Disclaimer: This article is for educational purposes only and does not constitute legal advice.
Detailed Answer
Under New Jersey law, an administrator—whether handling an estate, trust or corporate transaction—must confirm that a vehicle loan is fully paid before transferring or releasing the title. Follow these steps to verify full satisfaction of the outstanding loan:
- Obtain a Lien Release from the Lender: Once the borrower pays the balance in full, N.J. Rev. Stat. § 39:10-9 requires the lender to issue a lien release or satisfaction letter. This document typically appears on lender letterhead and includes the vehicle identification number (VIN), payoff date and a statement that the lien is released. Keep the original or a certified copy for your records. (N.J. Rev. Stat. § 39:10-9)
- Verify the UCC Termination Filing: Security interests in vehicles also fall under the Uniform Commercial Code (UCC). Under N.J. Stat. Ann. § 12A:9-513, lenders must file a UCC-3 termination statement with the New Jersey Department of Treasury, Division of Revenue and Enterprise Services. You can confirm the termination by searching the UCC filings online here: NJ UCC Termination Search.
- Review the MVC Certificate of Ownership: In New Jersey, the MVC’s certificate of ownership (commonly called the title) must be updated to remove any lien notation. Submit the lien release plus the current title to the NJ Division of Motor Vehicles. Follow the MVC’s lien-release procedure: NJ MVC Lien Release Procedures.
- Request Written Confirmation: As an extra precaution, ask the lender for a written payoff confirmation or affidavit of satisfaction. This is especially important when acting as an administrator in an estate or corporate setting. A notarized affidavit provides clear evidence of due diligence.
- Maintain Detailed Records: Keep copies of all payment receipts, the lien-release document, UCC termination notice and MVC correspondence. Organized records protect you against future claims that the loan remains unpaid.
Helpful Hints
- Confirm the lender’s contact information on the lien release to ensure the document’s legitimacy.
- Allow up to 30 days for UCC termination filings to post in the state database.
- Use certified mail or courier with tracking when submitting documents to the lender or MVC.
- Check for multiple liens or financing statements before proceeding with the title transfer.
- If the lender refuses to issue a clear lien release, consider consulting a qualified attorney for next steps.