Towing Carrier Nonconsensual Tows

Colorado law requires a towing carrier (carrier) to notify law enforcement, within 30 minutes after towing an abandoned vehicle, of the carrier's name and the storage location and description of the vehicle. The act clarifies that the carrier is deemed to have complied if:

• The carrier gave the location of the storage facility to law enforcement when obtaining authorization for the tow; or
• The carrier made 2 or more attempts within the 30 minutes after the tow to notify a law enforcement agency but was unsuccessful for reasons beyond the control of the carrier.

When a carrier tows a vehicle without the owner's or lienholder's consent, current law requires the carrier to notify the department of revenue (department), the owner, and the lienholder of the tow between 2 and 10 days after the tow, thus imposing a 2-day waiting period before notification. The act repeals this waiting period and instead requires notice within 10 days after the tow and caps at $75 the amount the carrier may charge for sending this notice; however, the act encourages carriers to wait 24 hours after a tow to notify the owner and lienholder of the tow. Except for the first 24 hours, daily storage fees are forbidden until the carrier has sent the required notice to the owner and lienholder.

A carrier's mechanic's lien does not attach to a vehicle for 30 days after notice was sent to the owner or lienholder of the vehicle if the carrier tows a vehicle from private property without the owner's, operator's, or lienholder's consent. If the owner or lienholder fails to retrieve the towed vehicle for 30 days, Colorado law authorizes the carrier to sell the vehicle to recover the carrier's fees. The act requires the carrier to set the sale price at the time of sale, list the fair market price at the time of sale, and report the sale price to the department within 5 business days after the sale. The law also requires the vehicle to be appraised by an independent third-party. Before the act, the balance of the money from the vehicle sale, after the carrier and law enforcement were reimbursed, was sent to the department to pay any taxes or fees. The act repeals this requirement and replaces it with a requirement that the carrier give the money to the lienholder or owner, depending on any lien. If the money is never claimed, it is sent to the unclaimed property program.

The amount of the fee that a carrier must pay to have a carrier's permit is changed from $150 to being set by the public utilities commission (PUC), and approved by the executive director of the department of regulatory agencies, to cover the cost of regulating carriers. The PUC is authorized to deny an application for a carrier permit or to refuse to renew a carrier permit when a carrier has been convicted of a towing-related offense. The PUC may deny an application or refuse to renew a permit of a towing carrier based on a determination that there is good cause to believe the issuance of or renewal of the permit is not in the public interest.

The act requires that carriers that are towing a vehicle from private property without the owner's, operator's, or lienholder's consent must:

• Display at their place of business and on any website the current maximum rates permitted by rule of the PUC for each tow service provided by the towing carrier, and the sign must include information about how to make a complaint to the PUC;
• Accept cash and major credit cards, as defined by rule of the PUC, and, upon request, disclose the accepted forms of payment;
• Not charge storage fees for a day on which the carrier did not store the vehicle;
• Before connecting to a vehicle, photographically document the vehicle's condition and the reason for the tow. Failure to produce documentation of the vehicle's condition or the reason for the tow creates a rebuttable presumption that any damages to the vehicle were caused by the carrier or that the tow was not authorized.
• Maintain an area at each storage facility with lighting adequate to inspect a vehicle for damage;
• Upon demand of the owner within 30 days after providing the owner notice that the vehicle has been towed, retrieve the contents of the towed vehicle or allow the owner to retrieve the vehicle or the contents;
• Upon the owner paying 15 percent of the fees or $60, whichever is less, and signing a form acknowledging the remainder of the debt, retrieve the towed vehicle or the contents of the towed vehicle or allow the owner to retrieve the vehicle or the contents;
• Obtain authorization from the property owner, leaseholder, or common interest community within 24 hours before towing a vehicle from private property;
• With certain exceptions, give 24 hours' written notice before removing a vehicle from a parking spot or the common areas of a condominium, cooperative, apartment, or mobile home park;
• Post adequate signs that a vehicle may be towed if parked inappropriately;
• Upon request, provide evidence of the carrier's insurance coverages;
• Have a sign at storage facilities that states the name, telephone number, and hours of operation of the carrier's business;
• Upon request, provide an itemized bill showing each charge and the rate for each fee that the person has incurred;
• Give written notice of the ability to make a complaint to the PUC;
• For a carrier to perform a nonconsensual tow, other than for an abandoned motor vehicle, from private property normally used for parking, the property owner or carrier must have provided adequate signs communicating the parking regulations that subject a vehicle to being towed; and
• Unless ordered by a peace officer, not tow a vehicle from private property because the rear license plate shows the vehicle registration is expired.

If a carrier fails to comply with the provisions of the act, the carrier may not charge or retain any fees or charges for the services performed with respect to the vehicle and must return any fees it collected with respect to the vehicle. It is an affirmative defense in any action to collect towing fees that the carrier failed to comply with these provisions. If a carrier damages a vehicle or violates these provisions in a manner that causes damages and refuses to reimburse the owner, operator, or lienholder, the owner or lienholder may recover attorney fees.

Carriers are required to record certain information about each nonconsensual tow, retain the information in their records for 3 years, and produce the records within 48 hours upon request.

A carrier is prohibited from paying money or other valuable consideration to a landowner or business for the privilege of nonconsensually towing vehicles.

It is a deceptive trade practice to violate the provisions of the act, and the attorney general is responsible for enforcement.

Upon making a finding that a towing practice harms the public interest, the PUC may promulgate rules to stop or change the practice.

The act appropriates $109,475 to the department of regulatory agencies for use by the PUC for implementation of this act and reappropriates $5,733 of the money to the department of personnel for vehicle replacement lease and purchase services.

(Note: This summary applies to this bill as enacted.)