Seller Beware!

Scales of JusticeI have friends who sold a car and months later they received information that the car was in an impound lot. The purchaser had failed to register the car in his name and since the car was still registered to them they were legally liable. Seller beware!

How does one insure that the new owner re-registers the vehicle?

seller beware sign

Seller Beware!

This is an area of civil law that I am not familiar with, so I asked Hammerco for legal advice. This is what was related to me:

In my opinion the registered owner would bear responsibility to the towing/storage company. The seller would then have to chase after the buyer for indemnification. This may seem harsh, but the reason that we have a system of registration is to ensure that liabilities and responsibilities are clearly designated.

It is the vendor's responsibility to ensure that registration is changed as much as it is the buyer's. If I was giving advice to the seller I'd be telling them not to pay the account and have the matter addressed in court, so that the purchaser could be brought in by 3rd party proceedings to place responsibility where it ought lie.

ICBC's Advice

In Steps for the Seller, ICBC advises:

To complete the transfer, take the registration and Transfer/Tax Form to an Autoplan broker. We strongly recommend going together with the buyer to ensure that the registration transfer is processed in a timely manner and that your name and any insurance and licence products are removed from the vehicle registration record. This is important in avoiding any possible liability claims associated with the future operation of the vehicle by the purchaser. If you cannot visit the Autoplan broker with the buyer, keep the seller's copy (with original signatures from both you and the seller) for your records.

APV9T Transfer Document

Form APV9T, the Transfer/Tax document is critical to protect yourself. Complete it fully and if you don't wish to follow ICBC's advice above, have the buyer show photo ID. Insure the ID matches the form and keep the seller's copy of the form for your records.

I have been presented with little more than a vehicle description and a signature on a document that contained all copies during a traffic stop. This usually ended up in trouble for the buyer, but it also shows that the seller did not know the risks involved.

Failing to Complete the Transfer

The purchaser is then required by the Motor Vehicle Act to present the form and register the vehicle within 10 days of the transfer. Many do not and the vehicle may be resold a number of times before it is registered again. No doubt this is done to avoid paying sales tax.

Follow Up on Completion

ICBC will tell you if the vehicle you sold is no longer registered in your name once it has been re-registered if you check with them.

If this does not happen within a reasonable time, you may wish to lodge a complaint with police and report the transfer to Consumer Taxation to force the buyer's hand.

Of course, this would assume that you have kept a copy of the transfer form, that the form was completely filled out at the time of sale and you have taken steps to insure the identity of the buyer.

Share This Article

Our firm just represented a client in a similar situation; however his matter was a bit more severe. He was on the hook for a lot of money because of the actions of someone else.

The client had sold his vehicle to a friend (former friend now) who was to have the vehicle emission tested, safety inspected, transfer of ownership, and properly insured. His friend assured him he would take care of all those things in a day or two after the purchase.

Our client gave the vehicle to his friend with his plates still on it. Going on the word of his friend our client went ahead and canceled his insurance coverage 2 days later.

The purchaser completed none of the obligation and continued to drive the vehicle and got into a accident being 100% at fault.

Legally our client still owned the vehicle as no transfer of title had been executed. Our client became vicariously responsible for the accident and the actions of the purchaser since our client legally owed the vehicle at the time of the accident. Also just our client's luck the person his friend hit had been in a much more severe accident the year before and was going to be filing a personal injury suit. She filed the suit against all parties including our client.

Our client's purchaser filed bankruptcy and fled from Canada putting our client on the hook for well over $100k because that's what the injury claim was seeking. We settled the case for a lower amount, now our client actually owes us more than the settlement amount.

Our client can legally seek all his expenses (settlement and legal cost) from his friend. However, what are you going to do when the other party has no assets and/or is nowhere to be found?

Our client learned an expensive lesson, which could easily have been far worse and expensive if someone had suffered even more severe injuries or death. Also if our client had litigated the matter he would have lost and been responsible for the other parties’ costs on top of the claim they were seeking.

All this could have easily been avoided if our had been a bit more diligent and actually made sure the transfer was actually executed. The fact that our client had a written agreement with his friend which said that the vehicle was being sold was and the buyer is responsible for emission, safety inspection, transfer of ownership and insurance was not enough to get him off the hook as the full legal requirements for transferring the vehicle were not completed.

In a complicated case such as our client's the legal cost start to run through the roof real fast, and you would be personally liable for all the costs because the vehicle was not insured at the time of the incident. Because logically why would you continue to insure a vehicle which you think you no longer own. Also each party to the litigation will attempt to shift the blame on the other parties to limit liability on themselves. This turns the case into a major mess.

So next time you sell a vehicle ALWAYS ALWAYS ALWAYS make sure the transfer is complete.

Vicarious liability is applicable to the beneficial owner of a vehicle, not the registered owner.   The lawyer's client is clearly not the beneficial owner given the story that is told.  

And that ladies and gentlemen is where the problem lies. It doesn’t require the seller to transfer the vehicle. Also many times, the seller, trying to be nice will sign the transfer form, and not have it completely filled in “I’ll let you fill in the sale amount, you can put what you want”. Also they will not fill in the date, they’ll enter the vehicle info and just sign and hand over. Police stopping someone driving that vehicle won’t have any evidence of when the actual sale took place since the sale date isn’t filled in. (when I stopped a vehicle who’s driver produced an undated APV9T and verbally claimed they bought it “a week ago”, in the least, I’d then have them write that date on the APV9T so at least that would put an end to them being able to claim “just a week ago” month in and mouth out.

The smart seller will complete the entire form, retain their copy AND also complete a written bill of sale. Nothing complicated “I , sell to for on , signed by both the seller and the buyer”. If one wants to be really careful have a third party, witness the signing.

When the police, or tow yard or whomever come calling, the seller has proof of the sale, end of story.

Accompanying someone to an Autoplan agent’s office sounds like a great idea. But the seller has to have the money for the transfer, money for the sales tax, etc. It’s not something that the buy and seller often can agree to do.

I doubt ICBC would “confirm” the transfer of a vehicle for a former owner. If you’ve done all the paper work properly and had a bill of sale signed you’ve got nothing to worry about anyway.

Accompanying someone to an Autoplan agent’s office sounds like a great idea. But the seller has to have the money for the transfer, money for the sales tax, etc. It’s not something that the buy and seller often can agree to do.

The buyer always pays the transfer fees and taxes. If the buyer doesn't have the money to pay transfer or the sales tax they aren't a "buyer" in my book. They may owe a debt to ICBC and wouldn't even be able to get the registration transferred, that's why you always witness the transfer at the Autoplan office and be done with it.

Also, watch out for the Autoplan agents making buyers sign the "tear-off" part of a new registration immediately after the transfer, they do it because there's a signature space, they don't always realise that the new owner would only sign that field when the car is resold in the future, because anybody could transfer the car by presenting the signed tear-off portion of the regie with a transfer form, so having it signed and present in your car 24/7 is a bad move.