FACT SHEET – Surrender Stop
In 2009, Florida passed Statute Section 320.1316 after a recommendation from the Automobile Lenders Industry Task Force to investigate problems within the automotive industry. The purpose of the statute was to help lienholders recover vehicles without court intervention.
Under this Statue, when a lienholder notified the Department of Motor Vehicles (DMV) that a registered owner refused to comply with a demand for surrender, the driver's name was placed on a list called "Surrender Stop.” Drivers on this list were not allowed to be issued license plates or vehicle registrations until the vehicle is recovered or the lien holder removes the person's name from the list.
A registered owner filed a lawsuit against the DMV. The lawsuit claimed that the current version of Section 320.1316 does not contain a procedure for the registered owner to dispute a demand for surrender.
Technically, Florida Statute Section 320.02(17) states that if a registration applicant's name appears on this list, DMV may withhold the renewal, registration or replacement registration of any motor vehicle owned by the applicant. Since the statue states "may withhold” instead of "must withhold,” DMV's position is that they are not required to enforce the registration stops now.
FIADA recognizes that DMV does not wish to be the messenger between lienholders and registered owners, but lien holders need the protections afforded to them by law. SB 1044 sponsored by Senator Kelli Stargel and HB 925 sponsored by Representative Patrick Rooney corrects this issue by amending Section 320.1316 so that:
1. The form submitted to DMV by a lien holder is verified as true and accurate under oath by the lienholder or an authorized representative; 2. Registered owners may challenge the registration stop in the circuit court and recover their reasonable attorney's fees and costs; and 3. Section 320.02(17) is amended to replace the word "may” to "shall” thus requiring DMV to stop issuing license plates, revalidation stickers, or replacement license plates for anyone whose name appears on the list until their name is removed or ordered by a court.
FIADA believes that these changes will eliminate any burden on DMV in resolving the handful of disputes they receive, and it will keep the protections that were granted in 2009. This legislation also will limit the number of court actions filed by lienholders to recover hidden vehicles. SB 1044 and HB 925 are very similar to how a customer can challenge a motor vehicle repair shop's lien or a towing and storage lien by filing a court action and posting a bond. It protects consumers and lienholders. It does not afford lienholders any new benefits, while greatly increasing the benefit to the consumer in the form of a right to cure and allowing attorney fees for the prevailing party.