Cite as: 47 CNCA § 1111.19

A. Except as otherwise provided in this section or in 47 CNCA § 1111.18, a transferee of a vehicle takes subject to:

1. a valid security interest in the vehicle indicated on the certificate of title; and

2. if the certificate of title contains a statement that the vehicle is or may be subject to security interests not shown on the certificate of title, a valid security interest not so indicated.

B. If, during the period a security interest in a vehicle is perfected by any method under the law of any jurisdiction, the CNTC creates a written certificate of title that does not indicate that the vehicle is subject to the security interest or contain a statement that it may be subject to security interests not indicated on the certificate, a buyer of the vehicle, other than a person in the business of selling or leasing vehicles of that kind, takes free of the security interest if the buyer:

1. in good faith gives value, receives possession of the vehicle, and obtains execution of the written certificate of title; and

2. does not have notice of the security interest in the vehicle.

C. A buyer in ordinary course of business or a lessee in ordinary course of business of a vehicle takes free of a security interest, including a security interest indicated on the certificate of title, created by the buyer's seller or the lessee's lessor, even if the security interest is perfected, the buyer or lessee knows of its existence, and the certificate was not executed to the buyer or lessee.

Historical Data

LA 43–04, eff. December 15, 2004.