Date Published: January 9, 2013

The Colorado Division of Motor Vehicles (Division) has proposed rules to implement the current statutory requirements for posting a bond for a certificate of title (Defective Title) when the applicant for the certificate is unable to provide satisfactory evidence of proof of ownership of a vehicle. Current law requires a bond for twice the appraised value of the vehicle. The rules would outline the documentation required for obtaining a bonded certificate.  A surety bond would be required under the proposed rules, unless the vehicle is 25 years or older and the applicant provides a notarized bill of sale that is within twenty-four months of the date of sale. Further, a bond would not be required if the vehicle is a trailer, and the applicant provides a “DR 2697 Certification of Equipment Compliance for Trailers 2000 Pounds or Less” form.  Of note, the rules provide that the certificate applicant would have to obtain releases of all liens of on the vehicle. For liens filed in Colorado, the applicant could post a bond for the amount of the lien or twice the appraised value of the vehicle, whichever would be greater.

Certificate of title bonds, commonly referred to as defective tile bonds are required in many states when the title for a motor vehicle cannot be found

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