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Info Series: Selling a Car

One of the situations clients often present to me is this:

“Andy, I sold my car a few months back and I got a letter in the mail a few days ago that I owe money for a parking ticket on that car”.

Sometimes, the parking ticket is a toll transponder ticket for crossing a bridge or using a toll road without paying. In really bad cases, the unpaid ticket the client didn’t know about has already gone to collections. Often, the only reason the client discovered it was because they were denied credit somewhere.

Regardless of what it was you got in the mail, the bottom line is that the law (or, more accurately, the department of motor vehicles in your state) still believes that you are the registered owner of the vehicle you sold and, thus, are responsible for any tickets, fines, etc that the car accumulates.

To fix this, what you — as seller of the automobile — should have done is notify your department of motor vehicles that the car you sold is no longer yours. The way to do this in California is to file a Notice of Release of Liability form (REG 138) with the California Department of Motor Vehicles. The form is available as a PDF file you can print or you can even fill it out online if that works better for you.

Under California Vehicle Code section 5602, filing a REG 138 Notice of Release of Liability form cuts off the seller’s liability for future fines, tickets, fees, registration, etc that the car might accrue. Vehicle Code section 5900 says that the seller of a vehicle is required to file the REG 138 Notice of Release of Liability form within 5 calendar days of delivering the vehicle to the buyer. Under California Vehicle Code section 5902, the buyer of the vehicle is required to file the vehicle title (i.e. “pink slip”) with the DMV and — more importantly, from the DMV’s perspective — pay any transfer taxes/fees that are owed within 10 calendar days of receiving the vehicle from the seller.

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Andy Chen

Andy I. Chen is a lawyer licensed to practice law in California and New York. Andy maintains offices in Los Altos, California and Modesto, California. Under the New York Court of Appeals' 2015 decision in Schoenefeld v. State of New York, Andy does not accept cases from those in New York state. He does, however, know many lawyers in New York state and would be happy to make a referral.