Bill would require landlords to notify lienholders about abandoned vehicles; property managers warn of administrative burden

House Bill 3,371 would require landlords to notify lienholders about abandoned vehicles in the same way the law currently requires notification for abandoned manufactured homes, recreational vehicles, and floating homes.

Proponents including the GoWest Credit Union Association said the change resolves a recurring, costly problem: when a vehicle subject to a secured lien is abandoned on rental property and subsequently sold without the lienholder being notified, the lien can be extinguished by retitling that leaves the lender unsecured.

Hal Scoggins, outside counsel for GoWest Credit Union Association, told the committee that other entities with possessory liens — towing and storage companies, mechanics — must check DMV records and notify lienholders before a sale. “What credit unions have seen is situations where they've had a car that is sold out from under them that they easily could have gone and picked up, had they known about the problem,” Scoggins said. He described a simple DMV inquiry (there is a modest fee) that can identify lienholders and allow secured lenders to recover collateral.

Pam Levitt, representing GoWest, said the change arose from the association’s statutory review and that the association did not intend to impose serious administrative burdens on landlords.

Multifamily Northwest, the state’s largest rental-housing association, opposed the bill. Molly McGrew said property managers and owners typically do not maintain lienholder information as part of tenancy records, and that the abandoned-vehicle provisions in current statutes are geared toward vehicles that are homes. McGrew said the day-to-day practice is to record make, model and tag for parking assignments, and that checking title records for every abandoned vehicle could impose new administrative work, raise privacy concerns for tenants, and complicate operations for large property managers who store applicant records off-site.

Committee members asked how the lien is erased by a new sale; Scoggins explained it is a quirk of the titling statute and DMV practice: towing or storage companies must prove they notified lienholders before retitling, but landlords currently are not statutorily required to do that, so DMV will retitle after a landlord-directed sale without requiring proof of notice.

Questions about the frequency of abandoned vehicles drew responses that the issue is not common across all portfolios but can be significant when it occurs because the vehicle is often the only collateral for a loan and lenders lose recovery options. Representatives asked staff and proponents to work on minimizing administrative burden while protecting secured parties.

No vote was taken during the hearing; proponents and opponents indicated willingness to continue negotiations.