Driving a car to get to and from a certain place in Metro Manila is considered by many as the most comfortable means of transportation. The reason for this is that the Philippines' urban jungle lacks a decent and reliable public mass transport system. As such, Filipinos living and/or working within Metro Manila tend to buy a brand-new or a used car just to be able to arrive at work on time. With that in mind, if you prefer to purchase a used car, you should then be aware of the term 'Deed of Sale.' The said term is a legal document that every buyer and seller of used cars should know because a deed of sale can save you a lot of headache when things go out of hand. Here are the things you should know about the deed of sale.
The deed of sale is a legal document that proves and records the sale of a vehicle. Specifically, it serves as proof that both the buyer and the seller have reached an agreement of sale or purchase. With this, the deed of sale protects both the buyer and the seller should disagreements or problems arise in the future. 
The deed of sale is drafted by the seller and it includes the details of the transaction. The document should then be notarized by a lawyer, otherwise, it will have no power when presented to authorities or court. As a result, it will defeat the main purpose of the deed of sale, which is to protect both the buyer and the seller.
The deed of sale should have the details of the motor vehicle such as the Make, Color, Body Type, Plate Number, Model, and Engine Number. It should also have the personal details of the seller, which includes the Full Name, Marital Status, Address, and the Exact Amount of the Vehicle sold. In addition, the deed of sale should include the details of the buyer such as the full name and address. Once furnished, the deed of sale should then be signed by both the seller and the buyer. As a whole, the contents of the deed of sale should indicate exact details of the transaction--think of it as a detailed summary report of the transaction.
Legally speaking, buyers should register the motor vehicle at the Land Transportation Office (LTO) once it changes ownership. The reason for this is that the deed of sale is only a document that proves that the transaction has been made and agreed by both parties. The deed of sale doesn't transfer ownership. As such, the buyer should register and change the ownership of the car. The seller should also be aware that the vehicle's new owner will transfer the ownership name. This is to prevent further hassles should the car be involved in an accident.
The Registered Owner Rule in the Philippines states that the person registered on the certificate of registration can be held liable should the driver of the vehicle get involved in an accident. The owner that's registered on the certificate of registration could be held liable for the actions of the driver of the vehicle. This is why transfer of ownership should be completed to prevent further hassles should the situation arise. On the other hand, the deed of sale will also be the protection of the seller to prove that the car was sold to a new owner. With that, you should always remember not to sell your car with an open deed of sale--it's for your own protection.
Overall, you should be a smart buyer when you're considering to purchase a used car, and be aware of the red flags or warning signs. Never proceed with the transaction if the seller doesn't have a notarized deed of sale. You should also not engage further if the seller can't provide or show you the car's official receipt (OR) and certificate of registration (CR). Don't rush; you'll eventually find the right car for you.
Whether you're buying or selling a used car, the deed of sale is going to be an important document in your transaction. If you're the seller, take care in drafting your deed of sale so that everything is in its proper order before handing it over to the buyer for signing. Draft it with the help of a legal professional if you have to.
If you're the buyer, make sure the information is complete, and check for accuracy. Likewise, make sure you understand the each term and condition before you sign on the dotted line. That way, you'll feel more confident with your purchase, and you'll enjoy your newly-bought car even more.
Updated on June 25, 2020 by Wilbert Tan
Tips and Tricks for First Time Car Owners
Home for the Holidays: Top 5 Tips for Better Child Safety in Cars
Copyright © Carmudi 2014-2025. All Rights Reserved.
