Selling your second-hand vehicle isn’t as easy as taking some money and turning over the required paperwork to the new owner. There are a few legalities and documents involved that can both protect you as the seller and the buyer. One of these important documents is a deed of sale (DOS). These can come in two forms the first is an open deed of sale, while the other is a closed deed of sale. What the deed of sale does is legally indicates that you the seller and a buyer have reached an agreement on the sale of a motor vehicle.
What’s in a deed of sale
A deed of sale will contain the following information to make sure that it best describes the vehicle being sold to the new buyer. The document should contain, the make, color, year, body type, plate number, model, and engine number. Aside from this, should also be included personal details of the sale such as the full name, marital status, address, and how much the vehicle was sold for. Moreover, the DOS should also have the details of the buyer that should include the full name address, and signatures of both parties involved.
After the car has been sold the buyer is legally required to register the MV at the Land Transportation Office (LTO) once it changes ownership. However, there’s this practice wherein the details of the buyer are left blank which is called an open deed of sale.
Why you should avoid an open deed of sale
Leaving other information blank in an open deed of sale could put you as the seller in some serious trouble. This is because, even though the DOS is a binding document between you and the buyer, the vehicle will technically remain under your ownership until the buyer decides to change the ownership of the vehicle. In this case, if your vehicle is used for any wrong purpose and the ownership of the car has not yet been changed over, this means that you could be accredited for this misdemeanor.
An example of this would be if the buyer of your vehicle has committed a traffic violation without the ownership being transferred to them, the ticket for said violation would be sent to you and not them. This leads to more confusion and more headaches for the seller as they will need to get back in contact with the buyer to settle the matter. What this means is that the seller will be responsible in case the buyer gets involved in a hit-and-run accident or similar case, not a situation you would want to be in.
With this in mind, you should settle this document as soon as possible so that the buyer will get full ownership of the vehicle immediately to help prevent any futures problems from occurring in the future.
Any advantages of an open deed of sale?
If you are willing to take the risk of not knowing what the next owner will do with your vehicle and if they transfer the ownership under their name then you can go with an open deed of sale. This makes it easier to process your transaction with the buyer go much smoother and can come especially handy if you want fast cash for your car.
So should I always go with a closed deed of sale?
It is highly recommended that you go with a closed deed of sale when you sell your vehicle to make sure you know where it is going after it has been sold. This will make sure that you the seller have only sold the vehicle to the specific buyer indicated on the document. It will ensure that no one else can claim ownership of your old vehicle aside from the person indicated. This will also sort of force the new over of your vehicle to transfer ownership under their name to fully transition it as their vehicle. Aside from this, it saves you from any other liabilities that may occur later on.
With that in mind, make sure that you always sell your vehicle with a closed deed of sale to ensure your safety and the safety of the buyer of it as well. This will not only save you from any future legalities but the time ensure that the sale goes as smoothly as possible throughout the entire exchange between buyer and seller.
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