United States Department of TransportationInterpretation ID: aiam3407
Catralla of Washington
P.O. Box 33639
Seattle
WA 98133;
Dear Mr. Lucas: Your letter of January 29, 1981, to Regional Administrator Hall ha been forwarded to this office for response. We are sorry for the delay in responding. In your letter you raised several questions concerning the responsibilities of lease companies under the Federal odometer laws. Based on the limited information we have concerning the transaction described in each question and the fact that many of the questions involve issues of state law, we find it impossible to answer each of the questions you have presented fully. For example, your first question refers to the following apparent changes of ownership:'When the lease company leases the vehicle to its customer, they put a bank on the title as legal owner and the customer and the lease company become the dual registered owners.' Without reviewing the documents which bring about these arrangements and without understanding their significance under state law, we are unable to determine the applicability of the Federal odometer disclosure requirements.; However, the following constant principle may be applied: The Federa odometer laws require any person who transfers his ownership in a motor vehicle to execute an odometer disclosure statement. Motor Vehicle Information and Cost Savings Act, the term transfer means to change ownership (of a vehicle) by purchase, gift, or any other means. 15 U.S.C. 1982(5). If a transaction that is characterized as a lease results in fact in a transfer of ownership under state law governing ownership, an odometer disclosure statement must be executed. Also, when a lease contract contains a purchase option clause, the lease company must make disclosure to the lease customer at the time the option is exercised. Accordingly, disclosure must be made whenever there is a transfer of ownership of a vehicle.; The owner of the vehicle is responsible for the execution of a prope odometer disclosure statement when he transfers ownership. If the actual formalities of transfer can be most conveniently made by the lessee or some other third party on behalf of the owner, there is no reason the lessor, if he is the owner, cannot make this party his agent for the puspose of exeucting the odometer disclosure requirements.; Finally, when a vehicle is sold as salvage, disclosure does not have t be made if the vehicle cannot be returned to the road. However, if the vehicle is repairable and can subsequently be used as a motor vehicle, disclosure must be made.; We suggest that you seek hte advise of legal counsel of your own choic in applying these principles to particular situations such as those you have described.; If you have any further questions, please do not hesitate to write. Sincerely, Frank Berndt, Chief Counsel