NOTICE: The information below was obtained directly from the Division of Motorist Services website. Links are provided so you may access the content on the DMS website.
Division of Motorist Services (DMS – formerly known as DMV) records inspections consist of the following seven (7) areas:
- Paperwork for all RVs displayed for sale.
- Paperwork for all RVs purchased and sold.
- Records of all temporary tags issued.
- Records regarding all trades, including lien pay off.
- Dealer plates – all must be accounted for and used for lawful purposes.
- Dealer agents – evidence of W2 or 1099 with independent contractor agreement.
- Review of appropriate Florida statutes.
Records inspections either occur periodically or as a result of a consumer complaint.
The Division of Motorist Services provides the following guidelines in its Florida Motor Vehicle, Mobile Home and Recreational Vehicle Dealers’ Handbook, 14th Edition, 2014 (page 89).
The Department, through its representatives, makes periodic inspections to ensure that appropriate records are being kept. Dealers are required to keep accurate records on every motor vehicle purchased or sold, the status of the titles on every vehicle in the dealer’s possession and being offered for sale, and complete and accurate records on all temporary tags in the dealer’s inventory or those that have been issued including complete and accurate records of all pre-printed stock, electronic temporary plates acquired via department approved providers and those that have been issued, those that were acquired at the tax collector’s office. Dealers are also required to keep accurate records of all dealer tags purchased by the dealership so that each tag and the person to whom it is assigned for use can be easily and readily identified.
Records inspections are normally conducted by a Compliance Examiner from the Bureau of Motor Vehicle Field Operations, Regional Offices, but there are occasions when an inspection is conducted by a Compliance Examiner from the Manufactured Housing Section, Division of Motorist Services, or by a uniformed or plainclothes law enforcement officer from the Florida
Highway Patrol. These DHSMV representatives are equally authorized to conduct records inspections.
Dealers are required to cooperate and assist the Department by providing all information requested. Following a routine inspection, a licensee will be given an opportunity to correct any discrepancies found. A follow-up inspection, if needed, by the Compliance Examiner will ensure compliance.
A dealer who fails or refuses to cooperate by withholding records or failing to maintain records is subject to a fine or the suspension or revocation of their license. In addition, such failure or refusal constitutes a second-degree misdemeanor and subjects the dealer to arrest. ”
The following is an article written by S. Allen Monello, D.P.A. regarding DMS records inspections:
Are Your Records In Order?
How well will your dealership do when the Division of Motorist Services (DMS) comes by to conduct a records inspection? Most of you will probably do well. But if your records do not meet all of the statutory requirements, you will probably have a second inspection within 60 days.
Here is what you can expect from a records inspection. First, the Compliance Officer will look at the vehicles you have displayed for sale. They will want to see:
- Properly reassigned titles (to the dealership) or other indicia (proof) of ownership (Those of you who display vehicles for sale before receiving the title from the auction will have an issue here. An auction bill of sale is not proper proof (indicia) of ownership.);
- Odometer disclosure statements for each vehicle; and
- Buyers Guides properly displayed on all vehicles for sale.
Up to 10 vehicles displayed for sale are checked. But this part is fairly easy and hopefully you will get past this with no problems.
Second, the Compliance Officer will check up to 10 deal jackets of vehicles you have already sold. The CO will check for:
- Proof of ownership (indicia),
- Properly completed odometer disclosure statements;
- Certification of Pollution Control Devices on used cars;
- Proof of insurance for your buyers;
- The dates you sold the vehicles and the dates you applied for titles and registrations (which should be no longer than 30 days from the date of sale);
- Your copy of the Buyers Guide that you provided to the customer;
- Whether you issued any temporary tags and how many (you should issue only one, but with good reason a second may be issued – but never more than two);
- And here is a big one – how much you charged the customer for tag and title versus how much you actually paid. If you charged more than you paid, you need to prove that you issued a refund to the customer (always issue refunds via company check so you will have an audit trail).
Third, a great deal of scrutiny will be directed toward your purchase and use of pre-printed temporary tags. You may purchase a small amount of pre-printed tags but they are only to be used when the electronic temporary registration (ETR) system is down. Here is something you may not know – when you purchase pre-printed temporary tags from your tag office, they are required to report the purchase to DMS. If it appears you are purchasing an unusual amount, you can probably expect a visit from a Compliance Officer.
Fourth, focus will then be directed to trade-in vehicles and how you handle them. Three things you need to know:
- You may not dispose of the customer’s trade-in until the “deal is consummated,” unless you have a signed authorization from the customer authorizing you to do so.
- Trades with liens must be paid within 10 working (business) days from the date of trade. This is a statutory requirement.
- When you accept a trade from a customer, you have 30 days to report it to the tag agency so that the vehicle can be marked “sold”. Even though the title for the trade may still be in the name of the customer, this process protects the customer against liability should the vehicle be involved in a crime or if law enforcement orders it towed and ends up having a wrecker operator lien placed against it. When a customer buys a vehicle from you and a trade is involved, you are already reporting this by placing the traded vehicle information on the last line of the front page of the title application. But if you buy a vehicle from an individual and you don’t sell them a vehicle, no application for title will be submitted so you are therefore required to submit another form (HSMV 82050) to the tag office within 30 days of buying the vehicle.
Fifth, you will have to account for all of your dealer plates. Where are they? Who is using them? Are all the people who are assigned dealer plates bona fide employees of your dealership? And are all the vehicles that are displaying dealer plates owned by your dealership and are they for sale? (Sorry, but this leaves out family members, relatives, friends, etc. who are driving on dealer plates but who do not work for the dealership.)
And finally, the sixth item that will be checked are all the persons you list as authorized agents of your dealership. This includes those registered at auctions under your license and anyone who represents your dealership. A bona fide employee is any person who receives a W2 from your dealership or who is issued a 1099, and one who is under an independent contractor agreement with your dealership. If neither of these conditions exist, the agent is not authorized and you are in violation of Florida law.
The final part of the inspection includes a review of all appropriate Florida statutes that the dealer is governed by.
I hope this helps to prepare you for any future records inspections you may have.
The records inspection form used by the DMS is below. Click on each page to enlarge.