A Release of Liability form is one of the most crucial documents to complete when transferring a car to another person. It offers legal protection for both parties, updates DMV and county tax records, and can prevent the seller from accumulating delinquency fees. While not all states require this form, it's a good idea to send one in anyway.
Read on to learn what exactly a Release of Liability does, when it’s required by law, and why you should complete one, even if it’s not mandatory in your state.
What Is a DMV Release of Liability?
A Notice of Release of Liability (also called a Notice of Transfer) is a document used to update the DMV database when a person transfers ownership of a car to another individual. It’s the seller's or previous owner's responsibility to fill out and file this document with their local DMV in a "timely manner."
The amount of time transferors have to file this notice varies considerably from state to state. More lenient states allow up to 30 days from the date you surrender the vehicle to file the release, whereas others (like California) require notice within five days.
When Will I Need to File a DMV Release of Liability?
If you are selling or gifting your car to someone, you should file a Release of Liability form with the Department of Motor Vehicles in your state. If your state requires this form, there are no exemptions to the rule for private parties.
However, transfers between lenders do not require a Release of Liability. That means, if your car was originally financed with Bank X and you refinance with Bank Y, no form is necessary. Likewise, if you're paying off your car and a lienholder is being removed altogether, that also doesn't require an NRL, according to the DMV.
What Should I Do Before Filing a Release of Liability?
Before filing a Release of Liability, you should first ensure that your sticker is up-to-date if your state requires annual vehicle inspections. You can find a detailed list of inspection procedures and the states that conduct them here. Before the vehicle sale, you should also:
- Check with your DMV to see if you need liability insurance at the time of sale. In many states, selling a car without a policy may result in you having to pay hefty penalties for lapsed insurance.
- Draw up the bill of sale. You can find free printable templates for this here; just select your state from the list and you’ll be directed to the file.
- You may need to fill out a separate Odometer Disclosure form stating the odometer reading at the time of sale. Like all official forms, you'll need to write down the vehicle identification number (VIN) to identify your car.
- You may also need to fill out a separator Damage Disclosure form, according to your state’s regulations. New York State requires private sellers to complete both an Odometer and Damage Disclosure form before vehicle transfer. Failure to provide this document can result in fines and/or imprisonment, according to the NYDMV website.
- Complete a Notice of Title Transfer or Release of Liability form. This form goes by slightly different names in each state. The Texas Department of Motor Vehicles, for instance, has a Vehicle Transfer Notification form that release your liability when you transfer your car to any party (including a dealer).
With these steps completed, you can confidently hand the vehicle title over to its new owner. Depending on your state, you may also need to get the vehicle license plates and turn them into the DMV. Alternatively, you might be able to keep and transfer your plates to your next car.
What Information Is Required for a Release of Liability?
Release of Liability form requirements differ from state to state. Generally, you’ll be required to input the following information:
- The previous owner's name AND the new owner’s name. Both should be entered according to what their driver's licenses state (i.e., "Nathaniel" instead of "Nathan").
- Contact information for the previous owner AND new owner. This would include an address and phone number, at minimum.
- License plate number currently assigned to the vehicle. In most states, you'll want to remove and keep the license plates.
- Vehicle description. In addition to make, model, and year, the form may ask for body style and color.
- Vehicle Identification Number (VIN). This can typically be found on the dashboard through the windshield, in the inner door jamb, and elsewhere on the vehicle.
- Exact mileage at the time of sale. Remember, you may also need to fill out a separate form confirming the odometer reading. It is illegal in every state to lie about a car's mileage.
- Date of title transfer, which is the date you both sign these forms and the new owner leaves with the vehicle.
If you have any questions regarding the sale or your responsibilities, you should get in touch with your local DMV far in advance. Here's a tip: If you can't get a hold of your own county's DMV, you can contact a smaller county's DMV in your state. Since DMVs are managed at the state level, they all must follow the same rules and regulations so they'll all be able to answer your questions.
What’s the Difference Between a Title Transfer Notice and a Release of Liability?
If you look at a Title Transfer Notice and Release of Liability side-by-side, you’ll see they require the same information, so what’s the difference? Well, in some states, there isn’t one. Both Texas and California DMVs have combined these two forms into a single application, often called the "Notice of Transfer and Release of Liability."
Some states only require sellers to submit a Title Transfer Notice. These states typically reserve Release of Liability notices for former owners who are still receiving tax documents or tickets associated with the car after they’ve filed a title transfer. Click here to check out AAA’s list of Title Transfer requirements for each state.
Do You Need a Release of Liability to Sell Your Car?
Most states require sellers to file a notice soon after the transaction takes place. Even if your DMV doesn’t have a Release of Liability requirement, your county may still use them for tax purposes.
Legal experts recommend all former owners submit a Release of Liability as a precautionary measure when selling or gifting a car to another individual. The filing fee for a Release of Liability is less than $5 in most places, so you’re not losing much if you don’t need it after all. Think of it as paying for peace of mind.
What Happens If You Don’t Get a DMV Release of Liability?
Here are answers to some common questions about what could happen if you fail to file a Release of Liability in your state.
You could face delinquent notice fines
In many states, private sellers are required by law to submit a Release of Liability within a certain number of days after the car is sold. Typically, sellers have 30 days to file with their state DMV before they face fines or other repercussions.
You could be unjustly charged for violations
Legality aside, failure to submit a Release of Liability document on time can result in the seller being held accountable for traffic violations, parking tickets, and unpaid toll fees accumulated by the new owner. When you file a Release of Liability, the DMV updates their records with the new owner’s info and releases you from responsibility if an incident arises.
California’s DMV website states that, when filled out correctly, “liability for parking and/or traffic violations and civil litigation, resulting from operation after the date of sale, becomes the responsibility of the subsequent purchaser.”
You may still receive tax and registration renewal notices for the car
The article goes on to say, “When the NRL information is received by DMV, and the vehicle record is marked, no further vehicle registration renewal notices will be mailed to you for the reported vehicle.”
In many states, this form is also used to update local tax databases. Failure to submit this form to the county tax collector could cause you to be taxed for personal property that you no longer own.
According to the California DMV website, registration renewal notices are automatically mailed about two months before the registration is set to expire. The site states “renewal notices are generated within days of the sale of your vehicle and the documents may cross in the mail.” If you receive one of these within 60 days after you sell the vehicle, you should check with the DMV just to be on the safe side.
How Can You Get a DMV Release of Liability Form?
There are a few different ways you can acquire this form. If you’re patient enough to withstand your local DMV’s wait time, you can obtain and file your notice there. Alternatively, you can print off an application from your state’s DMV website and drop it off once you’ve completed it.
Most DMV websites allow users to submit this form directly through the site, which for many is the most convenient option. You can submit your notice by mail, though it is the riskiest option. When using the postal service, there’s always the chance your document could get lost during processing or arrive past the deadline, which could result in costly fines.
Legal experts recommend following up with your local office 2-3 days after you submit your notice online or by mail. This’ll ensure the information was received and entered into the system, which may prevent you from being fined.
What Are the Fees Associated with Filing a Release of Liability?
The fees for filing range from $3 to $5 and are due at the time of submission. DMV offices accept payment in the form of cash, check, money orders, debit cards, and major credit cards. Those who file online will only be able to use credit or debit cards. If you choose to submit your form by mail, you’ll need to include a check or money order.
What Happens Next?
If you’ve gotten to the point where you need a Release of Liability, the hard part of the sales process is over. You’ve already found a buyer, drafted a bill of sale, submitted a title transfer application, and handed over the keys and title. Now you must sever the remaining ties to the car.
- Cancel the insurance policy on the vehicle.
- Take copies of the bill of sale, title transfer, and release of liability notice to your county tax collector so they can update their system.
- Check with the DMV within 30 days after the vehicle transfer to make sure the new owner registered the car in their name.
From there, you'll just need to focus on getting into a new ride.
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