such cases, the owner or lienholder shall file application with the department on a blank furnished for that purpose, setting forth the lien or liens and such information and evidence of the lien in connection therewith as the department may deem necessary. Such information shall include the name and address of the lienholder, the nature and kind of his the lien, the date thereof, and the amount thereby secured. However, only the name and address of the lienholder shall be endorsed on the title certificate with the endorsement of the fact of such lien as hereinafter provided. The department, if satisfied that it is proper that the same be recorded, and upon surrender of the certificate of title covering the vehicle, shall thereupon issue a new certificate of title, showing the liens or encumbrances in the order of their filing being according to the date, hour and minute of receipt by the department of the application for same. For the purpose of recording a subsequent lien on a certificate of title, the subsequent lienor lienholder shall make a written request upon the lienor lienholder in possession of the certificate of title, accompanied by proof of the existence of his the subsequent lien, stating his need to have possession of the certificate of title for the purpose of having his lien recorded thereon by the department of motor vehicles. Thereupon, the lienor lienholder in possession of the certificate shall within a reasonable time, not to exceed ten days from the receipt of said written request, deliver the certificate of title to the requesting subsequent lienor lienholder.
Upon delivery of the certificate of title, the subsequent lienor lienholder shall immediately forward it and his the lienholder's own application to the department of motor vehicles for filing his the lien and recording the same on the certificate of title. Upon issuing the new certificate, the department shall thereupon send or deliver it to the holder of the first lien.
(b) The provisions of subsection (a) of this section shall not apply to vehicles held as inventory for sale by a registered dealer holding title by assignment entered upon a certificate of title. Liens and encumbrances placed on such vehicles by the voluntary act of the owner, shall be created and perfected in accordance with article nine, chapter forty- six of this code.
§17A-4A-3. Notice of lien; noninventory lien created by
voluntary act of the owner not shown on certificate of title void as to subsequent purchasers and lien creditors; exception as to deferred purchase money liens.

(a) Such A certificate of title, when issued by the department showing a lien or encumbrance, shall be deemed from and after the filing with the department of the application therefor adequate notice to the state, and its agencies, boards and commissions; and the United States government and its agencies, boards and commissions,; creditors; and purchasers that a lien against the vehicle exists and the recording of such reservation of title, lien or encumbrance in the county wherein the purchaser or debtor resides or elsewhere is not necessary and shall not be required or have any effect. The provisions of any other article, chapter or section of this code to the contrary notwithstanding, any lien or encumbrance placed upon a vehicle by the voluntary act of the owner (including a registered dealer holding title thereto by assignment entered upon a certificate of title) Notwithstanding any other provision of this code to the contrary, and subject to subsection (b) of this section and section four of this article, any lien or encumbrance placed upon a vehicle by the voluntary act of the owner but not shown on such certificate of title shall be void as to any purchaser for value or lien creditor, who, in either case, without notice of such lien or encumbrance, purchases such vehicle or acquires by attachment, levy or otherwise a lien thereupon: Provided, however, That a purchase money lien or encumbrance may be filed as hereinafter set forth in section four of this article with the effect therein stated: Provided further, That this section shall apply only to liens and encumbrances created on and after the effective date of this article.
(b) Creation and perfection of a lien against a vehicle held as inventory for sale by a registered dealer in accordance with article nine, chapter forty-six of this code shall be deemed adequate notice to the State and its agencies, boards and commissions; the United States government and its agencies, boards and commissions; creditors; and purchasers that a lien against the vehicle exists subject to the provisions of section three hundred seven, article nine, chapter forty-six of this code.

§17A-4A-5. Priority of liens shown on certificate.
The liens shown upon such a certificate of title issued by the department pursuant to applications for same shall have priority over any other liens against such vehicle, however created and recorded, except as hereinafter otherwise provided in this article.
NOTE: The purpose of this bill is to clarify the lien perfection procedures for used car inventory liens to require that such liens be created and perfected pursuant to article nine of the Uniform Commercial Code [§§46-9-101 et seq.] rather than Chapter 17A.