Colorado § 42-6-109 - Sale or transfer of vehicle - program.

§ 42-6-109. Sale or transfer of vehicle - program.

(1) Except as provided in section 42-6-113, a person shall not sell or otherwise transfer a motor or off-highway vehicle to a purchaser or transferee without delivering to the purchaser or transferee a certificate of title to the vehicle duly transferred in the manner prescribed in section 42-6-110. The certificate of title may be in an electronic format. Except as provided in section 42-6-115, a purchaser or transferee does not acquire any right, title, or interest in and to a motor or off-highway vehicle purchased by the purchaser or transferee unless and until the purchaser or transferee obtains from the transferor the certificate of title duly transferred in accordance with this part 1. Any party to the transaction may request either a paper or electronic version of a certificate of title.

(2) Repealed.

(3) (a) Beginning January 1, 2019, the department shall implement a voluntary program for an owner of a motor vehicle to notify the department or an authorized agent after ownership of the motor vehicle is transferred to another person in accordance with subsection (1) of this section.

(b) A report of ownership transfer is properly filed if the report is made in a manner, which may include by electronic means, approved by the department and received by the department or authorized agent within five business days after the transfer of ownership, and includes the following:

(I) The date and time of sale or transfer;

(II) The full name of the owner of the motor vehicle before the transfer;

(III) The vehicle identification number of the motor vehicle; and

(IV) An affidavit, signed under penalty of perjury, that the requirements for the transfer of ownership in subsection (1) of this section have been satisfied.

(c) The department shall:

(I) Provide or approve one or more methods for reporting the transfer of ownership;

(II) Notify, with the owner's registration renewal information, the owner of a motor vehicle of the option to report the transfer of ownership of a motor vehicle;

(III) Notify the public of the option to report a transfer of ownership of a motor vehicle;

(IV) Place instructions on each certificate of title document issued on or after August 8, 2018, for reporting the transfer of ownership of a motor vehicle; and

(V) Forward a copy of the report to each lienholder of record.

(d) (I) If an owner reports a bona fide transfer of ownership of a motor vehicle in accordance with this section, the owner is not liable in or subject to any civil or criminal action brought against the following after the motor vehicle was transferred:

(A) The operator of the motor vehicle, arising from the use of the motor vehicle; and

(B) The motor vehicle.

(II) This subsection (3)(d) does not apply to a civil or criminal action if the action is brought against the owner for the owner's:

(A) Negligence in permitting the purchaser to drive the motor vehicle at the time of sale;

(B) Failure to comply with any law governing the sale of the motor vehicle;

(C) Negligence in selling the motor vehicle;

(D) Material misstatement or omission about the condition of the motor vehicle; or

(E) Failure to make any disclosure required by law.

(e) A report filed under this subsection (3) does not extinguish or impair the rights of any lienholder.

(f) This subsection (3) does not require the owner who transfers a motor vehicle to another person to report the sale to the department in accordance with this subsection (3).

(4) (a) A record covered by this article 6, including a certificate of title, a document necessary to issue a certificate of title, or a signature on the record or document may not be denied legal effect, validity, or enforceability solely because it is in the form of an electronic record, document, or signature. Except as otherwise provided in this article 6, if a rule of law requires a record to be in writing or provides consequences if it is not, an electronic record satisfies that rule of law.

(b) For a record, document, or signature to be legally effective, valid, or enforceable, a person need not obtain a written power of attorney solely because the record, document, or signature is in an electronic form.

(c) This subsection (4) applies to and in a court of law.

(d) This subsection (4) does not require the department to implement a system to electronically accept records, documents, or signatures.

Source: L. 94: Entire title amended with relocations, p. 2453, § 1, effective January 1, 1995. L. 2000: Entire section amended, p. 1658, § 4, effective July 1, 2001. L. 2005: Entire section amended, p. 811, § 7, effective August 8. L. 2012: Entire section amended, (SB 12-095), ch. 112, p. 388, § 2, effective August 8. L. 2013: (1), IP(2), and (2)(b) amended, (SB 13-280), ch. 407, p. 2380, § 6, effective June 5. L. 2018: (3) added, (SB 18-073), ch. 83, p. 680, § 1, effective August 8; (4) added with relocations, (SB 18-255), ch. 405, p. 2386, § 2, effective August 8. L. 2026: (1), (3)(a), and (3)(b)(IV) amended and (2) repealed, (HB 26-1041), ch. 14, p. 59, § 1, effective August 12.

Editor's note: (1) This section is similar to former § 42-6-108 as it existed prior to 1994, and the former § 42-6-109 was relocated to § 42-6-110.

(2) Subsection (4) is similar to § 42-6-102 (5)(b) as it existed prior to 2018.

Cross references: For the legislative declaration in the 2012 act amending this section, see section 1 of chapter 112, Session Laws of Colorado 2012.

ANNOTATION

Law reviews. For comment on Codding v. Jackson, 132 Colo. 320, 287 P.2d 976 (1955), appearing below, see 28 Rocky Mt. L. Rev. 266 (1956).

Annotator's note. Since § 42-6-109 is similar to § 42-6-108 as it existed prior to the 1994 amending of title 42 as enacted by SB 94-1, relevant cases construing that provision have been included with the annotations to this section.

To the extent this section and § 16-13-101 et seq. are inconsistent in the context of civil forfeiture proceedings, the specific provisions contained in the forfeiture statute prevail and the timing of the delivery of the certificate of title was not dispositive. People v. One 1968 Chevrolet 2-Door, 895 P.2d 1177 (Colo. App. 1995) (decided under law in effect prior to 1994 amendment and relocation).

Purpose of this section is to insure that purchasers of automobiles, whether individual citizens or dealers, as well as lenders who finance automobile purchases, can readily and reliably ascertain the status of the seller's title to the automobile without recourse to other official state records. Guy Martin Buick, Inc. v. Colo. Springs Nat'l Bank, 184 Colo. 166, 519 P.2d 354 (1974).

The purpose of this section and § 42-6-109 is to require the certification of title to motor vehicles so as to disclose the rights of third persons for enforceability purposes. United Fire & Cas. Co. v. Perez, 161 Colo. 31, 419 P.2d 663 (1966); Randall v. Carroll, 30 Colo. App. 45, 488 P.2d 250 (1971).

Intent of section. This section is intended to hold in abeyance both the seller's power to transfer and the purchaser's right to receive any right, title, or interest in the automobile to be sold until such time as the certificate of title is delivered to the purchaser. Guy Martin Buick, Inc. v. Colo. Springs Nat'l Bank, 184 Colo. 166, 519 P.2d 354 (1974).

The statutes are designed to provide a method whereby the licensing authorities may check and control the chain of title as it passes from one private purchaser to another, to the end that bogus or illegal transactions may more easily be detected. Codding v. Jackson, 132 Colo. 320, 287 P.2d 976 (1955).

The provisions governing transfer of title to motor vehicles are mandatory. Codding v. Jackson, 132 Colo. 320, 287 P.2d 976 (1955); Amarillo Auto Auction, Inc. v. Hutchinson, 135 Colo. 320, 310 P.2d 715 (1957); Bill Dreiling Motor Co. v. St. Paul Fire & Marine Ins., 28 Colo. App. 318, 472 P.2d 153 (1970).

Unless strict compliance with the statute is made, no interest or right of any kind can be transferred. Codding v. Jackson, 132 Colo. 320, 287 P. 2d 976 (1955); Amarillo Auto Auction, Inc. v. Hutchinson, 135 Colo. 320, 310 P.2d 715 (1957); Bill Dreiling Motor Co. v. St. Paul Fire & Marine Ins., 28 Colo. App. 318, 472 P.2d 153 (1970).

Upon transfer of a vehicle, the transferee must obtain a certificate of title in order to obtain any enforceable rights to the vehicle. Bill Dreiling Motor Co. v. St. Paul Fire & Marine Ins., 28 Colo. App. 318, 472 P.2d 153 (1970).

Provisions provide manner in which right, title, or interest may be transferred. The provisions of the motor vehicle code provide the sole and exclusive manner in which the legal title, as well as any right, title, or interest in a motor vehicle may be transferred, sold, or assigned. Codding v. Jackson, 132 Colo. 320, 287 P.2d 976 (1955).

Unless a purchaser complies with the statute, he cannot be considered a purchaser in good faith. Codding v. Jackson, 132 Colo. 320, 287 P.2d 976 (1955).

Certificate of title act does not defeat insurable interest when the purchasers do everything they can to comply with its provisions, but the statutory protection fails when the vehicle is stolen and its identification number changed. Webb v. M.F.A. Mut. Ins. Co., 44 Colo. App. 210, 620 P.2d 38 (1980).

Nondelivery of the certificate of title does not prevent change of ownership as between the parties to the transaction. United Fire & Cas. Co. v. Perez, 161 Colo. 31, 419 P.2d 663 (1966); Waggoner v. Wilson, 31 Colo. App. 518, 507 P.2d 482 (1972); Kerns v. Nat'l Union Fire Ins. Co., 281 F. Supp. 3d 1126 (D. Colo. 2017).

Retention of an inchoate security interest in a vehicle does not compel a different outcome. Kerns v. Nat'l Union Fire Ins. Co., 281 F. Supp. 3d 1126 (D. Colo. 2017).

Failure to deliver certificate of title does not prevent acquisition of ownership rights as between the parties to the transaction. Colo. Auto & Truck Wreckers Ass'n v. Dept. of Rev., 618 P.2d 646 (Colo. 1980).

Failure to have a certificate of title issued does not defeat the contractual rights of the seller. Randall v. Carroll, 30 Colo. App. 45, 488 P.2d 250 (1971).

This section and § 42-6-109 do not control the results of an action brought for damages for breach of contract between the original parties to the transaction. Randall v. Carroll, 30 Colo. App. 45, 488 P.2d 250 (1971).

Purchaser without certificate takes subject to rights of valid prior mortgages. The purchaser of a motor vehicle other than from a dealer as defined in § 42-6-102 without delivery of certificate of title takes subject to rights of valid prior mortgages. First Nat'l Bank v. Chuck Lowen, Inc., 128 Colo. 104, 261 P.2d 158 (1953).

Purchaser acquired voidable title when certificates delivered to bank as security for bank's loan to purchaser. See Guy Martin Buick, Inc. v. Colo. Springs Nat'l Bank, 184 Colo. 166, 519 P.2d 354 (1974).

Showing of mortgages on title certificates. The mobility of motor vehicles and their frequent sale in states far distant from the county of the mortgage filing has resulted in a new method of protection by means of showing mortgages on the title certificate, which can be carried with the car, rather than by record in the files of a distant and probably unknown county. Under the policy of our law the requisite of clear title is the possession of a certificate free of lien. Title depends on receipt of such a certificate, and ignorance of mortgages must be proven by the certificate. First Nat'l Bank v. Chuck Lowen, Inc., 128 Colo. 104, 261 P.2d 158 (1953); Loye v. Denver United States Nat'l Bank, 431 F.2d 402 (10th Cir. 1965).

A title to an automobile does not vest immediately upon an assignment of the old certificate. Codding v. Jackson, 132 Colo. 320, 287 P.2d 976 (1955).

This section must be construed with § 42-6-131. Under § 42-6-131, the recognition of a foreign mortgage in Colorado depends not upon its being filed for record, but upon its appearing on the certificate of title. That section must be construed together with this section which provides that except in cases not here applicable no person shall sell a motor vehicle without delivering a certificate of title and that no purchaser shall acquire any right, title, or interest in a motor vehicle unless he shall first obtain from the transferor the certificate of title thereto. By virtue of that section, on failure of an out-of-state dealer to deliver such certificate, whether because it showed a mortgage on its face or because it was deposited with the mortgagee, the purchaser could acquire no title as against prior mortgagees, and his rights are subordinate to such as are valid. First Nat'l Bank v. Chuck Lowen, Inc., 128 Colo. 104, 261 P.2d 158 (1953); Federico v. Universal C.I.T. Credit Corp., 140 Colo. 145, 343 P.2d 830 (1959).

Exception to section. Section 42-6-134 is an exception to the title transfer requirements of this section and § 42-6-109. Colo. Auto & Truck Wreckers Ass'n v. Dept. of Rev., 618 P.2d 646 (Colo. 1980).