BILL OF SALE

Vol. 1, No.7

A friend of mine recently purchased a second hand vehicle for $45,000.00. The previous owner of the vehicle had done only 15,000 miles with it. Hence my friend considered he had gotten a good deal. However, a month ago a person acting on behalf of one of the banks came to my friend’s home and seized the car. He was informed that there was a Bill of Sale on the car.

A bill of sale for a movable property, such as a car, is the equivalent of a mortgage for land. With a mortgage the bank provides money to buy land. You in turn give the bank title to the property as security for the money loaned. As long as the loan is unpaid the bank has the title. If any person buys the land from you, once the mortgage is registered in the Deeds and Land Registry, or the bank has the original deed, the buyer would take the land subject to the mortgage. If there is default on the loan the bank could sell the property or in some circumstances take possession of the property.

Similarly with a bill of sale. It is intended to protect the interest of those providing money to purchase vehicles and other movable property. It is also used in cases where a vehicle is used as security for a loan. As long as the loan remains unpaid the holder of the bill of sale is the legal owner of the property. The bill of sale would contain terms giving the holder of the bill of sale the right to seize the property and to sell it to recover their money.

A bill of sale has to be registered in the Registry within 7 days of being issued. Once it is properly registered a bill of sale is considered to be notice to the entire world  that the holder of the bill of sale is the legal owner of the property referred to in the bill of sale. A bill of sale must be renewed every five years.

Next time you purchase any second hand moveable property from any person in Grenada, be it a car, bus, truck or whatever; before handing over your money, ensure that proper checks are made to verify that you are getting a clean and clear title. It is not sufficient to check the Licencing Department in Inland Revenue to see whose name is listed as owner of the vehicle. The information in the Licencing Department is for tax purposes. Check the Registry to ascertain that what you are purchasing is not owned by a financial institution or some other entity.

As to what my friend can do about his predicament: he can seek to recover his money by suing the person he bought the vehicle from for breach of contract.

This article is for general information purposes only. Its contents do not constitute legal advice. Before you act on any matter in this article, seek advice from an attorney-at-law.

Joseph Ewart Layne is the CEO of JEL Professional Solutions. He is a graduate of Hugh Wooding Law School, holding the LEC with Merit; he holds a LLB (Honours) and a LLM (with Merit) (Corporate & Commercial Law) from London University and a LLM (Legislative Drafting) from UWI, St. Augustine. He also holds a BSc. (First Class Honours) in Applied Accounting from Oxford Brookes University and is an ACCA Affiliate.