Hire Purchase Loan

vivera01

I am the executor of my dad's estate.

He ran a business and had a van on hire purchase from a local company.

The loan was not in arrears, however, the garage signed the log-book over to his son for the value of the final loan payment and did not ask for proof of death nor did they ask for confirmation of who the executor is.

Have they acted inappropriately? Surely this is not only morally wrong but also illegal? I am thinking of reporting them to the FSA because if this is a legal practice, I can see a great business opportunity dragging myself round all the garages and buying up other people's cars for a very small fee.

lawrie28

So have they signed it over to your brother?
When you say Logbook do you mean V5?
If so the V5 is just the registered keeper, it does not mean the legal owner is the name on the V5.
What was the final payment?
WHo has the van?
Where the garage aware of the death and did they know his son?
If so then they may not have needed to see the death cert to know that the death is correct.
However, who administered the loan, as I have not heard of a garage lending their own money, it would be done through a broker.

The legal ownership of the vehicle could only be passed with some kind of sales, which would require documentation.
If this was to be down, it would have to be by the legal owner of the van, so in this case that would be the estate of the deceased, so the executor would need to draw up the invoice. If this was not done, then the estate still legally owns the vehicle. If you where to pursue this, then the son would not have any paperwork to prove ownership, you could even report him as Taking a Vehicle Without the Owners Consent (TWOC).
What about insurance on the vehicle?
Was the business a LTD company or a sole trader?

vivera01

He has a receipt from the garage who also have their own finance arm. The van remained the property of the finance company until the loan was paid in full. Payments of £9,000 were made by my dad's business and one payment remained of £240.00 until it was paid in full after which my dad would have been given the option to purchase it for a small transfer fee. He died without having the chance to do this. My brother exploited it.

I had it but refused to hand it over because believe he obtained it by deceit. It's now in the hands of the police after he reported me for theft. The police are refusing to give it back to him until they investigate why he felt he was entitled to it. 3 years ago, he was in partnership with my dad but that was disolved in April 2008. He's acting on the basis he still has partnership rights.

This is a small town where everyone knows everyone else and took what he said at face value.

I paid the insurance up to the point the police impounded it. They're driving 600 miles to interview me next week.

chanz4

sounds like legal advice not forums

lawrie28

IS it worth losing the relationship of your brother for a £10k, thats now worth £5k?

What does the will say re the business?

vivera01

There isn't a relationship - never was after he tormented and stole from my dad until the day he died. He's toxic.

My question is more about whether a HP loan can be settled by any random person and they acquire ownership regardless of the fact they have no relationship whatsoever with the person who took out the loan which isn't in arrears.

CH27

What has the solicitor dealing with your Dad's Estate said?

vivera01

My solicitor says I'm in the right. Because he has a receipt from the garage, I have to proove it. His solicitor says he's in the right and has acted "with the upmost decorum". That'll be the first.

lawrie28

Your brother will need to prove title, and you need to get a copy of the receipt from the garage that he has and see what it says.

Out of interest, what kind of arrangement was the finance? was this a HP agreement or some kind of Finance lease?

And this is the really important bit. With a Finance Lease, the lessor does not own the vehicle, and it is not theirs to sell. It always is own by the leasing company. A finance lease is set up to be more tax efficient. Was your Dad paying VAT on his payments?

If so then then at the end of the agreement, it should move in to secondary period rentals, which is usually one monthly payment made per year for use of the asset. When the vehicle is sold, then a percentage of the sale proceeds goes to the leasing company (1-10% usually) whilst the lessee keeps the rest. The lessee can't just buy the vehicle outright because of Tax laws. So what smaller leasing companies will do is to arrange for the vehicle to be sold to a third party company and then sold back to the origional lessee so that there are no problems with the ownership and tax laws.

It is possible this has happened, which will cause you a whole heap of problems.
If I am right, and it is a finance lease, this is how your brother did it.

Firstly, he went to the garage, who may well think that he is still connected to your Dads business, or he talked them into believing he was.

They then arranged for the leasing company, who own the van, to sell it to the garage. Say the van was sold for £1000 (for ease of numbers), and the leasing companies %age was 5%. The leasing company would need to be sent £50 (+vat on all figures), and the garage give your brother £950 and the garage own the van. Then the garage invoice and sell the van to your brother for £1200 (cos they need a little profit to cover the admin) and the van is now legally your brothers.
He has bought it from the garage, who bought it from the origional owners of the vehicle, which is the finance company.

The problem here is that your Brother has committed Fraud, by pretending to the garage that he has some connection to either you Dads company or the Estate.

If this is the case, as far as I see it, you have 2 choices. You report it to the police and your brother gets charged with Fraud, which give hima criminal record etc. Or you tell him what you have, and he signs the van over to you and you don't report him.

The second choice is probably a lot less stress for everyone involved, and quicker to resolve.

Of course if it was a straight HP agreement, then I just typed all this for nought!

vivera01

It was a HP lease and yes, belonged to the finance company until settled by the garage then sold on. He did pretend to be connected to my dad's business and they didn't think to challenge it, or ask for a death certificate etc. The police are coming to interview me on the 9th August to get my side of the story. They believe me but need me to give them paper evidence, which I have. It's not about the value of the vehicle but if I don't stop him now, he'll move onto something else. He's already taken the phone number and told the local papers that the business name belongs to him. He's moving onto my dad's personal assets too and placed a caveat on his will to prevent me selling the house. Nightmare.

lawrie28

Good luck!

How much was the amount that he "bought" the vehicle for and was it anywhere near its actual value? If it wasn't then the finance company have an interest as they have been ripped off some money too, and you need to keep in touch with them as your brother fraudulantly pretened to have the right to organise the sale of the vehicle on behalf of the finance company, so if it is all unwound the finance company still own the van.

How has he managed to get the phone number? has he committed fraud there too? Sounds daft but the phone number of the business has a very good value as it is the number that the business has been built around and advertised fr years. If he has done something naughty there too, then this fraud could be much larger as the estate may have been able to sell on the business assets for a much higher value. This is worth investigating too.