Ohio has always required all dealers to first possess title to a vehicle before they display, advertise or sell it. Failure to comply with this law opens the dealership to civil and criminal charges. For more information concerning the criminal liability, please review ORC Section 4505.18(B) and 4505.99(C).
Recently, the Ohio Legislature enacted new legislation designed to allow certain dealers to display, advertise and sell vehicles that are not yet titled in the dealership name. The Ohio Legislature created the Title Defect Recision Fund which is to be administered by the Ohio Attorney General's Office. As long as the dealership has been in business for at least three years, the dealership can pay a $ 150.00 annual fee and be permitted to display, advertise and sell vehicles not yet titled in the dealership name. The Title Defect Fund does not act as insurance for the dealership, but rather as insurance for the public. If a consumer ends up purchasing a vehicle with a title defect, the fund will cover the losses of the consumer and then seek reimbursement from the dealership that sold the vehicle.
For dealerships less than three years old, they may participate by posting a $ 25,000.00 bond.
If your dealership does NOT display, advertise or sell vehicles until title is registered in the dealerships name, then the dealership is under no obligation to pay into the fund.
If a dealership does not pay into the fund, and they are caught displaying, advertising or selling a vehicle not yet titled in their name, civil and criminal penalties will still exist under the law.
