LTO Issues P40K Penalty for Failure to Transfer Vehicle Ownership

LTO’s Administrative Order AO-VDM-2024-046

(SPOT.ph)Using a second-hand vehicle? Note that an official transfer of ownership is now strictly enforced by the Land Transportation Office (LTO). The agency has issued new guidelines on ownership transfers for all registered vehicles, and failing to get this done could hit you with a fine of up to P40,000.

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LTO's New Guidelines on Vehicle Ownership Transfer

As per LTO’s Administrative Order AO-VDM-2024-046, dated August 30, 2024, both new and original car owners are in for some paperwork.

The new car owner has 20 days from the sale or acquisition date to complete the ownership transfer, with the following requirements:

• Notarized Deed of Conveyance
• Original Official Receipt (OR) or Certificate of Registration (CR) issued by the LTO
• Valid original Philippine National Police - Highway Patrol Group (PNP-HPG) Motor Vehicle Clearance Certificate
• Duly accomplished Motor Vehicle Inspection Report (MVIR) or Private Motor Vehicle Center (PMVIC) Inspection Report
• Proof of electronically transmitted appropriate insurance Certificate of Cover, if the motor vehicle is due for renewal
• Secretary's Certificate, if the motor vehicle or motorcycle is owned by a corporation

Miss the deadline, and new car owner can end up with a flagged vehicle in the LTO system, plus the P40,000 penalty.

Meanwhile, the previous owner or car seller has five days to report the sale, donation, or transfer of ownership to the LTO. This process involves submitting copies of the OR, CR, a notarized Deed of Sale (DOS), and two valid government-issued IDs from both parties. If they miss the deadline? They’re looking at a P20,000 fine.

The Administrative Order takes effect 15 days following publication in the Official Gazette or two newpapers of general circulation in the country.

Before, many second-hand vehicle owners relied on the Open Deed of Sale method, where only the original owner’s name is in the Certificate of Registration even after the car has been sold multiple times. This practice allowed buyers and sellers to bypass the formal ownership transfer process. However, the LTO is cracking down on this with stricter enforcement of the law.

The new guidelines strengthen the existing laws under Republic Act 4136 (Land Transportation and Traffic Code) and Republic Act 10883 (Anti-Carnapping Law), aiming to prevent fraudulent and illegal vehicle transactions. They also protect sellers from future liabilities if the vehicle is involved in any accidents or crimes after the sale.