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More and more news articles are being published on a daily basis about how car buyers (and sellers) are encountering legal problems when selling their cars. This is normally a result of the buyer and seller not agreeing about certain aspects – which could have prevented a legal mess in the first place.
Some of the legal matters normally forgotten (or maybe embellished) about include: the condition of the car; the signing of transfer forms; and, the payment of the purchase price.
Most sellers will be aware of the condition of the car they are selling and will normally know the problems with car (or defects) and as such and should a seller fail to tell a buyer about a problem (which the seller is aware of), the buyer may be able to sue the seller for the costs to fix the problem.
Also, a seller can also be sued to pay for problems with the car which the seller did not know about (these are called latent defects).
However all is not lost, a properly drafted agreement can limit the above (or do away with it all together.
I know a good few people who have not followed the regarding notifying the authorities about selling a car and started receiving traffic fines because the buyer did not transfer the car yet. Also, I have assisted clients who bought a car and delayed in transferring the car and when the buyer finally tries to transfer the car, the buyer discovers that the seller has passed on, or has been declared insolvent and cannot transfer the car as technically it belongs to the seller still.
Sellers and buyers can avoid similar situations by following the proper procedures and transferring the car as soon as possible.
Fortunately for a seller, the seller needs to complete, sign and submit an NCO form to the authorities. Once the authorities receive the NCO form, the authorities should record that the car is no longer by the seller and that the buyer is the new owner.
A buyer on the other hand will need to obtain a roadworthy certificate and complete, sign and submit an ALV form to the authorities together with a number of documents such as (in the case of a natural person): the buyer’s ID (certified); the buyer’s proof of residence; and, the car license certificate (the seller must give this to the buyer).
Once the buyer submits the ALV form and supporting documents, the authorities should issue the buyer with a new car license certificate.
This is an important aspect that should never be over looked. Normally, the payment method (such as lump-sum or installments) is agreed to verbally and this leads to problems – especially if you have to sue.
It is highly recommended that the purchase price should be paid at the same time as the car is handed over – as it happens that the buyer will promise to pay by installments only to never be seen again.
A seller and buyer do not need to sign a written agreement to seller a car, however almost every attorney will recommend that all agreements should be recorded in writing (even if its an email or a Whatsapp message) – this will really make it easier for an attorney to assist a buyer or a seller in the event of a dispute.
I have prepared a simple written agreement which you are free to use at your own risk. I highly recommend that you seek to an attorney and get a written agreement that has been prepared to suit your unique requirements.
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