Vehicle Repossessions
RC Phillips, DDA (Ret.)
August, 2014
(Q) Who may legally undertake repossession assignments?
(A) Unless exempted pursuant to B&P Code 7500.3, only persons holding a valid repossession agency license or registration, issued by the State of California, may engage in the activities of a repossession agency. [B&P 7500.3]
(Q) When may a vehicle secured by a contractual agreement be repossessed?
(A) Normally, only when the buyer has defaulted in the performance of any obligation under the contract. Ordinarily a default occurs when an installment payment is delinquent. However, if the consumer is required by the contract to maintain insurance, a failure to do so may constitute a default, as allowing the collateral to be jeopardized. [CC 2983.3]
(Q) May a repossessor lawfully enter any area for purposes of repossession?
(A) YES, EXCEPT: a private building which means and includes any dwelling, outbuilding, OR other enclosed structure or any secured area which means and includes any fenced and locked area.
(Q) At what point has a motor vehicle been legally repossessed?
(A) With regard to collateral subject to registration under the Vehicle Code, a repossession occurs when the repossessor gains entry to the collateral or when the collateral becomes connected to a tow truck. [B&P 7507.12]
7507.12. (a) With regard to collateral subject to registration
under the Vehicle Code, a repossession is complete if any of the
following occurs:
(1) The repossessor gains entry to the collateral.
(2) The collateral becomes connected to a tow truck or the
repossessor's tow vehicle, as those terms are defined in Section 615
of the Vehicle Code.
(3) The repossessor moves the entire collateral present.
(4) The repossessor gains control of the collateral.
(b) No person other than the legal owner may direct a repossessor to release a vehicle without legal authority to do so.
(Q) May a law enforcement officer force a repossessor to give up possession of an automobile or property?
(A) Peace officers may not advance or hinder repossessions. Because they are acting under "color of state law," they may no more force a debtor to surrender a car than they may, after a car has been repossessed, force the repossessor to return it. Without a court order, both things violate the "due process" requirements of the 14th Amendment of the United States Constitution and Article 1, Sections 13 and 15 of the California Constitution.
(Q) Should a repossessor have a Police Officer accompany him / her on a repossession?
(A) Self-help repossession provisions of UCC 9-503 do not violate the Fourteenth Amendment if it is the conduct of a private individual dealing with a private individual. However, the presence of a police officer or a patrol car accompanying a repossessor has been found by several courts to constitute "color of law" and has taken the repossession out of the area of "purely private conduct without state assistance." Do not take a sheriff or police officer out on a self-help repossession.
(Q) Is it a crime to conceal a motor vehicle or other collateral?
(A) YES! Any person in possession of collateral who conceals property with the intent to defraud a creditor may be guilty of a felony. [PC 154, or 538]
154. (a) Every debtor who fraudulently removes his or her property or effects out of this state, or who fraudulently sells, conveys, assigns or conceals his or her property with intent to defraud, hinder or delay his or her creditors of their rights, claims, or demands, is punishable by imprisonment in the county jail not exceeding one year, or by fine not exceeding one thousand dollars($1,000), or by both that fine and imprisonment.
(b) Where the property so removed, sold, conveyed, assigned, or concealed consists of a stock in trade, or a part thereof, of a value exceeding two hundred fifty dollars ($250), the offense shall be a felony and punishable as such.
538. Every person, who, after mortgaging any of the property permitted to be mortgaged by the provisions of Sections 9102 and 9109
of the Commercial Code, excepting locomotives, engines, rolling stock of a railroad, steamboat machinery in actual use, and vessels,
during the existence of the mortgage, with intent to defraud the mortgagee, his or her representative or assigns, takes, drives,
carries away, or otherwise removes or permits the taking, driving, or carrying away, or other removal of the mortgaged property, or any
part thereof, from the county where it was situated when mortgaged, without the written consent of the mortgagee, or who sells,
transfers, slaughters, destroys, or in any manner further encumbers the mortgaged property, or any part thereof, or causes it to be sold,
transferred, slaughtered, destroyed, or further encumbered, is guilty of theft, and is punishable accordingly. In the case of a
sale, transfer, or further encumbrance at or before the time of making the sale, transfer, or encumbrance, the mortgagor informs the
person to whom the sale, transfer, or encumbrance is made, of the existence of the prior mortgage, and also informs the prior mortgagee
of the intended sale, transfer, or encumbrance, in writing, by giving the name and place of residence of the party to whom the sale,
transfer, or encumbrance is to be made.
(Q) What is to be done with personal effects or other personal property?
(A) Personal property shall be removed and a complete and accurate confidential inventory shall be made. Said items shall be securely stored for a minimum of 60 days. It is required that the repossession agency only notify the consumer of this inventory by written notice or by personal service within time limits prescribed by law. [B&P 7507.9
(Q) Is it lawful for a repossessor to take or use personal effects that are connected to the collateral at the time of repossession?
(A) YES! "Nothing prohibits the using or taking of personal effects that are connected, adjoined or affixed to the collateral through an unbroken sequence, if that use or taking is reasonably necessary to effectuate the recovery in a safe manner or to protect the collateral or personal effects". [B&P 7505.2]
7505.2. Nothing in this chapter prohibits the using or taking of personal effects that are connected, adjoined, or affixed to the
collateral through an unbroken sequence, if that use or taking is reasonably necessary to effectuate the recovery in a safe manner or
to protect the collateral or personal effects. Nothing in this chapter prohibits the removal of a locking mechanism or security
device on the collateral, before, during, or after a repossession. No storage fee shall be charged for the first week on any personal
effects used to effectuate a recovery pursuant to this section. Any personal effects used or taken pursuant
Sergeant Jim De Masi
Whittier Police Department
