| Perfection
|| Possession and Sale || New Title
and Plates || Other Issues
|| Kelley Blue Book | |
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Tennesseee
Code
| LAWDOG™ Tennessee Repossession |
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| Title May Be Held By
Lienholder Upon receipt of application for a certificate of title,
and after determining by examination of its records that the applicant is entitled to a
certificate of title, the Tennesee Motor Vehicle division issues the same. The certificate
of title is delivered to owner in event no lien or encumbrance appears thereon. Otherwise,
the certificate of title is delivered to person holding the first lien upon vehicle as
shown in certificate, and is to be retained by holder of first lien until the lien is
discharged. See Tennessee Code Section 55-3-114 |
| Procedure For Lien Without
Sale When any new lien, other than a lien dependent solely upon
possession, or a properly established lien of the state for taxes, is placed on a motor
vehicle, in a transaction not involving change of ownership, the owner must deliver the
certificate of title, if in owner's possession, to lienor, who forwards the same, together
with fee for noting lien thereon, and proof of lien as may be required by division. See
Tennessee Code Section 55-3-123 |
| When Certificate is Held By
Other Security Holder When the division is satisfied of lienor's right to
have lien noted on certificate, it notes the lien and returns certificate of title to
lienor. In event the certificate is in possession of some prior lienor, new lienor
forwards to the division only the required fee for noting lien, and proof of lien as may
be required, directly to division.When the division is satisfied of right to have lien
noted on certificate, the division obtains the certificate of title from possessing
lienor, for sole purpose of noting new lien, returns certificate to lienor from whom
obtained, and notifies new lienor that lien has been noted upon the title. See Tennessee
Code Section 55-3-123 |
| Assignment and Notation of
Lien Any person holding a lien upon vehicle, other than a lien dependent
solely upon possession, may assign title or interest in and to such motor vehicle to a
person other than the owner, without the consent and without affecting the interest of
such owner, of the registration of such vehicle, but, in such event, must give to the
owner a written notice of such assignment, deliver to the assignee an assignment of the
lien, and follow other rules in Section 55-3-124. The assignee of any lien shall be
entitled to the same priority among the outstanding lienors and have all other property
rights as had formerly been held by assignor. See Tennessee Code Section 55-3-124 |
| Perfection of Lien By Filing
and Notation No conditional sales contract, chattel mortgage, or other
lien or encumbrance or title retention instrument upon a registered vehicle, other than a
lien dependent upon possession, or a lien of the state for taxes properly established,
shall be valid against creditors of an owner, or subsequent purchasers or encumbrancers,
until the requirements of Sections 55-3-125 and 126 have been complied with, unless such
creditor, purchaser, or encumbrancer has actual notice of prior lien. See Tennessee Code
Section 55-3-125 |
| Procedure For Perfection
A lien or security interest in a vehicle of type for which a certificate is required is
perfected and shall be valid against subsequent creditors of owner, subsequent
transferees, and holders of security interest and liens on vehicle by compliance with this
chapter. A security interest or lien is perfected by delivery to the division or
county clerk of existing certificate of title, if any, title extension form, or statement
of origin, application for a certificate of title containing name and address of holder of
a security interest or lien, with vehicle description and required fee. See Tennessee Code
Section 55-3-126
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| When Perfected
Security interest is perfected as of time of creation if delivery is completed
within twenty (20) days after creation. Otherwise, security interest is perfected as of
date of delivery to county clerk or division of motor vehicles. A second or subsequent
security interest in a vehicle of type for which a certificate of title is required, is
not considered perfected unless and until such lien or security interest is physically
noted on certificate of title for vehicle. In case of second or subsequent lien or
security interest, there is no constructive notice of such lien or security interest
unless such is physically noted on certificate of title. See Tennessee Code Section 55-3-126 |
| Constructive Notice
When the security interest is perfected as provided for in this section, it shall
constitute notice of all liens and encumbrances against vehicle described to creditors of
owner, subsequent purchasers and encumbrances, except liens dependent upon possession.
Constructive notice dates from time of first delivery of request for notation of lien or
encumbrance upon certificate of title by either the division or county clerk acting as
agent for division, as shown by endorsements of date of delivery on such document. See
Tennessee Code Section 55-3-126 |
| Exclusive Method
The method provided in this section and Section 55-3-125 of obtaining a lien upon a
motor vehicle, mobile home, house trailer or other mobile structure, whether or not taxed
as real property, subject to the provisions of chapters 1-6 of this title relative to the
issuance of certificates of title, is exclusive except for liens depending upon possession
and the lien of the state for taxes established pursuant to title 67, chapter 1, part 14.
The law is not construed to require the deposit, filing or other record whatsoever of a
chattel mortgage, deed of trust conveyance intended to operate as a mortgage, trust
receipt, or other similar instrument. It is the intent that any mortgage, trust receipt or
other similar instrument of debt shall be perfected by delivery and then noted upon the
certificate of title only, and shall not be required to be made a public record elsewhere.
See Tennessee Code Section 55-3-126 |
| Filing Within 20 Days May
Preserve Perfection Date The constructive notice shall be effective from
the date of the execution of the instrument creating and evidencing the lien or
encumbrance if filed as authorized herein within twenty (20) days after date of execution.
If the instrument is filed more than twenty (20) days after execution, the constructive
notice dates from time of filing of the instrument and the payment of the fee. See
Tennessee Code Section 55-3-126 |
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| Possession Following Default
Unless otherwise agreed, secured party has, on default, the right to take possession of
the collateral. In taking possession, secured party may proceed without judicial process
only if this can be done without breach of the peace. If not, a legal action may proceed.
See Tennessee Code Section 47-9-503 |
| Right to Redeem
At any time before secured party has disposed of collateral or entered into contract for
its disposition by sale under Section 47-9-504, or before discharge under Section
47-9-505, debtor or any other secured party may, unless otherwise agreed in writing after
default, redeem the collateral by tendering fulfillment of all obligations secured by
collateral, expenses reasonably incurred by secured party in retaking, holding and
preparing collateral for sale, arranging for sale, and to extent provided in agreement and
not prohibited by law, reasonable attorneys' fees and legal expenses. See Tennessee Code
Section 47-9-506 |
| Compulsory Sale
If debtor has paid sixty percent (60%) of the cash price in case of a purchase
money security interest in consumer goods or sixty percent (60%) of the loan in case of
another security interest in consumer goods, and has not signed, after default, a
statement renouncing or modifying rights under this part, secured party who has taken
possession of collateral must dispose of it by sale under Section 47-9-504. If secured
party fails to do so within ninety (90) days after possession, debtor may recover certain
damages on secured party's liability. See Tennessee Code Section 47-9-505 |
| Acceptance As Satisfaction
In any other case not involving 60% consumer goods secured party in possession may,
after default, propose to retain the collateral in satisfaction of obligation. Written
notice of proposal must be sent to debtor, if debtor has not signed, after default, a
statement renouncing or modifying rights. In the case of consumer goods no other notice
need be given. In other cases, notice must be sent to any other secured party from whom
secured party has received, before sending notice to debtor, or before renunciation of
rights, written notice of claim of interest in the collateral. If secured party receives
objection in writing from person entitled to receive notice, within twenty-one (21) days
after notice sent, secured party must dispose of collateral by sale under Section
47-9-504. If no such written objection is received, secured party may retain collateral in
satisfaction of the obligation. See Tennessee Code Section 47-9-505 |
| Sale and Application of
Proceeds A secured party after default may sell, lease or otherwise
dispose of any or all of the collateral in its then condition or following any
commercially reasonable preparation or processing. The proceeds of sale are applied in the
order following to reasonable expenses of retaking, holding, preparing for sale or lease,
selling, leasing and, to extent provided for in agreement and not prohibited by law,
reasonable attorneys' fees incurred by secured party. Proceeds would next apply to
satisfaction of debt secured by security interest under which sale is made. See Tennessee
Code Section 47-9-504 |
| Subordinate Liens
If proceeds remain, they would next apply to satisfaction of debt secured by any
subordinate security interest in the collateral, if written notice of demand is received
before distribution of proceeds is completed. If requested by secured party, holder of a
subordinate security interest must seasonably furnish reasonable proof of interest, and
unless he does so, secured party need not comply with demand. See Tennessee Code Section 47-9-504 |
| Accounting and Deficiency
If the security interest secures debt, secured party must account to debtor for any
surplus, and, unless otherwise agreed, the debtor is liable for any deficiency. See
Tennessee Code Section 47-9-504 |
| Public or Private Sale After
Notice Disposition of the collateral may be by public or private
proceedings and may be at any time and place and on any terms, but every aspect of sale
including method, manner, time, place and terms must be commercially reasonable. Unless
collateral is perishable, reasonable notice of time and place of any public sale, or time
after which any private sale is to be made, must be sent by secured party to debtor, if
debtor has not signed, after default, a statement renouncing or modifying right to notice
of sale. See Tennessee Code Section 47-9-504 |
| Notice To Subordinate Liens
In non-consumer cases notice must be sent to any other secured party from whom secured
party has received, before sending notice to debtor or before renunciation of rights,
written notice of claim of interest in the collateral. The secured party may buy at any
public sale and if the collateral is of a type customarily sold in a recognized market. If
collateral is of type which is the subject of widely distributed standard price quotations
he may buy at private sale. See Tennessee Code Section 47-9-504 |
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| Transfer by Operation of Law Whenever the
title or interest of an owner in or to a registered vehicle passes to another other than
by voluntary transfer, the registration shall expire and the vehicle may not be operated
upon the highways unless and until the person entitled to possession of such vehicle shall
apply for and obtain the registration thereof, except that such vehicle may be operated by
person entitled to possession or legal representative, upon the highways from the
point the vehicle comes into the person's possession, to such person's place of business
or to some garage or warehouse, upon displaying upon vehicle the registration plate or
plates issued to former owner, or, in the event title has become vested in person holding
a lien or encumbrance upon vehicle, such person may apply to the division for and obtain
special plates or temporary plates as may be issued under § 55-4-221(c)(4), and may
operate any such repossessed vehicle under such special plates or temporary plates only
for purposes of transporting the same to a garage or warehouse or for purposes of
demonstrating or selling the same. 55-3-121 |
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