Removing Lien In A Car Title In Maryland

A lien will be placed on a vehicle title to protect a creditor's interest. In most cases, the lienholder is the bank that provided the financing for the vehicle's purchase. Repair shops and storage yards can also place liens on vehicle titles for nonpayment of invoiced services. The process for releasing loan-related liens in Maryland is similar to the rest of the country, but the state has its requirements for removing mechanic's liens.

Overview Of Car Lien

When you finance the purchase of your vehicle, a car title lien is standard. A car title lien occurs when a creditor has a lien on your car's title until the loan is paid in full. Essentially, you and your finance company own your car. Only when the loan is paid off does the vehicle become yours fully. It's always a relief to have a car loan paid off. Finally, the car is yours free and clear, and your credit score has most likely improved. Getting the title transferred to your name is the only thing stopping you from going further. Most financial institutions are prompt in releasing the lien and submitting the required Maryland Notice of Security Interest Filing (SIF) or at the very least a statement on letterhead provided by the lienholder stating that the debt has been repaid. In an ideal world, this would happen automatically every time, but there are times when the consumer is solely responsible for getting it done. A lien release letter from your creditor is required to remove a car title lien in Maryland. It must meet certain criteria to be considered valid. You can apply for a clear title from the Maryland Department of Transportation Motor Vehicle Administration once you have a valid lien release and your certificate of title.

Notice Of Transfer And Release Of Liability

The key documents for a successful vehicle sale are a notice of transfer and a release of liability. You must transfer ownership from yourself to the buyer when you sell your car. The notice of transfer handles that. The liability release states that because the car no longer belongs to you, you cannot be held liable for anything that happens to it. The buyer could drive down the street after purchasing the car from you and get into an accident, and the buyer would be liable for the damages to the car because you released all liability for the vehicle to them. Following the sale of your vehicle, you must submit your notice of transfer and release of liability to your local MVA office. Only then is the MVA satisfied that the sale is complete. If you are selling your car as a private party, Maryland law requires you to have these documents notarized at the time of sale.

Transferring Vehicle Title

When you sell your vehicle to someone else, you must transfer the title to them. Here's what you'll need to transfer your vehicle title to Maryland.
  • Prepare your title. The seller's name and signature must appear on the title. The purchaser's name, as well as their correct address, are required.
  • Fill out an MVA bill of sale form.
  • You will need an odometer statement if the vehicle's mileage does not appear on the title or cannot be recorded for some reason.
  • If you haven't had a chance to apply for a new title yet, make sure you have a completed lien release form from your finance company or creditor.
  • A certificate of safety inspection dated no later than 90 days before the sale. Some Maryland counties will also require an emissions certificate.
  • The buyer must show proof of a current Maryland auto insurance policy.
  • Form of liability release. If this is a private sale without the involvement of a car dealership, the release of liability must be notarized.
  • To save time and ensure that everything is done correctly, it is best if both the buyer and seller present this information to the MVA together.

Process Of Removing Car Lienholder

To remove a lienholder from a vehicle title in Maryland, you must do the following:
  • Pay off your debt.
  • Request a liability release from the finance company or individual creditor.
  • Wait for the liability release to arrive in the mail.
  • Call the finance company again and ask for a release of liability.
  • Prepare a release of liability and send or deliver it to the finance company for signature.
  • Take the release of liability form and your title to the MVA when you finally have the release of liability completed with a signature from the finance company.
  • The lienholder will be removed from your title after MVA certifies that the lien release form is in order.
  • Please fill out the new title application and give it to the MVA representative.
  • Pay any fees that the MVA has requested.
  • A clear title in your name will be presented to you by the MVA representative.

Requesting For A Clear Title

You can apply in person at any of the MVA's full-service branch offices or by mail to the MVA's title file unit. You must submit the Maryland Notice of Security Interest Filing (SIF), the lien release letter, and your vehicle's current title. There is no need for a separate application form. Suppose you do not have your Maryland title. In that case, you can obtain a "clear" title by submitting a completed Application for Duplicate Title (VR-018) along with the lien release and required fee for the duplicate title.