Cars for Sale and the Release of Liability

By Hanna Nilson

Cars for sale as a private transaction can be tricky. One thing that can be easy to forget is the final step of submitting your Release of Liability from.

After becoming anxious about closing the deal for your sold car, it’s easy to overlook the important process of filling out and submitting your Release of Liability form to your local Department of Motor Vehicles (DMV). Nonetheless, as a required procedure for selling your used car, the release of liability stands as one of the final phases of completing the car selling process.
 

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Release of Liability: When selling a car, the Note for Release of Liability (NRL) is used to notify the city that you have sold or transferred your used car or truck. It is required by law, that the seller responsible for the car (s) for sale; notify the DMV within five business days from the official date upon which the seller has transferred the car title.

In the process of selling your car, simply reporting the sale or transfer to the department of motor vehicles (DMV), does not constitute a completed transfer of ownership. In other words, the record is not permanently transferred out of your name until the department receives this completed Application for Transfer. Unfortunately, certain fees may also apply to the new owner for this process. However, as the seller of your car (s), this is not something you should have to worry about.

NOTE: Legal owner transfers, which are transfers between lenders (or a removal of a loan holder from the title), do not require an Release of Liability.

Generally, in order to complete and process the Release of Liability, you must include the following information:

• License plate number
• Last five digits of the vehicle identification number
• New owner's name and address
• Description of the vehicle or vessel including the vehicle license plate or vessel CF number.

Remember: Do not key or print any symbols in the license plate configuration. Only the vehicle identification number or vessel hull number is required.

• Vehicle make or vessel builder
• Date of sale
• Year and Model
• The new owner’s name and address
• Vehicle odometer reading as of the sale or transfer date
• Seller’s or lessee’s name and address

NOTE: If any of this information is missing, the department may be unable to update the vehicle record and/or these conditions may disqualify your liability exemption.

Finally, both the buyer and seller of the car or cars for sale might find it useful to know that the previous owners of any car for sale will always remain on the car records until the transfer is complete. So, don’t let the car for sale out on the roads in possession of someone you don’t trust, unless you are willing to be held accountable for any damages and/or accidence. This rule applies because, only when the buyer's Application for Transfer is completed, using the endorsed car Title received from the seller, is the previous owner no longer held responsible for civil or criminal actions arising with the vehicle after the date of sale.

When this form is properly completed and the information is recorded by DMV, liability for parking and/or traffic violations and civil litigation resulting from operation after the date of sale becomes the responsibility of the new buyer.

For example, the seller (previous owner of the car) will no longer be liable for any of the following:

• Parking or traffic violations resulting from operation of the vehicle after the sale or transfer date.

• Registration renewal fees and penalties resulting from operation of the vehicle after the date of sale.

• Civil litigation resulting from use of the vehicle after the date of sale.

It is important for both the buyer and seller to understand that once the NRL has been properly completed recorded by DMV, liability for parking and/or traffic violations and/or civil litigation, which may be resulting from operation after the date of sale, becomes the responsibility of the successive owner of the purchased car. Furthermore, when the NRL information is received by the DMV, no further Vehicle Registration Renewal notices will be mailed to the previous owner.

Remember, different states may require different information. So, while the preceding information might serve as a preparatory guide for informational purposes; do not take it word-for-word! Check with your city or state DMV for your localized NRL forms.

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