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    butters12345's Avatar
    butters12345 Posts: 1, Reputation: 1
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    #1

    Apr 5, 2008, 07:28 PM
    Buying privately with a lien in place
    I am about to purchase a motorcycle out of province. The owner admits to having a lien on the bike with a major bank. The amount of the loan and consequential lien is $2500.00 more than the $5K asking price for the unit. What steps should be taken to ensure that if I pay the seller the asking price for the bike with a cheque made payable to both him and the lien holder, that the $2500.00 difference on the lien won't come back to bite me.

    My understanding is that until the lien is paid in full that the lien holder may repossess the bike from whomever has possession if the balance of the lien isn't paid, regardless of who paid what to whom.

    The bike is no long worth the amount of the lien therefore we will not be paying enough to cover it. The owner assures me he will pay out the balance of the lien in short order and have the bank send me a "Release of Security" within a week or two of our purchase.

    We will have possession of the bike, but will it legally be ours?

    Is there something we, as the buyer can get in writing from the seller that will legally protect us in this case?

    Any help asap will be appreciated.
    froggy7's Avatar
    froggy7 Posts: 1,801, Reputation: 242
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    #2

    Apr 5, 2008, 09:27 PM
    If I were you, I'd walk away from this deal unless the seller was willing to pay off the lien and show you the Release of Security before you buy the bike. If you don't, you run the real risk that he defaults on the loan, the bank seizes the bike to sell it, and you will be out unless you can sue him in small claims court.

    And, to be honest, I'm not sure that he can transfer the title of the bike to you without having the lien paid off. And if he doesn't transfer the title, can you get the bike registered? This is all probably going to be more trouble than it's worth.
    excon's Avatar
    excon Posts: 21,482, Reputation: 2992
    Uber Member
    		  
    #3

    Apr 6, 2008, 05:54 AM
    Hello b:

    You do the deal AT THE BANK, where your money is exchanged for a title. Do nothing less than that.

    excon
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
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    #4

    Apr 6, 2008, 11:46 AM
    Yea, pay him and he will latter pay the bank the rest.

    No, he will most liekly take the money and run, But if you are paying the money, you would make sure that you pay the bank direct but not before he has paid the rest of the balance.

    So basically you can not legally buy this bike, unless the amount you are paying is more than or equal to the bank loan.
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