California Release of Liability
Selling or otherwise transferring a vehicle in California does not immediately end the seller's connection to that vehicle in the state's records. Until the Department of Motor Vehicles receives formal notice of the transfer, the previous owner may remain associated with the vehicle for purposes of parking citations, toll violations, and other post-sale incidents. The Notice of Transfer and Release of Liability (REG 138) exists to close this gap.
Definition and Legal Basis
A Release of Liability is a formal notice, submitted using DMV Form REG 138, informing the state that a vehicle has been sold, gifted, donated, or otherwise transferred, and identifying the date on which possession changed hands. The filing requirement and its protections are established under California Vehicle Code §§5602 and 5900.
An important distinction should be noted: filing an REG 138 does not remove the seller's name from the DMV vehicle record. Per official DMV guidance, only the buyer's completed application for title transfer accomplishes that. What the REG 138 does accomplish is narrower but still significant: once properly filed and recorded, liability for parking violations, traffic citations, and civil litigation arising from operation of the vehicle after the transfer date becomes the responsibility of the new owner, and the DMV ceases mailing registration renewal notices to the former owner for that vehicle.
A Release of Liability also does not itself transfer ownership. Ownership transfer occurs through the title and registration process, which is generally the buyer's responsibility.
Circumstances Requiring Filing
A Release of Liability must be filed whenever a vehicle leaves an owner's possession, regardless of whether the transfer involved payment. This includes:
- Private-party sales
- Vehicle donations to a charitable organization
- Gifts to a family member or other individual
- Transfers arising from divorce settlements, estate administration, or business transactions
- Trade-ins, as an additional precaution even where a dealership handles related paperwork
Filing Deadline
California law requires that the REG 138 be submitted within five calendar days of the date the vehicle is sold or transferred and possession is delivered to the new owner (CVC §5900). This deadline applies regardless of the nature of the transfer.
The five-day period begins on the actual date of transfer, not the date the buyer registers the vehicle or the date payment is received. Filing may be completed as soon as the transaction is finalized, and no benefit accrues from delaying submission.
The responsibility for filing rests with the seller or former owner and does not transfer to the buyer, even where the buyer has agreed to handle related paperwork.
Filing Methods
The REG 138 may be submitted through either of the following methods:
- Online: The DMV's Internet Notice of Release of Liability (IRL) system is available at dmv.ca.gov. Filing requires the vehicle's license plate number, the last five digits of the VIN, the date of sale or transfer, and the new owner's name and address. Upon submission, the DMV provides a confirmation page, which should be retained. Per official DMV guidance, a vehicle record filed electronically is updated within one business day.
- By mail: The seller may complete either the Notice of Transfer and Release of Liability section printed on the vehicle title or a standalone REG 138 form, and mail it to the address specified on the form. Mail submissions do not generate a confirmation of receipt and are processed more slowly than electronic filings. Retaining a photocopy of the completed form is recommended.
If any required information — vehicle description, seller's or buyer's name and address, or transfer date — is missing or illegible, the DMV may be unable to update the vehicle record, which can disqualify the seller from the liability exemption.
Consequences of Failing to File
In the absence of a filed Release of Liability, the DMV record may continue to associate the previous owner with the vehicle. This can result in parking citations, toll violations, or traffic notices being directed to the former owner if the new owner delays registration or is otherwise noncompliant. In more serious circumstances, such as an accident or an abandoned vehicle, the former owner may be contacted based solely on the outdated record. Resolving such matters after the fact typically requires additional documentation and may involve disputing charges that are not properly the former owner's responsibility.
Record Retention
Sellers are advised to retain their filing confirmation or a copy of the submitted REG 138 for an extended period following the transaction, as collection notices or inquiries related to a sold vehicle may arise months or years afterward.
The Release of Liability is a statutory requirement, not a discretionary courtesy, and its five-calendar-day filing deadline is strictly construed under California Vehicle Code §5900. While the filing does not remove a seller's name from the DMV's vehicle record — a distinction frequently misunderstood — it does establish the date on which liability for the vehicle's subsequent parking violations, traffic citations, and related civil matters shifts to the new owner. Timely and accurate filing, together with retention of proof of submission, remains one of the most effective safeguards available to a California vehicle seller following a transfer of possession.