5 Things You Need to Know about Deed of Sale
Driving a car to get to and from a certain place in Metro Manila is considered by many as the most comfortable means of transportation. The reason for this is that the Philippines’ urban jungle lacks a decent and reliable public mass transport system. As such, Filipinos living and/or working within Metro Manila tend to buy a brand-new or a used car just to be able to arrive at work on time. With that in mind, if you prefer to purchase a used car, you should then be aware of the term ‘Deed of Sale.’ The said term is a legal document that every buyer and seller of used cars should know because a deed of sale can save you a lot of headache when things go out of hand. Here are the things you should know about the deed of sale.
What is a Deed of Sale?
The deed of sale is a legal document that proves and records the sale of a vehicle. It serves as proof that both the buyer and the seller have reached an agreement of sale or purchase. With this, the deed of sale protects both the buyer and the seller should disagreements or problems arise in the future.
Who prepares the Deed of Sale?
The deed of sale is drafted by the seller and it includes the details of the transaction. The document should then be notarized by a lawyer, otherwise, it will have no power when presented to authorities or court. As a result, it will defeat the main purpose of the deed of sale, which is to protect both the buyer and the seller.
What details should be indicated in the Deed of Sale?
The deed of sale should have the details of the motor vehicle such as the Make, Color, Body Type, Plate Number, Model, and Engine Number. It should also have the personal details of the seller, which includes the Full Name, Marital Status, Address, and the Exact Amount of the Vehicle sold. In addition, the deed of sale should include the details of the buyer such as the full name and address. The deed of sale should be signed by both the seller and the buyer. As a whole, the contents of the deed of sale should indicate exact details of the transaction–think of it as a detailed summary report of the transaction.
What should buyers need to do after the transaction?
Legally speaking, buyers should register the motor vehicle at the Land Transportation Office (LTO) once it changes ownership. The reason for this is that the deed of sale is only a document that proves that the transaction has been made and agreed by both parties. The deed of sale doesn’t transfer ownership. As such, the buyer should register and change the ownership of the car. The seller should also be aware that the vehicle’s new owner will transfer the ownership name. This is to prevent further hassles should the car be involved in an accident.
Registered Owner Rule
The Registered Owner Rule in the Philippines states that the person registered on the certificate of registration can be held liable should the driver of the vehicle get involved in an accident. The owner that’s registered on the certificate of registration could be held liable for the actions of the driver of the vehicle. This is why transfer of ownership should be completed to prevent further hassles should the situation arise. On the other hand, the deed of sale will also be the protection of the seller to prove that the car was sold to a new owner. With that, you should always remember not to sell your car with an open deed of sale–it’s for your own protection.
Overall, you should be a smart buyer when you’re considering to purchase a used car. You should be aware of the red flags or warning signs when you’re buying a used car. Never proceed with the transaction if the seller doesn’t have a notarized deed of sale. You should also not engage further if the seller can’t provide or show you the car’s official receipt (OR) and certificate of registration (CR). Don’t rush; you’ll eventually find the right car for you.