Sale by owner during suspension; rights of conditional vendors, mortgagees, and lessors.

(1)(a) If an owner’s registration has been suspended hereunder, it shall be unlawful for him or her to transfer such registration or to have registered in any other name the motor vehicle in respect of which such registration was issued until the department is satisfied that such transfer of registration is proposed in good faith and not for the purpose or with the effect of defeating the purpose of this chapter; provided, however, that any owner within the purview of this section may file an application for permission to transfer such registration, which application shall be accompanied by an affidavit of good faith showing that such transfer is not with the intent of defeating the purpose of this chapter. The department, within 10 days subsequent to suspension of the owner’s registration, upon request shall furnish proper application and affidavit forms to each such owner along with the notice of suspension, and the owner shall have 15 days from receipt thereof to file such application, which application shall be either approved or rejected by the department within 30 days from the filing thereof.

(b) In addition to the penalties otherwise provided for violation of this section the department may suspend the registration of any vehicle transferred contrary to the provisions of this section.

(2) Nothing in this section or elsewhere in this chapter contained shall affect the rights of any conditional vendor, chattel mortgagee or lessor or any successor in interest of a motor vehicle registered in the name of another as owner who becomes subject to the provisions of this section; and in the event of the repossession or foreclosure of a motor vehicle by such conditional vendor, chattel mortgagee, or lessor, or any successor in interest, pursuant to the exercise of rights to such repossession under the terms of the lien instrument or contract involved, by operation of law or through legal proceedings, the lienholder or lessor repossessor shall have the right to have delivered to it the registration plates which shall have been surrendered.