When you sell a vehicle, the legal formalities to transfer a vehicle may take some time even after the sale and purchase transaction is completed. Until the title and registration is transferred in accordance with state laws, you still remain the owner of the car. If the car hits someone, you can be legally held liable for the accident. Therefore, a liability waiver is required to protect the seller against the risk of potential car accidents or parking traffic violations. Some states such as California require a mandatory release or waiver while the DMV processes the transfer. Even if not mandated under the state law, it is preferable to have a liability release or waiver in place. The waiver should include crucial details such as the odometer reading, vehicle identification number, and the date of sale.
Different states may have different sample release forms. To see an example notice of transfer and release of liability, visit the California DMV website.