2005-11-30 CC Packet - Laserfiche WebLink

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seizure, tow, storage, forfeiture and sale of the vehicle. The lienholder's recovery of any deficiency is from the debtor. 3. Rights of Lienholders and Lessors Once a valid Iienhold or leasehold interest is established. the forfeiting agency must provide that party with a Notice and keep it apprised of the proceedings, even if the secured party simply relies on its priority under the statute and does not file a Demand in its own name. (a) Imputing knowledge/reasonable steps defense: The secured party's interest is subject to forfeiture only where they 'had knowledge of or consented to the act upon which the forfeiture is based'. 9169A63, subd. 7(b). The ability of law enforcement to impute that specific knowledge is not possible except in the rare case where the secured party or lessor has a close relationship with the driver. Unlike the case of a claimed innocent owner, the secured party or lessor does not bear the burden of producing evidence of its lack of complicity in the illegal use. Once a valid lien or lease is established, the forfeiting agency must go forward with evidence of complicity, which secured party or lessor can then rebut. (b) Demand for return of vehicle: Where a financial institution holds the loan or lease, it can demand after the forfeiture is complete that the vehicle be returned to it for disposal. This demand must be made in writing within 30 days of receipt of the Notice. No release of the vehicle is mandated until the financial institution provides proof of its valid security agreement or lease and agrees not to sell the vehicle to a member of the violator's household. Once the financial institution sells the vehicle it must reimburse the forfeiting agency for its seizure, storage and forfeiture costs. Any excess proceeds after satisfaction of the lien must be forwarded to the state treasury. 9169A63, subd. 11. (c) Leasehold interests: A lease of more than 180 days is presumed a form of financing so that the forfeiture is not automatically defeated by innocent ownership. However, it is unclear once the forfeiture of a leased vehicle is completed what recognition must be given the leaseholder because most lease agreements do not provide the lessee with identifiable equity in the vehicle prior to the end of the lease term. In most cases, the forfeiting agency will, upon verification of the terms and conditions of the lease, allow the lessor to invoke the clause, if any, in the lease agreement allowing for automatic termination and repossession for illegal use of the vehicle and the release the vehicle to the 7 11