Houston Independent Automobile Dealers Association January 2016 Issue: How Compliant Are You? | Página 8

Answers to the 2015 Annual Compliance Quiz
1. b. There is no minimum amount of loss that triggers
the liability carrier’s obligation to include a registered
lien holder on the settlement check. (January, 2015;
Law Protects Lienholders in Liability Insurance Claims)
2. False. If a dealer charges a doc fee in excess of $50,
s/he must notify the OCCC. Separate notification is
required for each dealership location.
(January, 2015; Doc Fee: Second Verse, Same as the
First)
3. False. A dealer is required to transfer all sales. The
only exception is a “no sale” where all consideration
paid is refunded and any payment obligation
cancelled. (February, 2015; Timely Transfer of Titles
Requires Diligence)

11. True. A Related Finance Company has to be a
separate entity to qualify for federal income tax
benefits. An RFC is required to have an OCCC
Vehicle Finance License since it owns and services
motor vehicle installment contracts. Because it is
a separate entity from the dealership it needs its
own OCCC license. (July, 2015; OCCC Audits Spur
Review of Compliance Procedures)
12. d. Any change in your business form comes with
potential complications and should be undertaken
with professional advice. (June 2015; A Cautionary
Tale About Changing Your Business Entity)

4. c. Under federal law, notice must be attached to the
left door frame of the vehicle. (February, 2015; A Few
Quick Hitters)

13. e. Notice of bankruptcy filing can take any form.
Courts will hold creditors to the terms of the
automatic bankruptcy stay if they have gotten any
type of notice. (September, 2015; Bankruptcy Basics
for Car Creditors: Separating Fact from Fiction)

5. c. The Texas statutory provision for such a court order
is “sequestration.” (March, 2015; Obtaining Court
Orders To Enforce Liens)

14. d. If you missed this one, reading the entire source
article is your best bet. (July 2015; Takata Issue
Brings Recalls to Forefront)

6. True. As long as the dealer actually pays for the
inspection and retains the receipt, the cost of a vehicle
inspection may be passed through to the customer.
(March 2015; The “Single Sticker” Dealer Dance: Fees,
Contracts, TT&L)

15. False. While a car creditor can reject a “nameddriver- only” policy or an “excluded- driver”
policy, a short-term policy written by a licensed
insurance company can’t be rejected. (November,
2015; Chasing Property Damage Insurance: A Broken
Model)

7. b. Texas law provides that the tender of all required
forms, documents, and payment to the County Tax
Office establishes perfection. (April 2015; Dropped
Liens Are Disastrous, But Avoidable)
8. False. A dealer may register a vehicle as long as it has
a current, passing inspection. “Current” means at least
one full month remaining at the time the paperwork
is submitted to the county. NOTE: Stay tuned; this
will change on March 1, 2016. Renew your TIADA
membership so we can keep you up to date. (April
2015; Single Sticker Meets the Real World)
9. False. In fact, Texas law requires dealers to handle the
transfer. It is a violation to turn over transfer papers
to the customer to be filed (except qualifying out-ofstate transfers). Prior to passage of the deferred sales
tax law, dealers were actually handing over titles to
avoid being liable for the entire amount of sales tax
due at transfer. (June, 2015; Jim Watson: Father of
Deferred Sales Tax)
10. b. A VSF lien is indeed superior. Almost all other
storage liens are inferior and therefore require a
release of lien from the car creditor. (May 2015;
Storage Charges: The Never Ending Story)
44

(questions found on pg. 18)

16. False. The buy-back order does apply to vehicles
held by independent dealers. (September 2015; Do
You Recall?)
17. e. The Texas Finance Code specifically provides that
one of these two items triggers debt cancellation
under a DCA. (December, 2015; Alternatives to
Traditional Property-Damage Insurance Offer
Options to Dealers)
18. b. The “white” non-secure POA is not required in
the deal jacket. In fact, the white POA may not be
assigned to a dealer or an employee or relative of
the dealer. (October 2015; The Deal Jacket)
19. b. Installment sellers (including BHPH dealers) are
required to use the accrual method. (October, 2015;
Dealers’ Check List: Things You Can Fix Right Now)
20. False. Sorry but Obama can’t be blamed on this
one. The study is true but it suggests that the surge
in safety recalls and rising prices are the primary
driving forces behind consumers’ increasing
disgruntlement. (November 2015; VW Diesel
Emissions Fiasco Keeps Recalls Front and Center)

T e x a s

D e a l e r

December 2015