Avoid DHSMV Administrative Complaints for Dealer Titling Violation
In early 2020 the Florida Department of Highway Safety and Motor Vehicles (“DHSMV”) served Administrative Complaints against multiple motor vehicle dealerships related to alleged untimely submission of titling paperwork resulting from a motor vehicle transaction. As most dealers are aware, Florida law (Fla. Stat. § 320.23(6)(a) & (b)) requires a motor vehicle dealer to submit an application for certificate of title within 30 days after delivery of a vehicle to a customer and also requires that a dealer who acquires a trade-in vehicle from a customer to file a Notice of Sale with the DHSMV within 30 days of the transaction.
While a few instances of untimely title-work may seem fairly innocuous, failure of a dealer to comply with these requirements could carry significant consequences, including, revocation of a dealer’s license and large monetary fines. Section 320.27(9)(b)(6), Florida Statutes, allows the DHSMV to deny, suspend, or revoke any motor vehicle dealer’s license upon proof that a dealer has committed, with sufficient frequency so as to establish a pattern of wrongdoing, violations to include failure to apply for transfer of a title. The DHSMV is further authorized to impose and collect fines up to $1,000 per violation against any licensee if it is found to have violated the title transfer requirements.
The Administrative Complaints served in early 2020 asserting titling violations appear to have been the result of a state-wide effort to audit dealership sales to evaluate titling compliance. While the DHSMV did not issue any Emergency Orders suspending or extending these statutory requirements as a result of COVID-19, it seems that the Department may have paused its efforts to enforce titling violations due to the impact of the Pandemic.
As we slowly progress back to something close to normalcy, it is important that dealers double-check that they are complying with titling requirements. If the Department begins to reinitiate its compliance enforcement efforts, non-compliant dealers can expect to receive Administrative Complaints asserting titling violations. If a dealer does receive an Administrative Complaint, it is imperative that a dealer immediately contact their dealer attorney. Failure by a dealer to respond and/or file a protest within 21 days of receiving the Administrative Complaint waives its right to dispute the factual claims of the Complaint. In effect, failure to respond allows the DHSMV to then issue a penalty of its own choosing against the dealer and strips the dealer of any right to dispute or appeal the decision. These penalties could be as high as a fine of $1,000 for each alleged titling violation, temporary suspension of the dealer’s license, or, at worst, the revocation of a dealer’s license.
As we entered the new year, dealers should re-evaluate their titling efforts to make sure that paperwork is being submitted with the 30 days deadline. If past-due submissions are still lingering, usually the result of customer non-responsive or failure to fully complete key documentation during the sale, it would be wise to make efforts to resolve these submissions so that no violations are present if/when the DSHMV reinitiates enforcement actions.
Any questions regarding these compliance obligations or strategy for responding to an administrative action should be directed to your dealer attorney.