The perfection and discharge of a security interest in any property which has been issued a Kentucky certificate of title shall be by notation on the certificate of title (KRS 186A.190)(1). The lien is effective from the date on which the security interest is noted on the certificate of title for a period of seven (7) years, or in the case of a manufactured home for a period of thirty (30) years or until discharged.  A continuation statement can be filed within six months preceding the expiration of the initial notation that extends the notation’s effectiveness for seven additional years.  (KRS 186A.190(1).  Effective July 1, 2001

Property Required to be Titled

Vehicle (KRS 186.010(8)(a)
Manufactured (or mobile) home or trailer. (KRS 186.650)
Motorboats (KRS 186A.015, 235.055)

186A.070 REGISTRATION AND TITLE REQUIREMENTS FOR VEHICLES, MANUFACTURED HOMES, OR TRAILERS

Except as otherwise provided, the state resident owner of a vehicle as defined in KRS 186.010(8)(a), manufactured home as defined in KRS 186.650, or trailer which will not be operated upon the highways of this state shall within fifteen (15) days apply for and obtain a certificate of title in his name. He shall not, however, be required to obtain a certificate of registration until the vehicle, manufactured home, or trailer is to be operated upon the highways of this state.

186A.015 AUTOMATED MOTORBOAT REGISTRATION AND TITLING; AGENCIES TO IMPLEMENT SYSTEM

(1) Except as provided for in KRS 235.050, the titling and registration of motorboats as defined in KRS 235.010 shall be administered through the automated motor vehicle and trailer registration and titling system developed and implemented under the provisions of KRS 186A.010.

Requirements for Filing a Title Lien Statement KRS 186A.190, KRS 186A.193, KRS 186A.195 & KRS 355.9-502(1)

A title lien statement must have the following information to be filed:

1. The name(s) of the debtor and their mailing address
2. The name of the secured party and their mailing address
3. Date executed
4. Description of collateral (year, make, ID Number)
5. Title or goldenrod copy of form (TC-96-181) *
6. Fees equal to or greater than the required fee

*Note to Clerks: A certified copy of the form TC-96-181 would be sufficient provided the filer states that the goldenrod is lost and AVIS shows a pending lien.

The Title Lien Statement is the only recognized form for transmitting the required information needed to establish a lien on the certificate of title. 

 KRS 186A.190(6) states "In noting a security interest upon a certificate of title, the county clerk shall ensure that the certificate of title bears the lienholder's name, mailing address and zip code, the date the lien was noted, the notation number, and the county in which the security interest was noted. The clerk shall obtain the information required by this subsection for notation upon the certificate of title from the title lien statement described in KRS 186A.195 to be provided to the county clerk by the secured party."

Change of Address

The address listed on a Kentucky Certificate of Title is immaterial in determining which county is the proper place to file a title lien statement. There is not a requirement to show a current residence address on a title. The debtor only needs to furnish their corrected address to be updated in AVIS (KRS 186A.235). It is improper for a county clerk to require a new title with an updated address. The address on the title does not direct where a lien is to be filed. It is to be filed in the county of residence. The address on the title is not pertinent.

Clarification of Clerk’s Terminology

Throughout this document and in clerk’s offices across the state we use terms that can mean the same thing.  To identify the accurate definition for filing date, date input into AVIS and date in AVIS  - the date entered into AVIS is the time stamped date when the document was received in the county clerk’s office. 

Place of Filing KRS 186A.190(2)

Generally, a title lien filing should be made in the county of the debtor's residence, if an individual, and in the county of principal headquarters of a resident business or in the county of principal use of the titled property, if the business or individual is a nonresident. See KRS 186A-190(2) for additional specific residential exceptions and restrictions.

Filing Fees KRS 64.012

Receipt of the filing fee is a recording requirement.The filing fee for a title lien statement is $22.00 per individual titled property. (KRS 64.012, KRS 142.010, KRS 382.240)

$12.00 Filing per vehicle
$5.00 Filing termination statement (to be collected at filing) $4.00 Legal process tax per KRS 142.010
$1.00 Postage (KRS 382.240)
Note: While KRS 382.240 does not set a specific postage charge, the Clerk's Association has adopted a $1.00 per instrument minimum postage fee.
$22.00 Total fee for filing and discharging a title lien per item of titled property.

Partial Terminations

There are no circumstances that produce title lien partial terminations.

Duration of Filing (KRS 186A.190)

Once a title lien is noted upon the face of a certificate of title, it is effective for seven (7) years or in the case of a manufactured home for thirty (30) years from the dates entered into AVIS. Unless a continuation is filed the lien will expire based upon the date the lien was input into the AVIS system.

Like all other terminations, only the county clerk’s office where the original lien was filed will be allowed to remove an expired lien from the AVIS system. The lien will have to be released from AVIS after it expires when requested by the debtor. However, the clerk must leave the name of the debtor in their index system for one year after the expiration.

Late Filing of Title Liens - KRS 186A.200(2)

Statutory law requires the secured party to file the lien within twenty (20) days of its execution by the debtor. If not timely filed, a penalty of $2.00 is assessed by the County Clerk as a prerequisite for filing, together with the regular filing fee (KRS 186A.200(2)). Title Lien Statements should be dated. If a title lien statement is not dated, a $2.00 fee is charged because the clerk's office has no way of knowing when the document was executed.

Transfer of Ownership - KRS 186A.215

Ownership transfer is prohibited until the secured party of record terminates any and all existing lien notations in writing. This termination must be filed in the county where the lien was filed. Only the county where the lien is filed may cancel the lien in the AVIS. (KRS 186.045(2))

Any repossession transaction processed by a secured party must be processed in the county where the first lien was filed.

In situations where there are two liens on the same vehicle in different counties, a secured party would submit the proper documents to the county where the first lien is filed. That county would forward a photocopy of the repossession affidavit (form TC96-192) executed by the secured party of record to the county where the second lien is filed. This second county would use the copy of the repossession affidavit received as a termination and terminate the lien in their records and in AVIS.

Requirements for repossession:

1. Form TC96-192, Affidavit of Repossession
2. Termination Statement
3. New titling fees

Some secured parties will file an amendment to change their mailing address. No other situation requires or permits amendments to title lien statement filings.

The notation of a lien on the certificate of title is effective for seven (7) years (or in case if a manufactured home thirty (30) years from the date the security interest is noted on the certificate of title. The filing of a continuation statement within six (6) months preceding the expiration of the initial period of a notations effectiveness extends the expiration date for seven (7) additional years for all titled property (including mobile or manufactured homes.)

The original file date is the date used to determine the expiration date. Therefore the expiration date is seven (7) years from the original file date. The six (6) month period preceding the expiration date that the continuation statement can be filed is also based upon the original file date. The continuation statement must be in the county clerk's office by the expiration date. There is no provision for envelopes that are postmarked on the expiration date, but received a few days later. If you do not have the continuation statement by the expiration date the filing has expired. Do NOT process a continuation statement after the expiration date. A filed financing statement lapses on the expiration date unless a continuation statement is filed.

The county that filed the original lien will process the continuation statement in its index and attach the continuation statement to the original title lien statement.There will not be any input into the AVIS system.It is important to remember that ONLY the county that originally filed a lien can continue or release a lien.The county that files the original lien and the continuation must insure the continuation statement is properly linked to the original filing.Proper filing of the continuation statement is imperative to keep intact the perfection of the lien.

NO FEE is collected on a continuation statement for any titled property. The fact that a lien on titled property now has an expiration date is to the benefit of each clerk.Continuations on titled property will be the exception rather than the rule.

The recording requirements for a continuation statement are as follows:

1. Received by the county that filed the ORIGINAL TLS
2. Name and address of debtor
3. Name and address of secured party
4. Date of original notation on title
5. Original File number
6. States it is a continuation - this must be submitted by the lien holder of record

There is no provision for a lapsed filing as it relates to titled property. If presented with a request, the clerk must inform the secured party to obtain the certificate of title from the owner and file a new Title Lien Statement.

Document requirements are as follows:

1. The name of the secured party of record
2. The name of the debtor
3. The original file number
4. The original date of filing
5. The name and address of the assignee
6. A description of the titled property assigned including the ID Number

The secured party is required by statute to file a termination within one (1) month after the loan is paid in full or within twenty (20) days after the secured party receives an authenticated demand from a debtor. (KRS 355.9-513 (2)). The termination must be filed in the county where the lien was originally filed. The termination statement must come from the secured party. Effective July 15, 2004 the termination statement must be signed by the secured party (KRS 186.045).

The legal holder of the record is the only entity allowed to submit a lien release or termination statement. The assigned party may instruct the secured party to terminate the lien.

When the owner presents his title to ANY COUNTY CLERK in this state, KRS 186.045(2) requires any clerk to access AVIS and note the termination on the title, the county where the termination was filed and place their seal on the title KRS 186.045(1).

The clerk must retain termination statements for two years from the date of filing. After the two-year period, the clerk may destroy the termination statement (KRS 186.045 (1).

The recording requirements for a termination statement are as follows:

1. The name of the secured party of record
2. The name of the debtor
3. The original file number
4. The original date of filing
5. A description of the titled property assigned, including the ID Number
6. The signature of the secured party (Effective 7-15-04)

The fee for the termination was collected when the lien was filed.

The Kentucky County Clerk’s Association agreed to only accept terminations in the following formats:

1. Form TC-96 Title Lien Statement
2. Original Receipt/Termination Statement provided by the County Clerk
3. UCC-3 form (least preferred form to receive)

The Association agreed to reject Termination Statement on Company letterhead.

Any titled property is prohibited from being transferred to a different owner unless the lien notation is released in writing. However, numerous situations occur that promote the need to transfer the titled property from the current owner names to a different name or names (divorce, etc.). As an accommodation to the customer for these situations the clerk may transfer equity as described below. There is not a statute to cover this type transfer.

A transfer of equity is simply the written permission of the secured party to remove the existing lien temporarily, process the transfer and then refile the lien into AVIS immediately, so the same lien will appear on the new title. The fee for this is $22.00 and treated like a new lien filing in all respects including a new file number. This transfer transaction must be performed in the county where the subject lien is filed. If the debtor has two liens on the title, written permission is required from both secured parties in order to process the transfer of equity.

The clerk processing the transfer of equity will establish the pending lien immediately and the lien must be processed the same day.

The new file number will need to reflect the original date and time.

If there are two liens on the title it will be the responsibility of the clerk to ensure the transfer of equity liens are in the correct order.

Since a goldenrod or title are required in order to establish another lien there should not be any concern that someone could file a lien in front or in addition to the transfer of equity process. The goldenrod or title should be with the transfer of equity paperwork and the system will show a pending lien.

The clerk’s office will send the secured party a new receipt.

This entry into the AVIS system does not change the legal responsibility of the person(s) that signed the original lien. This is merely a means to accommodate a customer.

Many county clerks do not permit a transfer of equity in their county. There is no statute that addresses this situation.

Clerks are regularly requested to place a variety of other liens against titled property. Liens on titled property are limited to commercial liens. (A commercial lien includes an individual loaning money to another and filing a lien as long as the titled property is the collateral.) The title document and the AVIS system have a maximum capacity of only two liens at any time per titled property. You may file lis pendens, judgement liens, mechanics liens, etc. in your regular place for filing such liens, however, they are 100% ineffective since they do not have and cannot appear on the title document. Referring you to the prevailing statute, “the sole means of perfecting and discharging a security interest in property for which a certificate of title is required by this chapter is by notation on such property’s certificate of title” (KRS 186A.190(2)).

There has been some confusion concerning child support liens that are being filed by the Cabinet for Families and Children. KRS 205.745 states that liens are to be handled in the manner that "lis pendens" are handled. Chapter 186A only recognizes commercial type liens i.e., to protect people or secured parties who loan money to a debtor for the purchase of a vehicle. Therefore, a County Clerk is not permitted to place a child support lien in the AVIS system. Without the title a child support lien on a vehicle is 100% ineffective since they do not, and cannot appear on the title document. The only effective method of placing a lien on a titled property in Kentucky is by its notation on the title.

SEE THE LAND RECORDS SECTION for the correct recording information on Child Support Liens.

BOATS AND MOTORS

When filing liens on boats, motors and trailers use the following guidelines

Boat is titled property - file on a title lien statement

Trailer is titled property - file on a title lien statement

Inboard motor is filed as part of the boat - no additional filing is needed

Outboard Motor - File on UCC-1 - to be filed at the Secretary of State Office

Inboard/Outboard Motor - File on UCC-1 - If a separate filing is made by the secured party on the inboard/outboard motor only, that filing goes to the Secretary of State. In some boats the inboard/outboard motor is an integral part of the boat and is covered by the filing on the boat.

Boat - always file the lien on a title lien statement unless the vessel is a "documented vessel". (See information on documented vessels)

DOCUMENTED BOATS/VESSELS

To register as a documented boat, the customer has to contact:

National Vessel Documentation Center
2039 Stonewall Jackson Dr
Falling Waters, WV 25419

1-800-799-8362
1-304-271-2405 Fax

All filings and information associated with a documented vessel are handled at this office.

If the vessel is used for recreational purposes and meets the above requirements the owner has the option of documenting the vessel.

If the vessel is used for commercial purposes and meets the above requirements the owner must operate under a certificate of documentation issued by the U. S. Coast Guard.

Taxes are billed through local PVA office as tangible taxes and will be collected by the sheriff's office.

The customer must file a return with the PVA office.

Registration on a documented boat is surrendered in the AVIS system.

Vessels holding a United States certificate of documentation are exempt from the application process normally associated with registration or renewal. KRS 235.070(2)(f).

Preferred Ship Mortgages or related instruments associated with a documented vessel must be filed with the U. S. Coast Guard, National Vessel Documentation Center (address shown above).

Recording requirements include at least the following:

1. A mortgage or related instrument must be submitted in one original and one copy and cannot bear any material alterations.
2. Must be signed by, or on behalf of, the vessel owner(s) and acknowledged by a Notary Public.
3. Must cite the addresses of both the mortgagor and mortgagee.
4. Must cover the "whole: of the vessel; cite a definite amount and identify the vessel by name, official number and/or hull number.
5. Be accompanied by a recording fee of $4.00 per page. A page printed on both sides is considered two pages. The fee is based on the original only.
6. A mortgage cannot be accepted for filing unless the vessel has a valid Certificate of Document or an Application for Initial Issue, Exchange or Replacement filed.

The filing of a mortgage may be terminated, or if recorded, removed from record by the submission of a satisfaction or release instrument, a court order, affidavit, or Declaration of Forfeiture.

PHONY, BOGUS OR ILLEGAL LIENS - KRS CHAPTER 434.155

This statute does not give the County Clerk’s office any right to refuse the lien as long as the lien has the correct filing information.

In other words, if the document meets the recording requirements, the clerk’s office is obligated to record the document.

KRS CHAPTER 434.155
(1) A person is guilty of filing an illegal lien when he files a document or lien that he knows or should have known was forged, groundless, contained a material misstatement, or was a false claim. It shall be an affirmative defense that any material misstatement was not intentional.

(2) Filing an illegal lien is a Class D felony for the first offense, a Class C felony for any second offense, and a Class B felony for any subsequent offense.

FILE SEARCHES - (KRS 355.9 - 525 (3))

Any person may request a file search. The County Clerk shall issue his certificate showing whether there is on file on the date and hour stated within, any presently effective financing statement naming a particular debtor and any assignment thereof and if there is, furnish the date and hour of filing and the names and addresses of the secured parties therein. The fee for such is $5.00 per name searched.

Where to file: (KRS 355.9-501)

Other than Fixture Filings, Timber to be Cut and As Extracted Mineral all new UCC Filings are to be filed with the Secretary of State.

Other than an amendment to fully terminate a UCC filing, all amendments must be filed with the Secretary of State.

The county clerk may append a continuation to an existing UCC filing.

See Land Records Section for information on Fixture Filings, Timber to be Cut, and As-extracted Collateral.

A UCC filing is effective for a period of five years after the date of filing. (KRS 355.9-515) The filing lapses on the expiration of the period of its effectiveness (5 years after the file date). KRS 355.9-515(3). A continuation must be filed to prevent a lapsed filing.

The filing office shall maintain a record of the information provided in a filed financing statement for at least one (1) year after the effectiveness of the financing statement has lapsed. The record must be retrievable by using the name of the debtor and by using the file number assigned to the initial financing statement to which the record relates. KRS 355.9-522

UCC TERMINATION STATEMENT (UCC’s filed prior to July 1, 2001)

The county clerk can file a FULL Termination on any UCC filed prior to July 1, 2001. A partial termination MUST be filed with the Secretary of State.

Filing requirements KRS 355.9-512(1)(b)
File number of the initial financing statement
Name of the debtor
Name of the secured party
Provide a description of the real property
Indicates the termination or partial termination of the filing

Full termination is paid with the original filing

1. Postage per KRS 382.240 has been included in the above fees listed
2. $5.00 release fee included with filing
3. Legal process tax $4.00
4. Clerk's fee