Buying a motorcycle with lien | GTAMotorcycle.com

Buying a motorcycle with lien

moarmoto

moarmoto

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I have a bike that I really want to get about 3 hours away from me.
I went over to take a look at his place. Everything seemed to be in working order, and price is reasonable compared to other bikes in GTA.


The only thing is that the seller has a lien on it.


I've done some research online and just want to get some ideas for safest way to do it. On GTAM, latest thread I found was back in 2012.


The process I'm thinking:
(1) Sign UVIP
(2) Sign ownership transfer (green paper)
(3) Sign a separate Bill of Sale that I drafted to acknowledge that the seller will be paying off the loan within 5 days. Else, the vehicle sale will be nullified.
(4) Drive to the bank with him
(5) Give cash to him for deposit into his account (his account is Scotia, but lender is National Bank, and no National Bank branch around)
(6) Have him call up the lender and confirm that the amount owed is taken out of his account. I'll be listening on the call while it's on speaker phone.
(7) Head over to Service Ontario and get a "T" sticker after arranging insurance.
(8 ) Ride home
(9) Get safety done around my place.
(10) Go to Service Ontario and get it registered under my name


Is there anything I'm missing?
Few things I'm not clear on:
- Supposedly the lender is supposed to process it within 30 days and can do it online. Has anyone dealt with National Bank?
- By the time UVIP is printed off, it'll have lien on it, but I'm reading that MTO might advise you not to make purchase, but won't stop you from registering the bike. Some articles say that I can't register with lien on it.
- How will I know that the lien is cleared (I heard of PPSR, but is it one-time check or can I check against the VIN multiple times - ie. is fee per search or per VIN)?

Thanks for your wisdom in advance, GTAM.
 
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You'll know that the lien is paid when you're at the bank and he hands the teller the cash. To cover your own ***, get your eyes on the actual loan paperwork yourself. Make sure the money is going to the right place to pay off the debt, you know?

As for when it gets cleared on the MTO paperwork? It could be as long as never. My bike had a 'lien' on it 3 years after paying off. We're talking government bureaucracy here.
 
mmmnaked said:
As for when it gets cleared on the MTO paperwork? It could be as long as never. My bike had a 'lien' on it 3 years after paying off. We're talking government bureaucracy here.
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From the MTO website(http://www.mto.gov.on.ca/english/dandv/vehicle/used.shtml#liens):

  • The lender must register a clearance within 30 days
  • If the lender has not registered a clearance, you can write a notice to the lender requiring them to pay you - $500 and any damages resulting from not clearing the debt
  • The Ministry of Government and Consumer Services, Personal Property Security Branch removes a clearance registration within 60 days

Follow up with the lender. Maybe there's $500 in it for you if they haven't registered the clearance.
 
GateKeeper said:
Have you contacted National Bank and asked how and when the lien will be removed ? once paid, or how to pay it off, when can you get a paper copy of paid off lien.

Seems the biggest question is about the lien, I would suggest to start with the bank and ask them

.
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Good idea. Will do that.

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How much is the lien? Is it possible to give him the extra and you directly pay off the lien? I don't know if this is possible, but you would think the bank would be happy getting their money regardless of the source.

If I wanted to sell something with a lien on it, I would pull a separate loan and clear the lien then sell it as clear title. It is just simpler for all involved. Too much sketchiness with outstanding liens.
 
3 hours is a fair distance to go for a bike. Is it really that special? Or can you not wait until a similar, closer deal comes along without the potential headache of dealing with a lien?
Personally I wouldn't even look at a vehicle with a lien on it.

One screw up on some database somewhere (Bank, MTO, etc.) and you'll find your precious toy being repossessed!
 
+1 I'd never buy anything with a lien on it. If you must, go to a Nat. Bank with the cash to pay of the lien. Don't leave it up to the seller. Even if the sale is canceled, good luck getting cash back from the seller...the bank didn't have luck at that point....think you can do better?
 
GreyGhost said:
How much is the lien? Is it possible to give him the extra and you directly pay off the lien? I don't know if this is possible, but you would think the bank would be happy getting their money regardless of the source.

If I wanted to sell something with a lien on it, I would pull a separate loan and clear the lien then sell it as clear title. It is just simpler for all involved. Too much sketchiness with outstanding liens.
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2k lien on 4k sale price. I'm going to have a chat with the seller.

I too, would pay off the loan if it were me but I guess sometime people might not have extra funds.

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kruzuki said:
3 hours is a fair distance to go for a bike. Is it really that special?
Click to expand...

Well, it's not 'special' in a sense but it's got the right mods for the right price with the right colour.

I kept missing out on similar deals on the same model bike in the last couple months, so I might be getting a bit emotional.

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I would not buy it unless I went to the bank with the seller and had the loan paid off in front of me. Have him meet you at a National Bank office. If he is unwilling no sale! Before he pays it make sure you have a bill of sale and the ownership signed over to you when you give him the $ for the bike at the bank at which time the loan gets paid off in front of you and you get a copy of the receipt proving the loan is paid in full in case the lien is not taken off the MTO side.
 
Update after chatting with the seller:

Seller called the lender and the lender advised that we follow this process.

1) buyer gets 2 certified cheques, 1 to the lender, then the other to the seller
2) hand over the cheques, sign needed papers, etc.

I think that sounds good.

The only worst case scenario would be if he doesn't send the cheque to the lender but what would he gain from that right?

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I suppose I could. There shouldn't be any restrictions on who sends it in. Banks love getting money

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moarmoto said:
I suppose I could. There shouldn't be any restrictions on who sends it in. Banks love getting money

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Then how does the seller know you're doing it? Just go to the mailbox together and mail the cheque along with any paperwork and then everyone is satisfied. Plus this way you will have that cheque on your bank records as proof that the lien was paid.

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I would never buy anything with a lien against it unless, as others have suggested, I went to the bank with the seller and saw with my own eyes the cash change hand to clear it, and then get a copy of the receipt proving the transaction.

I sold our RV three or four years ago with a small lien left on it and I did the exact same thing for the buyer, and I totally understood his request and had no problem with it.

There's so many ways this could go wrong otherwise, and you end up screwed in the end.
 
moarmoto said:
Update after chatting with the seller:

Seller called the lender and the lender advised that we follow this process.

1) buyer gets 2 certified cheques, 1 to the lender, then the other to the seller
2) hand over the cheques, sign needed papers, etc.

I think that sounds good.

The only worst case scenario would be if he doesn't send the cheque to the lender but what would he gain from that right?

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Click to expand...

He would gain nothing and if the payments stopped would hurt his credit.

Personally I would have no issue doing it the way Iceman outlined above with both of you going to the mailbox and mailing the certified funds together. Only hiccup that could arise is getting a letter of lien release, the bank won't speak with you in regards to someone else's account so if the seller is lazy and you want that paperwork a few weeks down the road it could be a headache getting it.
 
That's a lot of faith to be putting in a system with many potential weak links, mailing a cheque.

My bank (TD Canada Trust) lost (well, mostly, it's a long story) a $30,000 cheque a few months ago that I deposited into the machine, much less dropped in a mailbox. It took me 12 hours of panic and many very terse phone calls to thankfully sort it out and recover it.

In the situation where, as camaro mentions above, something goes wrong and then the sellers finance company won't even talk to you because of privacy laws, well, it could end up in another world of hurt.

Or hell, the cheque could get lost in the mail. Again, weakest link.
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