Transfer of ownership - By operation of law.

(a)(1) If the interest of an owner in a vehicle passes to another other than by voluntary transfer, the transferee shall, except as hereinafter provided in subsection (b), promptly mail or deliver to a designated agent the last certificate of title, if available, and proof of the transfer, together with his or her application for a new certificate in the form the department prescribes.

(2) Except as provided in subdivision (3), a person or entity initiating an involuntary transfer by operation of law in this state shall give notice of the action to the department at least 35 calendar days prior to the date of the transfer. The notice shall be in a manner as prescribed by the department and shall include all of the following:

a. The contact information for the person or entity filing the notice.

b. The motor vehicle's identification number, year, make, and model.

c. The date, time, and location of the involuntary transfer by operation of law.

(3) The notice provisions of this subsection shall not apply to a motor vehicle transferred pursuant to Chapter 13, to a motor vehicle transferred pursuant to a divorce decree, or to a motor vehicle transferred pursuant to documents creating a lien or other security interest in the motor vehicle.

(4) The department shall maintain and appropriately index public records of motor vehicles reported to it pursuant to this subsection. The department may provide lists of the vehicle identification numbers for the motor vehicles without fee in a manner as the department determines.

(5) An application for certificate of title may not be issued for a motor vehicle subject to an involuntary transfer by operation of law until the notice requirements of this subsection are satisfied.

(b) If the interest of the owner is terminated or the vehicle is sold under a security agreement by a lienholder named in the certificate of title, the transferee shall promptly make application to a designated agent for a new certificate in the form the department prescribes. The application shall be accompanied by the last certificate of title and an affidavit made by or on behalf of the lienholder that the vehicle was repossessed and that the interest of the owner was lawfully terminated or sold pursuant to the terms of the security agreement.

If the lienholder succeeds to the interest of the owner and holds the vehicle for resale, he or she need not secure a new certificate of title but, upon transfer to another person, shall promptly mail or deliver to the transferee the certificate, affidavit and other documents required by the department. The transferee shall promptly make application to a designated agent for a new certificate in the form prescribed by the department.

(c) Notwithstanding anything to the contrary contained in this section, a person holding a certificate of title whose interest in the vehicle has been extinguished or transferred other than by voluntary transfer shall forthwith mail or deliver the certificate to the department upon request of the department; and the delivery of the certificate pursuant to the request of the department does not affect the rights of the person surrendering the certificate; and the action of the department in issuing a new certificate of title as provided herein is not conclusive upon the rights of an owner or lienholder named in the old certificate.

(Acts 1973, No. 765, p. 1147, §15; Act 2016-358, §1.)