What is a bill
When properly completed, a bill of sale is a document defining
a transaction between two or more parties. It transfers ownership
defined on the bill of sale, from the seller to the buyer.
It demonstrates to third parties that the holder has right
possession and ownership.
How does it work?
With ownership and/or possession of an item of property one
has privileges and responsibilities. A properly administered
bill of sale transfers these rights and responsibilities from
the buyer to the seller. These transferred rights relate only
to possession and ownership. Other documentation relative to
the property may be required of the seller and/or buyer to
satisfy third party requirements. Like DMV or lending institutions
an automobile title registered with DMV may require additional
document processing. This title transfer removes the seller
as responsible party from the DMV records and places the
buyer as the responsible party.
Example: an item financed by a lending institution may have
a lien against the title for the balance of the loan amount.
A lien release must be executed by the lending institution
or they maintain the lien against the property. Once the loan
is paid in full the lien is released and title is free for
transfer to the buyer.
A bill of sale may be important in addition to signing over
of a title or deed. The bill of sale allows the buyer and seller
to commit to writing any terms of the sale.
Example: The bill of sale may include a clause stating
condition of the specified property. Possibly "As is". Possibly
warrantied for 30 days. And etc.
When do I need a bill of sale?
To be safe one should execute a bill of sale for any "significant"
sale or purchase.
A bill of sale protects the buyer regarding their right of
ownership and/or possession. The bill of sale tells the world
that the buyer has right to the property.
A bill of sale protects the seller via termination
of the inherent responsibilities that go along with ownership
possession. Once any additional documentation processes relative
to the specified property have been completed, the seller as
an example could terminate insurance coverage on said property.
Best for both parties.
It is in the best interest of both parties to execute a valid
bill of sale for all "significant' transactions. Protect yourself.
Get a bill of sale.