§ 40-3-52 — Perfection of second or subsequent security interests

(a) If the owner of a motor vehicle desires to place a second or subsequent security interest against the vehicle and the certificate of title on that vehicle is being held by a security interest holder or lienholder, the owner shall, on the form prescribed by the commissioner, execute a title application and a notice of the second or subsequent security interest; and the holder of the second or subsequent security interest shall forward such notice and title application, together with a fee as provided by Code Section 40-3-38 , by certified mail or statutory overnight delivery, return receipt requested, to the first holder of a security interest or lien who has custody of the certificate of title. The notice of such second or subsequent security interest shall contain on its face instructions to the security interest holder or lienholder having custody of the certificate of title directing such custodial security interest holder or lienholder within ten days to forward the notice, title application, and fee, together with the certificate of title, to the commissioner or the commissioner's duly authorized county tag agent in order that the commissioner or authorized county tag agent may issue a new certificate of title and reflect on the certificate of title the subsequent security interest. The first security interest holder or lienholder having possession of the certificate of title shall comply with the instructions contained in the notice. The commissioner or authorized county tag agent, upon receipt of a properly executed application notice, the fee, and the original certificate of title, shall enter the subsequent security interest on such commissioner's or authorized county tag agent's records and shall issue a new certificate of title and shall then deliver the certificate of title as provided for in this chapter. (b) If the holder of the second or subsequent security interest forwards by registered or certified mail or statutory overnight delivery the title application, notice of the second or subsequent security interest, and fee to the first security interest holder or lienholder who has custody of the certificate of title within ten days of the execution of that second or subsequent security interest, it shall be perfected as of the date it was executed; otherwise, as of the date the notice was forwarded to the first security interest holder or lienholder holding the certificate of title. The second or subsequent security interest holder shall retain the return registered or certified mail or statutory overnight delivery receipt as proof of perfection of his security interest under this Code section. (c) In the event the first security interest holder or lienholder holding the certificate of the title fails, refuses, or neglects to forward the title application, notice, fee, and original certificate of title to the commissioner or the commissioner's duly authorized county tag agent as required by this Code section, the holder of the second or subsequent security interest may, on a form prescribed by the commissioner, make direct application to the commissioner or authorized county tag agent. Such direct application to the commissioner or authorized county tag agent shall have attached to it the return registered or certified mail or statutory overnight delivery receipt showing the previous mailing of the title application, fee, and notice to the first security interest holder or lienholder. Upon receipt of such a direct application, the commissioner or authorized county tag agent shall order the first security interest holder or lienholder having custody of the certificate of title to forward the certificate of title to the commissioner or the authorized county tag agent for the purpose of having the second or subsequent security interest entered and a new certificate of title issued. If after a direct application of the commissioner or authorized county tag agent and the order of the commissioner or authorized county tag agent the first security interest holder or lienholder continues to fail, refuse, or neglect to forward the certificate of title as provided in this Code section, the commissioner or authorized county tag agent may cancel the outstanding certificate of title and issue a new certificate of title reflecting all security interests and liens, including the second or subsequent security interest, and this new certificate of title shall be delivered as provided for in this chapter. (d) As an alternative to mailing notices concerning a second or subsequent security interest to the commissioner or the commissioner's duly authorized county tag agent in accordance with this Code section, the commissioner shall be authorized to permit the transaction to be made by electronic means in accordance with regulations promulgated by the commissioner. (e) No first security interest holder or lienholder having possession of the certificate of title shall have the validity of that security interest or lien affected by surrendering the certificate of title as provided for by this Code section.