Do You Need to Keep Physical Titles on Premises?
Dealers frequently ask TIADA through the Compliance Consultation Service whether or not they are required to keep a physical title on their premises. In this updated blog post, we answer this common question and examine a recently adopted rule from the Texas Department of Motor Vehicles concerning dealers who utilize webDEALER.
Dealer Question: Am I required to keep the physical title certificate for every car on my lot on my premises?
Answer: No. Original hard copy titles are not required to be kept at the licensed dealership location but must be made available to the Texas Department of Motor Vehicles upon request. The expectation is that automobile dealers will maintain their original motor vehicle titles in a secure location, whether that is on the dealership premises or at a secure location off-site. Some of our larger members keep title certificates at a central office that may be in another state. In those situations, the dealership should have procedures in place such that the original certificate of title to a given vehicle can be shipped overnight to the dealership's Texas location.
After a sale, a dealer need not maintain a physical copy of a vehicle title if the title was submitted through the electronic title system. If the title was not submitted through the electronic title system, then the dealer may maintain an electronic record of the title so long as the dealer can print a copy of the record upon request.
The TxDMV must be able to verify that dealers have the legal right to sell the vehicles within their inventory. Past rules required dealers to keep the physical title certificate at the licensed location or within the same county as the licensed location. TIADA actively worked with TxDMV in 2016 to protect our members' ability to make their own business decisions with regard to the proper safekeeping of these extremely valuable ownership documents. For reference, this rule is codified at TAC 43 Rule §215.144(k).
UPDATE: In March of 2018, TxDMV released several adopted rules. Among them was Rule 43 TAC Section 215.144(l) which adds an exception to the general requirement in Section 215.144(k) that a license holder may maintain records in electronic format. If a license holder uses webDEALER, then that dealer is required to maintain a physical copy of documents for four calendar years from the date the documents were submitted to webDEALER. The amendment clarifies that the original hard copy title need not be kept at the licensed location, but must be made available to DMV on request.
You can find the rules in the Texas Administrative Code at http://texreg.sos.state.tx.us/public/readtac$ext.viewtac.