It is all too common for sellers of used motor vehicles to simply sign the title over to the buyer, and assume the buyer will register it with the Secretary of State. However, if the buyer does not register the title, the seller can face some real legal problems because the seller is still the owner of title.
I have had two cases involving such problems. In the older case, the vehicle was involved in an auto accident after sale, and the seller was sued as owner of title. The owner of title can be financially responsible. (MCL 257.37; MCL 257.401)
In my recent case, the vehicle was abandoned and towed about 11 months after sale. Statute provides that the owner is liable for at least a fine. (MCL 257.252a) Not only was the client still the owner of title, but the client had no written documentation of the sale. Indeed the client could not recall the buyer’s name, and never got the buyer’s address.
Under MCL 257.240, for the seller to avoid these problems, the seller must go with the buyer to the SOS office to see that title is transferred, or the seller must have sufficient proof of sale. The proof should consist of a document signed by the buyer which includes the following information: name, address, and driver’s license of the buyer, description of the motor vehicle, the purchase price, and date of sale.