Things you need to know about Deed of Sale of Vehicle.
1. What is a Deed of Sale?
A Deed of Sale is a contract where the seller delivers property to the buyer and the buyer pays the purchase price. The deed results in ownership over the property being transferred to the buyer upon its delivery.
A Deed of Sale, similar to a Contract to Sell, contains the basic terms of the sale such as purchase price, payment terms and warranties. While the deed can be used for the sale of any property it is most commonly used for (1) land; (2) houses; (3) condominium units; (3) cars; and (4) other movable property usually with a high value (i.e. jewelry).
Government agencies sometimes require a notarized Deed of Sale to process the transfer of the Certificate of Title over the property to the buyer. These are usually required by the Register of Deeds (for land) and Land Transportation Office (for cars).
2. What is the difference between a Contract to Sell and a Deed of Sale?
In a Contract to Sell the seller retains ownership over the property until the buyer fully pays the purchase price. Once the purchase price is fully paid the seller delivers the property to the buyer and transfers ownership over the same to the buyer by executing a Deed of Sale.
In a Deed of Sale the buyer acquires ownership over the property upon its delivery to him, even if the purchase price has not been fully paid. Usually the parties execute a Deed of Sale once the conditions stated in the Contract to Sell have been met, the most important being the full payment of the purchase price.
3. How can a Deed of Sale protect you?
A Deed of Sale protects both the seller and the buyer. For the buyer the deed serves as proof that he/she bought the property from the seller and has a right to the same. The buyer can also enforce any warranties contained therein if there is any defect in the product or problems with the sale in general.
For the seller the Deed of Sale is useful if the buyer refuses to pay the purchase price or violates the terms of the sale (i.e. fails to follow the agreed payment terms). The seller can demand the buyer to pay the purchase price by invoking the deed. If the buyer still refuses to pay the seller can file a complaint in court to either (a) enforce payment; or (b) cancel the sale, and claim damages from the buyer.
4. What information do you need to create the Deed of Sale?
To create your Deed of Sale you’ll need the following minimum information:
- The type of seller (i.e. individual or business) as well as name and details (i.e. nationality and address)
- The type of buyer (i.e. individual or business) as well as name and details (i.e. nationality and address)
- Brief description of the property subject of sale
- Basic terms of the sale (i.e. purchase price, payment terms, warranties)