A bonded title allows individuals to prove ownership of a vehicle when a standard title is missing, lost, or invalid. If you’re wondering what is a bonded title in Texas, it is a certificate of title issued by the Texas Department of Motor Vehicles (TxDMV), backed by a surety bond.
This process helps buyers and owners register, insure, or sell their vehicles even without the original title. The surety bond acts as a legal and financial guarantee in case of disputes.
How a Bonded Title Works in Texas
A bonded title in Texas provides the same legal rights as a regular vehicle title. However, the title is conditional. The state issues it when the applicant cannot produce sufficient proof of ownership, and the bond guarantees that the applicant is acting in good faith. Unlike a Contract Bond, which guarantees performance in construction projects, a title bond is tied only to vehicle ownership.
The bonded title remains valid for three years. During that time, if a previous owner presents valid ownership evidence, they may file a claim against the bond. The surety bond company must then pay damages if the claim is valid. After the three-year period, if no claims occur, the TxDMV allows the bondholder to apply for a standard title.
Requirements for Bonded Title in Texas
To apply for a bonded title, the applicant must meet all state eligibility conditions. The requirements include:
- Legal residency in Texas or military service in the state.
- Physical possession of the vehicle.
- Completion of the Statement of Fact for Bonded Title (Form VTR-130-SOF).
- A valid form of identification.
- Proof of ownership, such as a bill of sale, payment receipt, or copy of a check.
- A $15 administrative fee.
- Vehicle Identification Number (VIN) verification if the vehicle was registered out of state.
The Texas DMV determines the vehicle’s market value, and the applicant must obtain a surety bond for 1.5 times that amount through a licensed surety company.
When You Need a Bonded Title in Texas
The DMV only issues bonded titles when no other title options are available. You may need a bonded title if:
- You purchased a vehicle without a title and cannot contact the previous owner.
- The title was never issued for the vehicle.
- You received the vehicle as a gift without any ownership documents.
- The original title contains errors or was destroyed.
- Your name does not appear on the original title.
You should not apply for a bonded title if you can request a duplicate or corrected title directly from the TxDMV.
Who Needs a Bonded Title in Texas
People in the following situations commonly require one:
- Buyers of used vehicles sold without a valid title.
- Inheritors of vehicles without accompanying documentation.
- Individuals who cannot obtain a title transfer due to uncontactable sellers.
If your name appears in DMV records as the owner, and the title was simply lost, you likely only need a duplicate.
However, if you have incomplete records and no official title, the bonded title process may be your only option. A surety company can issue the required bond once you submit all necessary paperwork and undergo a credit check.
Steps to Get a Bonded Title
In Texas, the TxDMV outlines a specific process for bonded titles:
- Contact the DMV: Confirm that you meet eligibility criteria and that no standard title options apply to your case.
- Complete the application: Submit Form VTR-130-SOF along with supporting documents and the administrative fee.
- Wait for approval: If approved, the DMV provides instructions to secure the bond.
- Purchase the bond: Work with a licensed surety company to get a title bond equal to 1.5x your vehicle’s market value.
- Submit final documents: File the bond, proof of ownership, and vehicle inspection with your local county tax office within 30 days.
Final Considerations
Understanding what is a bonded title in Texas can help buyers, sellers, and vehicle owners protect their legal rights. The title provides a lawful path to registration and resale when standard documents are missing.
It also ensures the state and other parties can hold the applicant accountable in the case of fraud or error.
