New Ohio legislation allows dealers and repair facilities to have abandoned cars towed by a service | Greater Cincinnati Automobile Dealers Association

New Ohio legislation allows dealers and repair facilities to have abandoned cars towed by a service

OADA pursued new legislation that allows both motor vehicle dealers and repair facilities to have abandoned vehicles towed by a towing service. 
 
As long as the dealership follows the process outlined in statute, it is protected against consumer claims of conversion or damage due to the towing. This new law was passed in the 2021-22 Biennial Budget and will go into effect on September 30, 2021, and should not be used until then.  
 
The critical components of the new abandoned towing statute (R.C. 4513.602) are outlined in more detail follow.  

Summary of Abandoned Towing StatuteUnder the new statute, a motor vehicle dealer or a repair facility may have a vehicle in its possession removed by a towing service if:

  • It performs a search of the records with the BMV to determine the titled owner and any lienholders, See BMV Form 1173; 
  • Sends a notice to the last known address of the titled owner and any lienholders by certified, express mail (return receipt requested) or any form of delivery requiring a signed receipt; and
  • The vehicle is not collected within fourteen calendar days from when the consumer and/or any lienholders received notice (as determined by the signed return receipt) or if delivery was not possible, the date of notification that delivery was not possible.

The statute does outline several pieces of information that must be included in the notice to the titled owner and any lienholders. Specifically, the dealer or repair facility must include:

  • The address where the vehicle is located;
  • A statement indicating that the dealer or repair facility will have the vehicle towed if not claimed within 14 calendar days after either the date the notice was received or the date the dealer or repair facility receiving notification that delivery was not possible; and 
  • A statement that the towing service or storage facility that takes possession of the vehicle may obtain title under R.C. 4513.603.

Motor vehicle dealers and repair facilities that comply with this statute are protected in two distinct ways. First, these entities are protected from consumer claims of damage, conversion, or any other claim resulting from the removal, towing, or storage of the motor vehicle so long as they comply with the process. 
Additionally, the dealership or repair facility may continue to pursue legal recourse against a consumer for any claim even if it has the vehicle removed from its facility unless possession is a required element of that cause of action. For example, a dealership who repaired a vehicle and is owed payment may pursue a claim for breach of contract in court even after having the customer’s vehicle towed under this statutory provision.Other important provisions of the statute include:

  • Failure to remove the vehicle within 14 calendar days of the notice constitute consent by the owner and any lienholder to the vehicle’s removal and storage, the payment of any charges incurred for the removal and storage of the motor vehicle, and the right of the towing service or storage facility to obtain title pursuant to R.C. 4513.603.
  • These provisions still apply even if the customer who drops off the vehicle is not the titled owner.  

Once a towing service has removed the vehicle, the customer may still reclaim the vehicle from the towing service or storage facility. To do so, the customer must provide proof of ownership (title, registration, or lease agreement), payment of any charges incurred for the removal and storage of the vehicle. However, if the consumer waits too long, the towing service or storage facility may have already taken ownership of the vehicle.
How Does It Fit With Other Abandoned Vehicle Statutes?It is important to note that the new abandoned towing statute is designed as a new tool to help dealers remove abandoned vehicles, as opposed to obtaining title to them. Dealers can continue to use the unclaimed motor vehicle statutes to obtain title to vehicles valued under $3500 or salvage title to vehicles that are inoperable and valued under $1500 (R.C. 4505.101 and R.C. 4505.103 respectively) as appropriate. Additionally, dealers who have established private tow-away zones at their dealership may continue to remove vehicles from their property under R.C. 4513.601. 
Some key distinctions from other abandoned vehicle statutes include:

  • Allows motor vehicle dealerships to remove the vehicles instead of just repair facilities.  
  • Dealers are not required to take ownership of the vehicle to remove the vehicle from its property.
  • There is no maximum value that would prohibit the dealership from removing the vehicle under the provision.
  • No signage is required to be posted near the entrance of the facility.

Conclusion and Next StepsUntil this provision becomes effective Sept. 30, 2021, dealers may continue using the existing statutory provisions to dispose of abandoned vehicles on their property. However, this provision provides a new tool for dealers to effectively manage their storage capacities by providing a low-investment option to remove motor vehicles in a timely manner.
As the implementation date comes closer, OADA will continue to release educational material to help dealers navigate the new law. OADA is hosting a webinar on Thursday, September 23, 2021. Be on the lookout for the registration information.
If you have any additional questions or concerns regarding abandoned vehicles, please contact OADA legal counsel, Sara Bruce at either (614) 923-2243 or sbruce@oada.com, or Matt Chacey at either (614) 923-2232 or mchacey@oada.com.