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"Berlinetta has earned a reputation for quality work." Car and Driver

“A great Ferrari garage” Ken Gross in Automobile


Dear Doug, this is Stuart Hayim, at FMLI. I was happy to see this joint marketing piece until I heard of your recent actions handling the 365. Now I am really happy. Doug, just when I thought there were no more honest folks left, you go and prove me wrong! Thank You. Gregg and Gianni just told me of your recent handling (re the 365) and I wanted you to know I am both aware and most appreciative. It is not often that 1 honors a deal, especially when they could have “copped out” and made a few bucks more for themselves.

Doug, I guess that is why you (and I hope me) have the reputation that you do. Best of all, it is honorable actions like yours that, in the long run, will make you a far “richer” person. I hope this is just the beginning of us making more money and having a good time, together. Thank you again

Stuart

Stuart Hayim
Ferrari-Maserati of Long Island
Ferrari-Maserati of Fort Lauderdale
Maserati of Manhattan
Owner

My friend, I have bought 3 amazing cars from you. I respect your integrity, honesty and loyalty to do the best in your power to provide your friends the best car, exceeding their expectations. Also was impressed the follow up that Doug did with the Daytona, and Janet's persistence to make sure all the shipments were done to my satisfaction.

I know I'm young (comparing to most of your clients), but if I ever want any car, not only a Ferrari, you are the FIRST one I will approach. An example of my trust is that please let the money stay with berlinetta, and we will adjust it to my next purchase.

I thank you (all) for the experince of knowing that there is one company that I can fully trust.

-Cheerag [Dubai, U.A.E.]

PS: my special regards to Janet. -- She's always been very nice to me.

Recommendation Letter from Ron Busuttil

“When asked, ‘ What most impressed me with the car ?’ my answer related to the fact that not only did I purchase the car, but also commissioned modifications solely by telephone.”

-Ron Busuttil, M.D., Ph.D.

"Doug, your reputation is beyond reproach. I have bought several Ferraris in my lifetime, and I know when I buy from you I am buying a car from a reputable person."

-Joe Perella

"The exhaust and engine work you did are spectacular! The car sounds completely wonderful - I can actually hear it swallowing air, and I have no doubt the bad headers were causing all kind of backpressure issues -- the increase in power is kind of breathtaking. Obviously the timing correction has a lot to do with that as well. I feel pretty sure the car runs better than it did when it was delivered new to Sonny Crockett back in 1997. And it sounds like a Ferrari again, not a landscaping truck!"

"The engine compartment is vastly improved as well, and the resurfaced console etc. looks most excellent."

"None of this was cheap, but it was all well worth it. A job really, really well done!"

-Mike Offit




© 2005- J.M. Pirrone

Berlinetta Motorsports Ltd. is an independent enterprise and is not affiliated with Ferrari S.p.A.,Ferrari North America Inc., any club, Ferrari dealer or distributor."

Ferrari Market Letter

Volume 37 Number 8 | 14 April 2012
Reprinted with permission from Roush Publications, Inc.

ISSUE ARTICLE

BEWARE - Are you the legal owner of your Ferrari(s)? - You'd better check your title!




You are the new, immensely proud owner of a 1961 Ferrari 250 SWB Spyder California. The bill of sale, car title, bank wire transaction and other paperwork are in a bank safety deposit box for safekeeping. You want to enjoy driving the car for a few months, before you send it to a facility for a 100-point, ground up restoration. Or, maybe you will borrow a license plate from another one of your Ferraris to drive it to shows and Ferrari events.

However, you are not the legal owner of this $5 million Ferrari, and may never become the legal owner of the car, according to department of motor vehicle (DMV) and state sales tax laws. And my experience has been that DMV always has the final word on this matter.

Would you ever buy land or other real estate without doing a title search of the property? Your attorney would never allow a purchase without a search. His job is to protect you. Then why would anyone spend enormous sums of money on Ferraris without protecting themselves?


I and other professionals are often questioned about whether a particular car title is legally transferable. When evaluating the legal ownership of a car, and examining a car title, department of motor vehicles laws are comparable across North America and Western Europe, and in many other countries.

For simplicity, I will use as my reference the New York State Department of Motor Vehicles. Every effort has been made to present the issues clearly and precisely. Are there exceptions to these DMV laws? Not in New York and the states that collect sales tax when a car is registered and titled. I am not knowledgeable about other taxes that may apply in other states, so please consult with the DMV offices. I have been examining automobile legal paperwork from across the world for decades. I have been asked by state DMV offices to have titles from other countries translated verbatim into English by a qualified professional, before the state will issue a legal title. I may overlook something in the following analysis of these issues, and would welcome constructive comments.

The following are several situations that I have encountered. The issue of a legally transferable title is quite simple.

***Cases 1 through 4 are all referring to the same car
***PE: Private entity, includes private car owners and brokers without a DMV
state license
***DMV: State Department of Motor Vehicles


Also, in the below scenario keep in mind...

***OWNER #1 is the one printed on title
***BUYER #1 comes along next
***BUYER #2 follows BUYER #1


CASE 1

Name & address imprinted on the existing title by the State DMV agency that issued the title
- OWNER #1 is on title

Name of the owner who paid for and is in possession of the car - is OWNER #1

Is OWNER #1 a DMV Licensed Dealer? NO, he's a PE

Is the car title legally transferable? YES

OWNER #1 can transfer his title to a BUYER #1

CASE 2

Name & address imprinted on the existing title by the State DMV agency that issued the title - is OWNER #1

Name of the buyer who paid for the car and is in possession of the car - BUYER #1

Is BUYER #1 a DMV Licensed Dealer? NO, he's a PE

Is the car title legally transferable? NO

BUYER #1 CANNOT transfer his title to BUYER #2. BUYER #1 must FIRST obtain a title from DMV in HIS name, not OWNER #1's name.

CASE 3

Name & address imprinted on the existing title by the State DMV agency that issued the title
- is OWNER #1

Name of the buyer who paid for the car and is in possession of the car - BUYER #2

Is BUYER #1 a DMV Licensed Dealer? NO, he is a PE

Is the car title legally transferable? NO

BUYER #1, CANNOT transfer his title to BUYER #2 as described in the last case. But, BUYER #1 goes ahead and sells the car to BUYER #2 anyway. On the back of the title is OWNER #1, BUYER #1 fills in the name of BUYER #2. This is illegal. BUYER #1 must first get a new title in his name. BUYER #1 can fill in the title with BUYER #2 ONLY if BUYER #1 is a DMV licensed dealer and his dealer name was filled in on the back of the OWNER #1's title.

So, if BUYER #1 sells his car to BUYER #2, BUYER #2 is NOT the legal owner of the car, even though he paid for it and the car is in his possession. OWNER #1 is still the legal owner of the car according to state DMV laws. Even if BUYER #2 was a DMV licensed dealer, he cannot transfer the title to the next (BUYER #3), because he never legally owned the car. BUYER #1 must get the title in his name by paying the sales tax. To clarify: at this point in time, Case 3, even a DMV licensed dealer cannot get involved. He cannot either transfer the title for the first owner, or for any subsequent buyers.

CASE 4

Name & address imprinted on the existing title by the State DMV agency that issued the title
- OWNER #1

Name of the buyer who paid for the car and is in possession of the car - ABC, Ltd.

Is ABC, Ltd. a DMV licensed dealer? YES

Is the car title legally transferable? YES

ABC, Ltd. can transfer the car and the title to BUYER #1 ONLY.

If, for example, OWNER #1 did not fill in the name of BUYER #1 on the back of the title (this is illegal), then BUYER #2 might:
1. Obtain a new title in his name by filling in his name on the back of the title and paying sales tax or,

2. Leave his name off the back of the title as well and "sell" the car to the next Buyer No. 3, a private entity (not legal) or,

3. "Sell" the car to a DMV licensed dealer who would resell the car (without having to pay sales tax) and obtain a new title (not legal).

Examining a car title would seem to be simple.. . . . . and yet, whether or not a title is legally transferable or can be legally transferred can be immensely complicated, even for an attorney.

Here are some other issues that crop up in transferring ownership of cars:

Estate: Sale of cars

What I see often is a car title in Owner No. 1's name. Then Owner No. 1 "assigns" (writes in the name of Buyer No. 1) the car to Buyer No. 1, who is not a DMV licensed dealer. Buyer No. 1 never gets the car registered and titled in his name by DMV because he does not want to pay the sales tax.

Buyer No. 1 sells the car to Buyer No. 2, and Buyer No. 1 "assigns" (fills in the name of Buyer No. 2) the car title to No. 2. Buyer No. 1, a private entity, does not have the legal authority to "assign" the title from Owner No. 1! The title can be re-assigned ONLY if Buyer No. 1 is a DMV licensed dealer.

Buyer No. 2 now has the car in his possession, but he is not the legal owner of the car! He may ascertain this disaster later on, or he may not. He may try to get a legally transferable car title from Buyer No. 1, who does not return his phone calls. Either scenario: Buyer No. 2 "sells" the car to Buyer No. 3.

Buyer No. 3 dies. His estate sells the car without a legally transferable title. Buyer No. 4 is promised by the estate that it will obtain a legally transferable title. This may never be provided for Buyer No. 4.

At this juncture, Owner No. 1 is technically still the legal owner of the car. Who is a DMV licensed dealer supposed to enter as the legal owner of the car when examining the paperwork? No. 2, No. 3 or No. 4? Legally, he can only enter Owner No. 1.

Actually, the DMV licensed dealer should not get involved in this car sale for this estate.

I have seen many high-priced cars sold by the estate of the deceased owner. The estate has irresistible cars. This can be where "the music stops." You may pay a premium for a car but may never become the legal owner of the car. And, therefore, you can never legally re-sell the car. You contact the estate, who can never rectify the problem. Time passes, and you may lose your opportunity for any just recompense.

A Tax Issue

I am not a CPA or a tax attorney. The following is the general scope of a possible issue:

Owner No. 1 buys a car in 1983 for $55,000 and obtains the car title, registration and license plate in his name.

Owner No. 1 sells the car in 1999 for $600,000. He leaves the title "open" when he gives it to Buyer No. 1 -- i.e. Owner No. 1 probably is asked by the private entity or new Buyer No. 1 to sign the title, but not fill in his name (Buyer No. 1) on the back of the title.

Buyer No. 1 never gets a title in his name. To get a car registered and titled by DMV, he has to pay sales tax on what he paid for the car. Buyer No. 1 sells the car in 2011 for $2 million to Buyer No. 2.

Now Buyer No. 1 must either a.) Forge a bill of sale in Owner No. 1's name, which is a crime, or, b.) Ask Owner No. 1 to provide a bill of sale for Buyer No. 2 for $2 million. That is quite a difference from what Owner No. 1 may have reported in 1999 on his annual tax return. Owner No. 1 has no incentive to assist Buyer No. 1 or Buyer No. 2.

OR, the title in the name of Owner No. 1 is passed along to several subsequent buyers.

Purchasing a pre-owned car from a dealer

A factory (any factory) dealer or an independent DMV licensed dealer accepts from a buyer payment for a consigned or pre-owned car. The dealer may own the car. He completes all of the required DMV legal paperwork and forms for the buyer.

The buyer of the car chooses not to register the car until the Spring, six months later

The buyer submits all of the dealer's legal paperwork, bill of sale, and the title to DMV for registration.

But, it turns out, that the title is not a legally transferable title. The salesman did not have enough experience, and may not have known how to examine the title.

The dealer must go back to the previous owner of the consigned vehicle and tell him to get the car title in his name. But the owner of the consigned vehicle may not be able to accomplish that, until he goes back to his prior owner. And so on.

Once the car is paid for, no one has any incentive to help the buyer.

The buyer is not the legal owner of the car until he obtains a title in his name.

Factory authorized dealerships:
new car sales

A DMV licensed new car dealer selling a new factory delivered car in New York State receives an "MSO," a "Manufacturer's Statement of Origin" or a "Certificate of Origin" from the manufacturer. The MSO serves as the car's title.

Typically, the licensed new car dealer will register the car for Owner No. 1. Sales tax is collected from Owner No. 1, registration of car and license plates are obtained, and the car title is sent to Owner No. 1 within about seven weeks by the DMV.

The back of the MSO may be made out to a DMV licensed dealer ONLY.

Maybe the car is purchased when it is winter, and the roads are loaded with sand and salt. Owner No. 1 chooses not to title the car at that time. He is given an MSO and an MV-50, a New York dealer transfer form. Owner No. 1 unless he is a DMV licensed dealer can NOT then transfer his new car to Owner No. 2 on the MSO. Owner No. 1 must obtain a new car title in HIS name from the DMV.

Private entity: car sales

I am not an attorney, and I am not knowledgeable about all laws in every state and every country. Common sense might speculate that it may be proper for an intermediary (private entity) to facilitate a sale of a car between a buyer and a seller with a legally transferable title, and the intermediary collects a "finder's fee."

Some salesmen working for factory dealerships are permitted to do private entity sales of vintage cars; these transactions may not be protected by the factory dealership or the dealership's DMV license.

In New York, only a DMV licensed dealer can and must collect the sales tax and give it to the state Department of Tax and Finance, not to DMV. In other words, if you buy a car through a private entity, you would not make out a check for the sales tax amount in the name of the private entity.

Independent dealer: used car sales

Few states issue a DMV license to a dealer at his home. Most require that the dealer be established and actively doing business in a commercial building that is zoned for retail car sales.

There is an onsite DMV inspection to make certain that the applicant is not providing just "an address." A state-issued sign must be prominently displayed on the front of the commercial building.

A DMV licensed dealer has a "resale certificate," or license from his state to resell the car without having to obtain a new title or pay the sales tax for three reasons:

1. A DMV licensed dealer is in the business of buying and selling cars, and therefore cannot wait to have a new title issued by the DMV.

2. A private entity (PE) must pay the sales tax in order to get a new title with his name on the front of the title. A dealer is not required to pay sales tax, because if he were, there would be no margin for profit and he would, therefore, not have a business.

3. A DMV licensed dealer collects (and pays) the New York sales tax when he titles the car for the new owner who is residing in New York.

In New York, a DMV licensed used car dealer has accountability. He must make precise entries into two distinct record books: a.) A "NYS DMV MV-50" book, and b.) "Motor Vehicle Book of Registry," sometimes referred to as a "police book" documenting the legal, prior owner of the car, and the immediate, current buyer.

Most DMVs periodically audit these records. This past spring, I had a randomly selected NYS sales tax and DMV audit, looking back several years. They reviewed both in-state and out-of-state DMV records, and verified the legal owners. This protects the consumer. How else can the buyer -- the "consumer" -- be protected? First, he might ask his attorney to read this article. Bring your title, or a copy of a title, and documents to your local DMV office, and ask to speak with a supervisor. Sometimes it is necessary to put the buyer's money in an attorney's escrow account until the seller can resolve the title issues to an experienced professional's satisfaction.

The title that is being held by the current owner/seller of the car must be examined. I often suggest a fully refundable deposit to the buyer if certain criteria are not met. The draft of a deposit agreement can be written and, at the very least, might state: "19__ Ferrari [model number] ___ and serial number ____ is free of all liens and encumbrances and has a legally transferable title in the name of the current owner of the car. Car and car title to be inspected..."

Some will not want to release the serial number, and for excellent reasons: private entities and dealers have been cheated out of their commissions. Probity goes both ways. So, after the inspection, the sales agreement could incorporate the above, with the serial number. The private entities might also consider releasing a serial number if the buyer's funds are in an attorney's escrow account. If a private entity or dealer has been in the Ferrari world for decades, has solid, verifiable references from industry professionals who are not brokers, and by all accounts has a golden reputation, then you can make a more informed decision.

Unfortunately, with Ferraris, the buyer often "throws all caution and good judgment to the wind."

Some potential buyers have been told: "This is a very rare, very special Ferrari. They don't grow on trees. It was very hard to find. I have another client who is ready to buy it if you want to pass. . . . What, you want to see a copy of the title? Sorry, the owner is vacationing in Venice and is not returning for 14 days. The car will be gone by then."

Or this: "I have promised the owner that I will be very discreet, to protect his privacy. Most owners of these high end Ferraris do not want to 'advertise' that they are selling their car.

And, if the potential buyer knows the name of the seller, buyers and sellers have been known to arrange their own transaction and not pay the intermediary his commission. Or, they decide how much the intermediary's commission should be. All of this grief, immense aggravation and sometimes enormous financial loss -- all for the ultimate purpose of trying to avoid payment of sales tax.

Are you the legal owner of your Ferrari(s) and other cars? You may want to get a third party, independent opinion from a licensed professional with no conflict of interest and decades of title examination experience. Email the front and back of the title, and all deposit and sales agreements.

In summary, be careful, don't be impulsive. Remember due diligence.

*Doug Pirrone attended the University of Michigan, and then worked as an engineer for Grumman Aerospace Corporation. He is the President of Berlinetta Motorcars Ltd. In New York. He was a judge for the Ferrari Club of America. His vintage Ferrari, Lamborghini and Porsche restorations have been recognized internationally, including a First in Class and a Second in Class at the Pebble Beach Concours d'Elegance.



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