2021 Georgia Code
Title 40 - Motor Vehicles and Traffic
Chapter 3 - Certificates of Title, Security Interests, and Liens
Article 3 - Security Interests in and Liens on Motor Vehicles
§ 40-3-53. Perfection and Enforcement of Liens Generally

1. If the holder of any lien as defined in paragraph (7) of Code Section 40-3-2, except the holder of a mechanic's lien, perfection of which is prescribed in Code Section 40-3-54, desires to perfect such lien against a vehicle, the lienholder shall, on the form prescribed by the commissioner, execute a title application and a notice of lien stating the type of lien and the specific vehicle against which the lien is claimed and shall forward such notice and title application, together with a fee as provided by Code Section 40-3-38, either personally or by certified mail or statutory overnight delivery, return receipt requested, to the person who has custody of the current certificate of title at the address shown on such certificate of title. If someone other than the owner is holding the certificate of title, a copy of the notice shall also be forwarded to the owner. The lien claimant shall retain the certified mail or statutory overnight delivery receipt as proof of compliance with this Code section.
2. After receipt of the notice of lien, as specified in this Code section, neither the owner nor any other person shall take any action affecting the title other than as provided in this Code section. After receipt of the notice of lien, the person holding the certificate of title shall hold the notice of lien and attachments and the title for ten days. If, during the ten-day period following receipt of the notice, the claimed lien is satisfied, the lien claimant shall, on the form prescribed by the commissioner, notify the owner and the person holding the certificate of title of such satisfaction. The notice of satisfaction shall serve as a release and withdrawal of the pending notice of lien. If the owner or person holding the certificate of title chooses to contest the claimed lien, such owner or person holding the certificate of title shall so indicate on the notice of lien form and shall notify the other interested parties. If the notice contesting the lien is given, or if ten days have elapsed without the lien being satisfied, the person holding the certificate of title shall forward the certificate of title together with the notice of lien and attachments thereto to the commissioner or the commissioner's duly authorized county tag agent in order that the commissioner or authorized county tag agent may issue a new certificate of title and reflect on the new certificate of title the lien on the vehicle. The owner or the person who has custody of the current certificate of title shall comply with the instructions contained in the notice, and in the event such owner or person having custody of the current title cannot do so such owner or person having custody of the current title shall notify the lien claimant. The commissioner or authorized county tag agent, upon receipt of a properly executed title application, notice, fee, and the current certificate of title, shall enter the lien on the commissioner's or authorized county tag agent's records and shall issue a new certificate of title reflecting the lien and shall then deliver the certificate of title as provided for in this chapter. The lien shall be perfected at the time the lien notice, application for title, fee, and current certificate of title are received by the commissioner or authorized county tag agent.
3. In the event that the person who has custody of the current certificate of title fails, refuses, or neglects to forward the title application, notice, fee, and current certificate of title to the commissioner or the commissioner's duly authorized county tag agent as required in this Code section, the lien claimant may, if such lien claimant's lien has not been satisfied, on a form prescribed by the commissioner, make direct application to the commissioner or authorized county tag agent. Such direct application to the commissioner or authorized county tag agent shall have attached to it the return registered or certified mail or statutory overnight delivery receipt showing the previous mailing of the title application, fee, and notice to the person who has custody of the current certificate of title. Upon receipt of such a direct application, the commissioner or authorized county tag agent shall order the person who has custody of the current certificate of title to forward the certificate of title to the commissioner or authorized county tag agent for the purpose of having the lien entered and a new certificate of title reflecting the lien issued. If, after a direct application to the commissioner or authorized county tag agent and after the order of the commissioner or authorized county tag agent, the person who has custody of the current certificate of title continues to fail, refuse, or neglect to forward the certificate of title as provided in this Code section, the commissioner or authorized county tag agent may cancel the current certificate of title and issue a new certificate of title reflecting all security interests and liens, and this new certificate of title shall be delivered as provided for in this chapter. In the event a direct application is made, the lien shall be perfected as of the date the outstanding certificate of title is canceled.
4. No security interest holder or lienholder having custody of the certificate of title shall have the validity of such security interest holder's or lienholder's security interest or lien affected by surrendering the certificate of title as provided by this Code section. The first security interest holder or lienholder shall have the responsibility to advise a prospective transferee or security interest holder, upon inquiry, that a notice of subsequent lien has been received. Upon the issuing of a new certificate of title, the commissioner or the commissioner's duly authorized county tag agent shall cancel the old certificate of title.
5. A lien perfected under this Code section shall be a lien only against the specific vehicle identified in the application for a new certificate.
6. A lien on a vehicle for which a certificate of title is required shall be perfected and shall be valid against subsequent transferees and holders of security interests and liens only by compliance with this Code section. The procedure contained in this chapter shall be the exclusive method for the perfection of liens on vehicles, and no lien shall be effective as to a vehicle unless so perfected.

(Ga. L. 1961, p. 68, § 21; Ga. L. 1962, p. 79, § 11; Ga. L. 1969, p. 92, § 4; Ga. L. 1978, p. 1081, § 9; Ga. L. 1985, p. 149, § 40; Ga. L. 1990, p. 2048, § 3; Ga. L. 1997, p. 739, § 21; Ga. L. 1998, p. 1179, § 38; Ga. L. 2000, p. 1589, § 3.)

- Liens generally, § 44-14-320 et seq.

- Pursuant to Code Section 28-9-5, in 1989, in subsection (b), a comma was inserted following "notice of lien" in the first and second sentences and following "fee" in the next-to-last sentence.

- Ga. L. 2000, p. 1589, § 16, not codified by the General Assembly, provides that the amendment to this Code section is applicable with respect to notices delivered on or after July 1, 2000.

JUDICIAL DECISIONS

Actual notice of prior lien preserves priority.

- Although the holder of a security interest may fail to comply with the provisions relating to the perfection of a security interest, it is well settled that actual notice of the prior lien to one who subsequently purchases or acquires a security interest is sufficient to preserve the priority of the lien or of the title. Hopkins v. Kemp Motor Sales, Inc., 139 Ga. App. 471, 228 S.E.2d 607 (1976).

- When two lenders hold security agreements in the same property, and when, at the time of the second loan, the first lender's interest in the property was not perfected and the second lender had the opportunity to present the original certificate of title with a proper application to the commissioner to protect its status and obtain a first lien under Ga. L. 1978, p. 108, § 9 (see now O.C.G.A. § 40-3-53) but did not, and thereafter the first lender perfected that lender's security interest, the first lender's interest is superior to that of the second lender. Gwinnett Com. Bank v. Citizens & S. Bank, 152 Ga. App. 137, 262 S.E.2d 453 (1979).

- Evidence found insufficient to direct verdict for lienholder, or to grant motion for new trial. GMAC v. Miller, 138 Ga. App. 140, 225 S.E.2d 728 (1976).

- Claimant who has failed to record claimant's lien or otherwise make it known that one claims an interest in the property may have hard sledding when it comes to convincing the trier of fact, but the claimant is not as a matter of law foreclosed from pursuing the claim. State v. Hallman, 149 Ga. App. 221, 253 S.E.2d 859 (1979).

- When a creditor fails to follow O.C.G.A. § 40-3-53 in perfecting a lien on a motor vehicle, relying instead on the filing of a judgment on the general execution docket and resulting judgment lien, the creditor's judgment lien does not attach to the subject vehicle and the vehicle is not encumbered by the lien. The reasoning of the court in a prior decision was not properly construed or extended as precedent for the implication that a judgment lien properly perfected under state law against a motor vehicle was thereby immune from avoidance under 11 U.S.C. § 522(f) if the conditions of that provision were shown to be satisfied; in fact, once the lien was shown to have attached and been perfected, the analysis under § 522(f) concerned precisely the avoidance of such an otherwise valid and perfected lien to the extent it impaired an exemption to which a debtor was entitled. First Fin. Servs. v. Tallant (In re Tallant), Bankr. (Bankr. N.D. Ga. Apr. 4, 2012).

- Trustee in bankruptcy was not required to demonstrate the trustee's ability to comply with the statute in order to gain the trustee's status as a hypothetical perfected lien holder under § 544 of the Bankruptcy Code; the trustee gained the trustee's status as a perfected lien creditor as of the date of filing regardless of what other requirements state law provided for perfecting judgment liens. Kelley v. Citizens Bank (In re Russell), 227 Bankr. 196 (Bankr. M.D. Ga. 1998).

- IRS held perfected tax lien in the debtor's vehicle that took priority over the respondent's lien because the IRS's lien was perfected at the time of filing the notice of tax lien notwithstanding the IRS's failure to comply with the Georgia Motor Vehicle Certificate of Title Act, O.C.G.A. § 40-3-1 et seq. Craft-Latimer v. Auto. Acceptance Corp. (In re Craft-Latimer), Bankr. (Bankr. N.D. Ga. Aug. 10, 2015).

Cited in Green v. King Edward Employees' Fed. Credit Union, 373 F.2d 613 (5th Cir. 1967); Capital Auto. Co. v. Continental Credit Corp., 117 Ga. App. 451, 160 S.E.2d 836 (1968); GMAC v. Whisnant, 387 F.2d 774 (5th Cir. 1968); First Nat'l Bank & Trust Co. v. McElmurray, 120 Ga. App. 134, 169 S.E.2d 720 (1969); Frank Jackson Motors, Inc. v. Mortgage Enters., Inc., 124 Ga. App. 798, 186 S.E.2d 464 (1971); In re Thompson, 349 F. Supp. 990 (M.D. Ga. 1972); Cooper v. Citizens Bank, 129 Ga. App. 261, 199 S.E.2d 369 (1973); Szczepanski v. GMAC, 558 F.2d 732 (5th Cir. 1977); McClintock v. GMAC, 240 Ga. 606, 241 S.E.2d 831 (1978); Canal Ins. Co. v. P & J Truck Lines, 145 Ga. App. 545, 244 S.E.2d 81 (1978); McConnell v. Barrett, 154 Ga. App. 767, 270 S.E.2d 13 (1980); Turner v. Jackson, 157 Ga. App. 31, 276 S.E.2d 92 (1981); Williamson v. Lucas, 78 Bankr. 372 (Bankr. M.D. Ga. 1987).

RESEARCH REFERENCES

Am. Jur. 2d.

- 51 Am. Jur. 2d, Liens, § 22 et seq.