The following is an article reprinted with permission from The WWR Letter:
You’ve Got Mail (and Title)
By: Matthew Young, Esquire
In most states, repair garages and places of storage have certain remedies where a vehicle remains unclaimed by its owner for a certain period of time. In Ohio, this period of time is fifteen (15) days or more. One remedy is the ability to obtain an abandoned motor vehicle title clear of all liens and encumbrances, including those liens a credit union might have on the vehicle. However, prior to obtaining such a title, the repair garage or place of storage must undertake certain procedures. For example, in Ohio, the facility must send notice to any owner or lienholder stating where the vehicle is located and the value of the vehicle. It is important for a credit union to identify these letters and respond to them timely as failure to do so can result in the forfeiture of the credit union’s lien.
Specifically, upon receipt of such a letter, the credit union must make a claim to the motor vehicle at issue as soon as possible. In Ohio, a credit union is required to respond within fifteen (15) days from the mailing of the notice in order to maintain the credit union’s lien interest in the vehicle. Like most states, Ohio law mandates that the repair garage or place of storage search the Bureau of Motor Vehicle records to determine whether an outstanding lien exists on a motor vehicle. If such a lien exists, the repair garage or place of storage must notify the lienholder via certified mail (return receipt requested) and must indicate where the motor vehicle is located and the value of the motor vehicle. In Ohio, the ability to obtain an abandoned motor vehicle title is limited to vehicles with a value of less than $2,500.00. Despite this limitation, repair garages and places of storage routinely attempt to obtain abandoned motor vehicle titles for vehicles with the value in excess of $2,500.00, in violation of the statute. In other states the value of the vehicle may be irrelevant. Therefore, it is important to timely respond to an abandoned motor vehicle letter irrespective of the vehicle’s value.
If a vehicle remains unclaimed beyond a certain time, the owner of the repair garage or place of storage may execute an affidavit stating that it has complied with all notice requirements. Thereafter, they may obtain a certificate of title free of all liens and encumbrances.
If the party seeking an abandoned motor vehicle title fails to properly follow the relevant statute and obtains title anyway, that party may be liable in conversion to the lienholder and owner of the vehicle. A common example of this in Ohio is where a party applies for an abandoned vehicle title on a vehicle with a value greater than $2,500.00 or fails to include the value of the vehicle in the notice sent to the lienholder or owner of the vehicle. However, litigating such a matter can be costly and time consuming. Therefore, it is important to recognize an abandoned motor vehicle letter when you receive it and respond to it timely. If you have questions regarding your rights or the proper way to claim the vehicle, you should immediately contact your legal counsel.
Matt Young is an Associate in the Credit Union department in the Brooklyn Heights operations center. He can be reached at (216) 739-5726 or firstname.lastname@example.org.