Registration & Title
Policy Update
Delivery of Vehicle Without Assignment of Title;
Use of “Dealer” Plate After Delivery
June 2002
Purpose:
The purpose of this Policy Update is to make it
very clear that a dealer may not deliver a vehicle
to a purchaser unless the dealer assigns and
delivers to the purchaser, the RMV or a secured
party, the Certificate of Title (or Certificate of
Origin, if applicable) at the time of delivery of
the vehicle. Dealers who engage in the practice
of selling a vehicle before the dealer has actually
obtained the existing title run the risk of
violating the law. They also risk suspension or
revocation of their “Dealer” plate and their EVR
Permit (if applicable). This 2002 Registration
& Title Policy Update supercedes the Policy
Update issued in July 1998 covering the same
subject.
Massachusetts law requires a dealer who enters
into a contract to sell a ve hicle to a purchaser to
assign and deliver to the purchaser, the RMV
or a secured party, the vehicle title at the time
the dealer delivers the vehicle. The RMV
believes that a dealer who allows a purchaser to
take possession of a vehicle, for whatever reason,
after a contract has been entered into, has made a
“delivery” of the vehicle. If the dealer has failed
to execute the assignment and warranty of title
and failed to mail or deliver it as required by law,
at the time of “delivery” of the vehicle, the dealer
has violated the law. Furthermore, once the
dealer has accepted the purchaser’s offer by
entering into a written contract, the dealer may
not allow the purchaser to operate the vehicle
with the “Dealer” plate attached. The dealer also
may not attach the registration plate of the
purchaser’s traded-in vehicle to the purchased
vehicle, or suggest that it is permissible to do so,
if the dealer has not made the required
assignment of title at the time of delivery of the
vehicle.
Requirement of Assignment and Warranty of
Title:
Generally, a customer becomes the purchaser of
a vehicle when the customer and the dealer enter
into a legally recognized purchase contract for a
vehicle owned by the dealer, appropriate
payment is made or arranged, the dealer properly
assigns the title to the purchaser, the dealer mails
or delivers the title to the purchaser, the RMV, or
the lienholder, and the purchaser takes delivery
of the vehicle. Massachusetts General Laws,
(M.G.L.) Chapter 90D, § 15 (a) states that :
If an owner of a vehicle for which a
certificate of title has been issued under
this chapter transfers his interest therein . . .,
he shall at the time of the delivery of
their vehicle, an assignment including the
actual odometer reading and warranty of
title to the transferee in the space provided
therefore on the certificate . . ., and cause the
certificate and assignment to be mailed or
delivered to the transferee or to the registrar.
(Emphasis Added).
Although Chapter 90D, §16 does not require a
dealer to apply for a new title for a vehicle he has
purchased for resale, the dealer must pass along
the title has has received. Upon transfer of the
vehicle, the dealer must “promptly execute the
assignment and warranty of title by a dealer . . .
and . . . deliver the certificate to the registrar or
transferee with the trasnferee’s application for
a new certificate.”
Therefore, it is against the law for a dealer to
“deliver” a vehicle to a purchaser if the dealer
has not property assigned the Certificate of Title
at the time of delivery of vehicle.
Lessors/Dealers/Leases Cautioned:
Lessors, dealers and lessees need to be aware that
when a lessee chooses to exercise a “buyout
option” for a leased vehicle, the transfer of
“ownership” does not occur until the title has
been properly assigned to the lessee/purchaser.
The lessee/purchaser will probably want to
continue driving the vehicle, without
interruption, after exercising the option. In
Page 46
order to insure that the lessee/purchaser does not
take “delivery” prior to a proper assignment of
title, it is important for the lessee who intends
to exercise a buyout option to notify the lessor
and dealer should remind the lessee to provide
early notice.
Consumer Protection Act Violation:
The Attorney General’s Regulation, at 940 CMR
5.04 (part of the Code of Massachusetts
Regulations), govern the form and contents of the
“Motor Vehicle Purchase Contract” that dealers
are required to use. The Regulatio ns also declare
certain acts or practices to be unfair or deceptive,
in violation of M.G.L. c. 93A, the Consumer
Protection Act. The Regulation, at 940 CMR
5.04 (11), requires a dealer to execute an
assignment and warranty of the title and to mail
or deliver it to the purchaser, the Registrar or the
secured party, as the case may be, on the day the
vehicle is delivered to the consumer. The
Regulation declares it to be an unfair or
deceptive act or practice for a dealer to fail to do
so.
Use of “Dealer” Plate:
A General Registration and General Registration
“Dealer” Plate may be issued by the Registrar,
pursuant to M.G.L. c. 90, §5, to a person who is
licensed by the city or town and is principally
and substantially engaged in the business of
selling motor vehicles or trailers. Chapter 60A
allows a dealer, the dealer’s spouse, and certain
sales employees, to use a dealer-owned vehicle
with a “Dealer” plate attached, for personal use.
The Registrar’s Regulation at 540 CMR 18.04
(3), allows a vehicle owned by the dealer to be
operated for “sale or demonstration purposes”
with the “Dealer” plate attached (but not as a
“parts” or “service” vehicle). A customer may,
of course, legally take a demonstration drive in a
vehicle from the dealer’s inventory and operate it
with the “Dealer” plate. Also, the dealer may
operate the vehicle, for demonstration or sale
related purposes with a “Dealer” plate attached,
at any time. The dealer may even operate a
vehicle with the dealer plate after entering into a
contract to sell the vehicle (for the purposes of
obtaining service or alterations to the vehicle
prior to delivery to the purchaser). However,
once the dealer has accepted an offer for the
vehicle from a purchaser, entered into a
contract for the vehicle, and made delivery of
the vehicle to the purchaser, neither the dealer
nor the purchaser may operate the vehicle
with the “Dealer” plate attached. (Note: the
dealer, or employee of the dealer, may drive the
vehicle on a “Dealer” plate to make delivery to
the purchaser but once the vehicle has been
delivered, the dealer must retain possession of
the “Dealer” plate.)
Suspension or Revocation of the “Dealer”
Plate:
Pursuant to 540 CMR 18.02 (2)(a)3, to receive or
retain a general registration and general registration number plate, a dealer must be in compliance with applicable law. If the Registrar determines that a dealer is in violation of applicable
law, the Registrar may suspend or revoke the
general registration and general registration
number plate(s). If the dealer does not execute
the required assignment and warranty of title
at the time of delivery of the vehicle, the
dealer is in violation of the law that applies to
that sale. Also, such conduct may constitute a
violation of the Consumer Protection Act. The
failure of the dealer to abide by the laws
regarding the timely assignment and delivery of
the title document may result in disciplinary
action against the dealer’s general registration
and general registration pla tes. This may include
suspension or revocation.
Registration Transfer Without Assignment of
Title:
The Seven Day Registration Transfer Law, in
M.G.L. c. 90 §2, allows a vehicle owner a period
of seven (7) calendar days (beginning on the date
of transfer of the registered motor vehicle or
trailer that is being sold, traded, etc.) to transfer
the registration to the newly acquired motor
vehicle or trailer. During this seven-day period,
the owner may operate the newly acquired
vehicle with the registration plate(s) from the
previously registered vehicle that has been sold,
traded, etc. However, the purchaser may not
make use of the plate transfer provisions of the
Seven Day Registration Transfer Law, unless the
dealer has properly assigned the title (or Certifi-
cate of Origin). A dealer should NOT suggest
otherwise. See the FAQ’s About the SevenDay Registration Transfer Law on the RMV’s
web site at www.mass.gov/rmv under FAQ’s
(Registration).
Application to EVR Dealers:
Purchasers who might otherwise benefit from the
Seven Day Registration Transfer Law should not
be encouraged to transfer their plate to the newly
acquired vehicle by dealers who are part of the
RMV’s EVR program (Electronic Vehicle
Registration). Since the purpose of EVR is to
provide on-site registration, EVR dealers who
have made the proper assignment of title should
be registering the vehicle unless it is past
normal RMV business hours, is a weekend or
holiday, or the purchaser chooses to register
the vehicle through an RMV branch office. An
EVR dealer who has not made a proper
assignment of title but who allows or
encourages a purchaser to transfer the registration plate(s) under the Seven Day Law will
be scheduled for an RMV disciplinary Hearing
which may result in suspension or revocation of
the EVR Permit.
Violation: Civil and Criminal Penalties:
As noted, a dealer’s failure to execute and
deliver an assignment and warranty of title at the
time of delivery of the vehicle violates M.G.L.
c. 90D §15 (a) and §16. A dealer who also
violates M.G.L. c. 93A §2, the Consumer
Protection Act, or a regulation promulgated
thereunder, may be
civilly liable to the
consumer for up to three times the consumer’s
damages, plus attorney fees and costs. The
Attorney General may seek, in a separate civil
action, restitution, civil penalties, costs and
injunctive relief. Furthermore, if a dealer has
still not executed and delivered an assignment
and warranty of title within ten (10) days after
the time required in M.G.L. 90D, §15(a) and §16,
the dealer may be prosecuted for a criminal
violation pursuant to Chapter 90D, §32(b) and
punished by a fine of not less than $500.00 nor
more than $1,000.00, or by imprisonment in a
jail or house of correction for not more than
six months, or both.
No Title Issued – Vehicle Last Registered in a
State Which Did Not Require a Title:
If a Massachusetts dealer sells a vehicle that does
not have a title document because the vehicle is
over a certain age and was last registered in a
state that did not require a title for a vehicle of
that age, the dealer must comply with the
following procedure if the vehicle is sold to a
Massachusetts resident or another Massachusetts
dealer.
The selling dealer must provide the retail
purchaser (or the other dealer) with a copy of the
last registration certificate at the time of delivery
of the vehicle to the purchaser. A retail
purchaser will not be allowed to register a
vehicle as described above in Massachusetts
without a copy of the last registration certificate.
If the document is not presented at the time of
registration, along with the required Purchase &
Sale Agreement, RMV staff are instructed to
inform the RMV customer that it is the
selling dealer’s responsibility to provide the
document and will refer the customer back to the
selling dealer. The RMV will not issue a “Title
Only” to the dealer owning the vehicle.
Questions?
If you have title-related questions, call the RMV
Title Division at 857-368-8050. If you
have questions involving “Dealer” plates,
call the Section 5 Division at 857-368-8030.
Questions involving other RMV-related matters
should be directed to the RMV Telephone
Center at 857-368-8000.
Massachusetts General Law, Chapter 90,
Section 2 says, in part:
“…A person who has attained 18 years of age
and who transfers the ownership of a registered
motor vehicle or trailer owned by him to
another or who loses possession thereof and who
intends to transfer the registration of such motor
vehicle or trailer to a newly acquired new motor
vehicle or newly acquired used motor vehicle of
the same type and having the same number of
wheels may, subject to other provisions of this
chapter, operate such newly acquired
new
motor
or trailer or newly acquired used
motor vehicle or trailer for a period beginning
from the date of transfer until five o’clock
post meridian of the seventh calendar day
following the date of transfer within the
period for which the transferred vehicle was
registered; provided, however, that the registration plates issued upon registration of the
transferred motor vehicle or trailer shall carry
an original copy of the bill of sale reciting
the registration number to be transferred
from the former vehicle to the newly acquired
vehicle or, the certificate of transfer issued by
the dealer on a form approved by the
registrar in place of the certificate of
registration…” (current as of March 2002).