You asked us to find whether the New England states, New York, or New Jersey issue motor vehicle titles to lienholders or whether they issue them to the vehicle owner. You also wanted to know if any of these states have laws establishing requirements on vehicle sellers similar to those enacted in PA 07-172. That act requires anyone selling a motor vehicle at a public or private auction to provide the buyer, at the time of sale, with (1) a valid certificate of title, (2) the assignment and warranty of the title by the seller, or (3) other evidence of title issued by another state or country. The evidence of title must disclose any lien, security interest in, or other encumbrance on the vehicle. Violations of these requirements may result in a civil penalty of up to $ 1,000.

Of the seven states for which you requested this information, only New York appears to issue a motor vehicle's certificate of title to the owner. All of the other states issue titles to the lienholder, if there is one. The New York requirement is established by law (Vehicle & Traffic, § 2109). Besides looking at each state's law, we were able to verify this through information compiled by a secondary source, the American Association of Motor Vehicle Administrators.

None of the states appear to have laws regarding motor vehicle auctions identical to those of PA 07-172, but New York does apply some statutory requirements to automobile auctioneers. In New York, an automobile auctioneer may not sell a motor vehicle unless the auctioneer “has in his possession the currently valid certificate of title to that motor vehicle, or, if a certificate of title is not required…the appropriate proof of ownership for such motor vehicle. ” The title or proof of ownership must be delivered to the purchaser “immediately upon acceptance of tender of payment. ” (General Business, § 23). In addition, the law requires that in any contract of sale by an automobile auctioneer there must be a warranty that (1) the title or proof of ownership conveyed is good and its transfer rightful and (2) the goods are delivered free from any security interest or other lien or encumbrance of which the buyer at the time of contracting has no knowledge.

Any waiver of this warranty by a buyer is deemed contrary to public policy and is considered void and unenforceable. Attempts by auctioneers to exclude or modify the required warranties are considered violations of the law.

Several types of auctions are exempt from these requirements. These exemptions include auctions: (1) at which vehicles are being sold only pursuant to repossession, foreclosure of a lien, or by the executor or administrator of an estate; (2) conducted pursuant to a court order; (3) conducted by federal, state, or local governmental entities; (4) involving fleet vehicles owned by regulated public utilities; (5) conducted on a farm involving only farm equipment; and (6) at which bids are accepted only from registered motor vehicle dealers, dismantlers, or certified scrap processors.

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