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2004 SESSION


CHAPTER 369
An Act to amend and reenact §§ 43-34, 46.2-1203 and 46.2-1603.1 of the Code of Virginia, relating to nonrepairable and salvage vehicles; vehicle demolishers; enforcement of certain liens.
[H 1119]
Approved April 8, 2004

Be it enacted by the General Assembly of Virginia:

1. That §§ 43-34, 46.2-1203 and 46.2-1603.1 of the Code of Virginia are amended and reenacted as follows:

§ 43-34. Enforcement of liens acquired under §§ 43-31 through 43-33 and of liens of bailees.

Any person having a lien under §§ 43-31 through 43-33 and any bailee, except where otherwise provided, having a lien as such at common law on personal property in his possession which he has no power to sell for the satisfaction of the lien, if the debt for which the lien exists is not paid within ten 10 days after it is due and the value of the property affected by the lien does not exceed $5,000, may sell such property or so much thereof as may be necessary, by public auction, for cash. The proceeds shall be applied to the satisfaction of the debt and expenses of sale, and the surplus, if any, shall be paid within thirty 30 days of the sale to any lienholder, and then to the owner of the property. A seller who fails to remit the surplus as provided shall be liable to the person entitled to the surplus in an amount equal to twenty-five dollars $25 for each day beyond thirty 30 days that the failure continues.

Before making the sale, the seller shall advertise the time, place, and terms thereof in a public place. In the case of property other than a motor vehicle required to be registered in Virginia having a value in excess of $600, ten 10 days' prior notice shall be given to any secured party who has filed a financing statement against the property, and written notice shall be given to the owner as hereinafter provided. If the property is a motor vehicle required by the motor vehicle laws of Virginia to be registered, the person having the lien shall ascertain from the Commissioner of the Department of Motor Vehicles whether the certificate of title of the motor vehicle shows a lien thereon. If the certificate of title shows a lien, the bailee proposing the sale of the motor vehicle shall notify the lienholder of record, by certified mail, at the address on the certificate of title of the time and place of the proposed sale ten 10 days prior thereto. If the name of the owner cannot be ascertained, the name of "John Doe" shall be substituted in any proceedings hereunder and no written notice as to him shall be required to be mailed.

If the value of the property is more than $5,000 but does not exceed $15,000, the party having the lien, after giving notice as herein provided, may apply by petition to any general district court of the county or city wherein the property is, or, if the value of the property exceeds $15,000, to the circuit court of the county or city, for the sale of the property. If, on the hearing of the case on the petition, the defense, if any made thereto, and such evidence as may be adduced by the parties respectively, the court is satisfied that the debt and lien are established and the property should be sold to pay the debt, the court shall order the sale to be made by the sheriff of the county or city. The sheriff shall make the same and apply and dispose of the proceeds in the same manner as if the sale were made under a writ of fieri facias.

If the owner of the property is a resident of this Commonwealth, any notice required by this section may be served as provided in § 8.01-296 or, if the sale is to be made without resort to the courts, by personal delivery or by certified or registered mail delivered to the present owner of the property to be sold at his last known address at least ten 10 days prior to the date of sale. If he is a nonresident or if his address is unknown, notice may be served by posting a copy thereof in three public places in the county or city wherein the property is located. For purposes of this section, a public place means a premises owned by the Commonwealth, a political subdivision thereof or an agency of either which is open to the general public.

If the property is a motor vehicle (i) for which neither the owner nor any other lienholder or secured party can be determined by the Department of Motor Vehicles through a diligent search of its records, (ii) manufactured for a model year at least six years prior to the current model year, and (iii) having a value of no more than $1,000 as determined by the provisions of § 8.01-419.1, a person having a lien on such vehicle may, after showing proof that the vehicle has been in his continuous custody for at least thirty 30 days, apply for and receive from the Department of Motor Vehicles title or a nonrepairable certificate to such vehicle, free of all liens and claims of ownership of others, and proceed to sell or otherwise dispose of the vehicle.

Whenever a motor vehicle is sold hereunder, the Department of Motor Vehicles shall issue a certificate of title and registration or a nonrepairable certificate to the purchaser thereof upon his application containing the serial or motor number of the vehicle purchased together with an affidavit of the lienholder that he has complied with the provisions hereof, or by the sheriff conducting a sale that he has complied with said order.

Any garage keeper to whom a motor vehicle has been delivered pursuant to §§ 46.2-1209, 46.2-1213 or § 46.2-1215 may after thirty 30 days from the date of delivery proceed under this section, provided that action has not been taken pursuant to such sections for the sale of such motor vehicle.

§ 46.2-1203. Sale of vehicle at public auction; disposition of proceeds.

If an abandoned motor vehicle is not reclaimed as provided for in § 46.2-1202, the locality or its authorized agent shall, notwithstanding the provisions of § 46.2-617, sell it at public auction. The purchaser of the motor vehicle shall take title to the motor vehicle free of all liens and claims of ownership of others, shall receive a sales receipt at the auction, and shall be entitled to apply to and receive from the Department a certificate of title and registration card for the vehicle. The sales receipt from the sale shall be sufficient title only for purposes of transferring the vehicle to a demolisher for demolition, wrecking, or dismantling, and in that case no further titling of the vehicle shall be necessary; however, such demolisher shall provide the Department acceptable documentation indicating that the vehicle has been demolished. From the proceeds of the sale of an abandoned motor vehicle the locality or its authorized agent shall reimburse itself for the expenses of the auction, the cost of towing, preserving, and storing the vehicle which resulted from placing the abandoned motor vehicle in custody, and all notice and publication costs incurred pursuant to § 46.2-1202. Any remainder from the proceeds of a sale shall be held for the owner of the abandoned motor vehicle or any person having security interests in the vehicle, as their interests may appear, for ninety 90 days, and then be deposited into the treasury of the locality in which the abandoned motor vehicle was abandoned.

§ 46.2-1603.1. Duties of licensees.

A. If a salvage vehicle is purchased by a salvage dealer and the vehicle is sold as a unit to anyone other than a demolisher, rebuilder, vehicle removal operator or scrap metal processor, the purchaser shall obtain from the Department a salvage certificate. If the sale is to a demolisher or vehicle removal operator, the salvage vehicle shall be assigned in the space provided for such assignments on the existing salvage certificate. If a vehicle is purchased by a salvage dealer and disassembled for parts only or demolished by a demolisher, the salvage dealer shall immediately and conspicuously indicate on the salvage certificate or title that the vehicle was disassembled for parts only or demolished and immediately forward the salvage certificate or title to the Department for cancellation. The Department shall cancel the title or salvage certificate and issue a nonrepairable certificate for the vehicle to the salvage dealer.

1. If a vehicle for which a title or salvage certificate or other ownership document has been issued by a foreign jurisdiction and is purchased by a salvage dealer or demolisher and disassembled for parts only or demolished by a demolisher, the salvage dealer or demolisher shall immediately and conspicuously indicate on the salvage certificate, title, or other ownership document that the vehicle was disassembled for parts only or demolished and immediately forward the salvage certificate, title or other ownership document to the Department for cancellation. The Department shall cancel the title, salvage certificate, or other ownership document and issue a nonrepairable certificate for the vehicle to the salvage dealer.

2. There shall be no fee for the issuance of a nonrepairable certificate.

B. If a licensee acquires any late model vehicle, he shall immediately compare the vehicle identification number assigned by the manufacturer or the Department or the identification number issued or assigned by another state with the title or salvage certificate of the vehicle and shall notify the Department as provided in subsection C of this section. Such comparison and notification shall not be required of a demolisher if the vehicle was acquired from a licensed salvage dealer, rebuilder, salvage pool, or vehicle removal operator and such licensee delivers to the demolisher a title or salvage certificate for the vehicle.

C. If the vehicle identification number has been altered, is missing, or appears to have been otherwise tampered with, the licensee shall take no further action with regard to the vehicle except to safeguard it in its then-existing condition and shall promptly notify the Department. The Department shall, after an investigation has been made, notify the licensee whether the vehicle can be freed from this limitation. In no event shall the vehicle be disassembled, demolished, processed, or otherwise modified or removed prior to authorization by the Department. If the vehicle is a motorcycle, the licensee shall cause to be noted on the title or salvage certificate, certifying on the face of the document, in addition to the above requirements, the frame number of the motorcycle and motor number, if available.

D. Except as provided in § 46.2-1203, after a vehicle has been demolished, the demolisher shall, within five working days, deliver to the Department the salvage certificate or title, certifying on the face of the document that the vehicle has been destroyed.

E. Except as provided in § 46.2-1203, it shall be unlawful for any licensee to purchase, receive, take into inventory, or otherwise accept from any person any late model vehicle unless, as a part of any such transaction, the licensee also receives a title, salvage certificate, nonrepairable certificate, or other ownership documents, issued by an appropriate regulatory agency within or without the Commonwealth, relating to such vehicle. Every licensee shall maintain as a part of his business records a title, salvage certificate, nonrepairable certificate, or other ownership documents, issued by an appropriate regulatory agency within or without the Commonwealth, pertaining to every late model vehicle in his inventory or possession.