Legislation would loosen Florida's title rules

A small group of Florida lawmakers is working on legislation that would change the state's motor vehicle title statute to give auto dealers affected by COVID-era work force disruptions leeway in how long it takes them to transfer titles.

The state auto dealers' association says something needs to be done, but Florida's Department of Highway Safety and Motor Vehicles has registered concerns about the early versions of the legislation. Online used-car retailer Carvana, which has recently run afoul of the department, said it played no part in drafting the legislation but nevertheless said changes to titling statutes could be useful. AutoNation, the largest franchised dealership group in the country, on the other hand doesn't think a change is necessary.

The current statute specifies dealers in Florida "must" obtain vehicle titles in purchasers' names and transfer them within a 30-day period. Some lawmakers want to extend that deadline or ease penalties for dealers who don't make it.

"There's a lot of reasons titling and registration deals get slowed down," Florida Automobile Dealers Association President Ted Smith told Automotive News. "How we knew it was a problem is dealers started contacting me, going, 'Hey, I'm getting a message from the Department of Highway Safety and Motor Vehicles that we're in violation of the titling law.' "

Smith said COVID-19 hampered Florida dealers — plus some of the institutions they interact with, such as lenders — because they didn't have enough workers or means to handle title transfers in the required timely manner.

A bill filed Dec. 21 by state Sen. Tom Wright would delete portions of the titling statute and add wording to say dealers "should" apply to transfer a title to the customer within a 30-day period, not "must" obtain one.

Altering the statute would allow auto dealers "some flexibility on [the] title transfer period due to the impact of COVID," said state Rep. David Smith in a Jan. 19 email to Automotive News. He filed on Jan. 10.

The proposed change, however, has raised questions at the consumer and regulatory levels.

A spokesperson for the Florida Department of Highway Safety and Motor Vehicles told Automotive News the agency has expressed concerns about how the bills are worded. The first version of the legislation cuts out a line that says state regulators can deny, suspend or revoke dealers' licenses for failing to transfer titles.

The legislation likely will get tweaks, David Smith said via email. State Rep. Andrew Learned, who joined as a co-sponsor of the House bill, elaborated on possible revisions in a phone call with Automotive News.

According to Learned, the legislation may be amended to say dealers still "must" transfer the title but extend the window to do so to 45 days.

The legislation also could ultimately get a "sunset" provision, meaning it would cease to have effect once the pandemic subsides, Learned and Smith both said.

The state Legislature could take more action on reworking the legislation when it's in session next week.

Wright's office responded to initial inquiries by Automotive News but did not return follow-up calls or answer emailed questions about the legislation. A follow-up email to David Smith's Jan. 19 email and an email to his office also were not returned.

It was not immediately clear how many affected dealers Wright spoke to in advance of filing the legislation last month. Ted Smith — who said he has spoken to Wright about the matter — told Automotive News the state senator indicated he heard about title transferring slowdowns from dealers in his area. Ted Smith said he did not lobby Wright to introduce the legislation.

The legislation is "not intended to help any specific company," David Smith said via email.

Online used-car retailer Carvana did not ask Wright's office to draft the legislation, multiple people told Automotive News.

In December, FDHSMV said it would suspend Carvana's dealer license if it does not submit by Jan. 31 title applications for vehicles it sold before Dec. 1, 2021.

A Florida lobbyist whose law firm has represented Carvana said he spoke with Wright but only after the bill had been written. Christoper Moya reiterated that the delays in Florida consumers getting their titles aren't happening solely because of dealers.

Financial institutions, such as lenders, are taking longer to release titles because of COVID-related staffing issues, he said.

"We're going to be lobbying for legislation separate from this legislation, for language that would give some relief first and foremost to the consumer, because the person who's ... suffering here is a consumer when they have a 30-day temp tag and the financial institution does not release the lien within those 30 days," Moya said.

A lien gives financial institutions the right to ownership of a financed vehicle if payments are not being made on it.

A lobbyist disclosure form shows Vroom also has representatives registered on the bills, but the company said in a statement it was "to help us understand the implications for our business and participate in the process on our behalf."

Vroom also is facing scrutiny from FDHSMV for how it handles title transfers.

The agency filed an administrative complaint against Vroom this month, citing 47 cases in which the company allegedly didn't get titles to consumers in 30 days.

Each state has its own system for managing vehicle titles. It all comes down to what's going on within each one, said Scott Lambert, 2021 chairman of the Automotive Trade Association Executives and president of the Minnesota Automobile Dealers Association.

Lambert said he didn't hear of a national uptick in dealers failing to be punctual about title transfers during his time as ATAE chairman. He declined to comment on the proposed changes to Florida's titling statute.

Marc Cannon, a spokesman for AutoNation, told WFLA in Tampa the company rarely has issues with transferring titles on time and doesn't think the law needs amending.

"We believe consumers should get their titles in a timely fashion, and the current legislation in place is there to protect consumers," he said. "Any dealer having a problem abiding by the law should refine the system they have in place so these title delays don't continue."