Put the Brakes On: Vehicle Repossession Laws for Lienholders in Florida

If you’re a lender or lienholder and you’re interested in learning more about vehicle repossession laws in Florida, this is the blog for you. Vehicle repossession is a huge issue for car lenders and there is a lot to consider in terms of the legal ramifications and the pros and cons of repossessing a vehicle.

What are Vehicle Repossession Laws for Lienholders in Florida?

So what exactly are the laws when it comes to vehicle repossession for lienholders in Florida?

According to Florida statutes, “in case of repossession of a motor vehicle…pursuant to the terms of a security agreement or similar instrument, an affidavit by the party to whom possession has passed stating that the vehicle…was repossessed upon default in the terms of the security agreement or other instrument shall be considered satisfactory proof of ownership and right of possession.

“At least five days prior to selling the repossessed vehicle, any subsequent lienholder named in the last issued certificate of title shall be sent notice of the repossession by certified mail, on a form prescribed by the department. If such notice is given and no written protest to the department is presented by a subsequent lienholder within 15 days from the date on which the notice was mailed, the certificate of title or the certificate of repossession shall be issued showing no liens.

“If the former owner or any subsequent lienholder files a written protest under oath within such 15-day period, the department shall not issue the certificate of title or certificate of repossession for 10 days thereafter. If within the 10-day period no injunction or other order of a court of competent jurisdiction has been served on the department commanding it not to deliver the certificate of title or certificate of repossession, the department shall deliver the certificate of title or repossession to the applicant or as may otherwise be directed in the application showing no other liens than those shown in the application.”

When Can You Seize a Vehicle?

One of the things you will want to know about vehicle repossession laws for lienholders in Florida is when you are legally allowed to seize a vehicle. You as a creditor typically have the legal authority to seize the debtor’s car as soon as they default on their loan. Once your debtor is in default, you can repossess the car at any time without prior notice and you can even go onto the debtor’s property to seize the car. That being said, you are not allowed to seize a vehicle by using physical violence or threats of force. If you do this, you will be required to pay a penalty or compensate your debtor for any harm done to them or their property.

When Can You Resell the Vehicle?

Once you have repossessed the car, you might decide to resell the vehicle in either a private or public sale in order to make up for your debtor’s missed payments. However, you must notify your debtor what is happening to their car and your debtor can have a say in what happens to the vehicle. For example, if you decide you want to keep the car as compensation for the debt, your debtor has the right to say that the car must be sold instead. Your debtor has more of a say in the matter if the car is worth more than the amount they owed on the loan.

If you decide to sell the car, you must notify the debtor of the sell dates. For example, if you are selling the car at a public auction, you must notify the debtor of the auction date in advance. And if you are selling the vehicle through an auto dealer, you must notify the creditor of the date after which it will be sold.

Furthermore, any resale of the vehicle must be commercially reasonable. A resale price below fair market value is typically considered unreasonable. If you resell the car below market value, your debtor might have a claim against you for damages. Your debtor is also allowed to buy back the vehicle by paying the full amount owed, in addition to any expenses you incurred through vehicle repossession.

Deficiency Judgments for Outstanding Debts

Even after selling the vehicle, you are allowed to sue the debtor to recoup any debts that remain after the car is sold. You can seek these deficiency judgments, as well as attorney’s fees and court costs, within 30 days. Your debtor will receive a notice to attend a court hearing, where they can respond.

Keep in mind that if you have sold the car below fair market value, as the law requires, the debtor has a reasonable defense and will likely not need to pay you any amount. Other defenses that might crop up include the debtor proving that you committed breach of peace offenses in repossessing the car or they can’t find valuable items that were in the vehicle like luggage racks and stereo systems.

So there you go! Now you have a lot of information about vehicle repossession laws for lienholders in Florida. You know what is legally allowed, as well as some of the benefits and downsides of vehicle repossession.

If you want to learn more information about vehicle repossession laws for lienholders in Florida, feel free to check out Van Horn Law Group’s website here.