A secured party must file a termination statement with the office and, if requested by the owner of record, provide a copy or certificate copy to the owner. Some cases allow a signed release form on a title certificate instead. Failure to comply triggers a $500 penalty.
(a) Except as provided in subsection (b), a secured party indicated in the files of the office as having a security interest in a vessel shall deliver a termination statement to the office and, on request of the owner of record in a signed record, shall deliver a copy of the termination statement to the owner of record, by the earlier of: (1) twenty days after the secured party receives a signed demand from an owner for a termination statement and there is no obligation secured by the vessel subject to the security interest and no commitment to make an advance, incur an obligation, or otherwise give value secured by the vessel; or (2) if the vessel is consumer goods, 30 days after there is no obligation secured by the vessel and no commitment to make an advance, incur an obligation, or otherwise give value secured by the vessel. (b) If a written certificate of title has been created and delivered to a secured party, the secured party may comply with the requirements of subsection (a) by signing the release form on the certificate and delivering the certificate to the office or to the owner of record no later than the date required by subsection (a). On request of the owner of record, a secured party that delivers a written certificate with a signed release form to the office, not later than the date required by subsection (a), shall deliver a copy of the certificate showing the signed release form to the owner of record. If the certificate is lost, stolen, mutilated, destroyed, or is otherwise unavailable or illegible, the secured party shall deliver a termination statement to the office as required by subsection (a) and shall deliver to the office with the statement an application for a replacement certificate meeting the requirements of Section 33-5B-22 and the applicable fee. (c) On delivery to the office of a termination statement under subsection (a) or (b), or on delivery of a written certificate of title with a signed release form to the office or the owner of record under subsection (b), any security interest to which the statement or certificate relates ceases to be perfected. If the security interest to which the statement relates was indicated on the certificate, the office shall create a new certificate and deliver the new certificate or a record evidencing an electronic certificate pursuant to Section 33-5B-12(a). The office shall maintain in its files the date and time of delivery to the office of a termination statement or written certificate with a signed release form. (d) A secured party that fails to comply with this section is liable to the owner of record for a penalty in the amount of five hundred dollars ($500). Nothing in this subsection precludes the owner of record or another owner from recovering damages under the law of this state other than this chapter.