Section 12 Withholding of certificate; bond - Massachusetts Statutes

Section 12. If the registrar is not satisfied as to the ownership of the vehicle or that there are no undisclosed security interests in it, the registrar may register the vehicle but shall either:

(a) Withhold issuance of a certificate of title until the applicant presents documents reasonably sufficient to satisfy the registrar as to the applicant’s ownership of the vehicle and that there are no undisclosed security interests in it; or

(b) As a condition of issuing a certificate of title, require the applicant to file with the registrar a bond in such form as the registrar shall prescribe executed by the applicant, and either accompanied by the deposit of cash with the registrar or also executed by a person authorized to conduct a surety business within the commonwealth.

The bond shall be in an amount equal to one and one half times the value of the vehicle as determined by the registrar and conditioned to indemnify any prior owner and lienholder and any subsequent purchaser of the vehicle or person acquiring any security interest in it, and their respective successors in interest, against any expense, loss or damage, including reasonable attorney’s fees, by reason of the issuance of the certificate of title of the vehicle or on account of any defect in or undisclosed security interest upon the right, title and interest of the applicant in and to the vehicle. Any such interested person has a right of action to recover on the bond for any breach of its conditions, but the aggregate liability of the surety to all persons shall not exceed the amount of the bond. The bond, and any deposit accompanying it, shall be returned at the end of three years or prior thereto if the vehicle is no longer registered in the commonwealth and the currently valid certificate of title is surrendered to the registrar, unless the registrar has been notified of the pendency of an action to recover on the bond.