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  1. #1
    Silver Member
    Join Date
    Jan 2004
    Posts
    156
    Location
    Webster, NY
    Tractor
    Kubota 2410

    Default Buying used? Check for liens

    One of my friends bought a 2001 Deere 4200 TLB a little over a year ago. He found it in NC listed in one of the online classified (trader) sites. They struck a deal, he wired the money and had the tractor shipped here to NY. It was what was promised and everyone was happy . . . UNTIL HE GOT THE PHONE CALL.

    Deere credit called. The seller had financed the tractor and while he took the money, he had not paid off the loan.

    What we think happened is this: My friend had some work done at the local deere dealer. They registered the tractor on their system, when the seller quit making payments they came looking here. Told him they would be happy to let him keep the tractor if he paid the $20,000 balance on the loan.

    Lessons for buyers of used tractors: 1. since they have no title on which liens would be recorded, finance companies frequently file UCC liens. You need to do a lien search in both the local county and state capital to make sure there are no liens on the equipment. 2. run the serial number by the dealer.

    In this case the second point would not have been helpful, but the first might have revealed the lien. I say might because the UCC system in many states is weak and not set up for consumer use. In our state a search of the state UCC filings often takes 10 days and costs about $40. The county search is hit and miss, because you can't be sure which county the seller resided in when he bought the machine.

    It's another thing to keep in mind when making the decision to go new or used.

  2. #2

    Default Re: Buying used? Check for liens

    I think it's great that you have pointed this unknown out to us all. It's not something I would have thought of at all. I feel sorry for that guy and can understand that he wouldn't have know either. John

  3. #3
    Platinum Member
    Join Date
    Mar 2003
    Posts
    780
    Location
    Finger Lakes Region, NY
    Tractor
    Kubota BX1800

    Default Re: Buying used? Check for liens

    JD,

    Here in NY you can search online for free at NY UCC Search

    Sorry to hear about your friends mis-fortune. Hopefully he can somehow recoup his money.

  4. #4

    Join Date
    Aug 2001
    Posts
    472
    Location
    Central NY
    Tractor
    Kubota B7500HSD

    Default Re: Buying used? Check for liens

    Generally, the Bill Of Sale will (should) have a clause stating that the item is free and clear of all liens and encrumbrances.

    If the seller's going to lie, then he will obviously still sign the Bill Of Sale with the clause, but at least it will give you a leg up on going after him or having the authorities prosecute him.


  5. #5
    Super Member Inspector507's Avatar
    Join Date
    Mar 2002
    Posts
    5,803
    Location
    Central Ohio

    Default Re: Buying used? Check for liens

    Here's Ohios UCC search page

  6. #6
    Gold Member
    Join Date
    Dec 2001
    Posts
    290
    Location
    Virginia, Eastern Shore
    Tractor
    JD 4300

    Default Re: Buying used? Check for liens

    A legal lesson: your friend may be a BFP. that is a Bonified Purchaser if he gave full value to the seller for the tractor. Your friend can obtain valid title against Deere. he needs to talk to a local attorney if he has not done so already.

  7. #7
    Epic Contributor Soundguy's Avatar
    Join Date
    Mar 2002
    Posts
    47,902
    Location
    Central florida
    Tractor
    ym1700, NH7610S, Ford 8N, 2N, NAA, 660, 850 x2, 541, 950, 941D, 951, 2000, 3000, 4000, 4600, 5000, 740, IH 'C' 'H', CUB, John Deere 'B', allis 'G', case VAC

    Default Re: Buying used? Check for liens

    I saw somehting similar to this happen a while back.

    Our company sold a tractor to a fellow beginning to farm.. he got a ag loan from the farm bureau... Seems he then sold the tractor and split.. not paying the loan off. The farm bureau sent out an investigator to talk to us about it to see if we knew anything about him.. etc.

    Soundguy

  8. #8
    Gold Member uhmgawa's Avatar
    Join Date
    May 2003
    Posts
    283
    Location
    New Hampshire
    Tractor
    Kubota L48TLB

    Default Re: Buying used? Check for liens

    </font><font color="blue" class="small">( Deere credit called. The seller had financed the tractor and while he took the money, he had not paid off the loan.)</font>

    Something seems missing here. Financing agreements typically require
    the seller of a financed machine to pay off the outstanding balance on the
    original loan after the sale has commenced. Assuming Deere does as
    well it's beef should be with the original rather than the current owner.

    Then again Deere may not want to volunteer any information on the
    chance it may be able to extract some compensation from the current
    owner.

  9. #9
    Platinum Member
    Join Date
    Jul 2003
    Posts
    560
    Location
    Baldwinsville, NY (10 miles NW of Syracuse)
    Tractor
    JD 4310, ehydro, 4WD, R4s

    Default Re: Buying used? Check for liens

    <font color="blue"> Something seems missing here. Financing agreements typically require
    the seller of a financed machine to pay off the outstanding balance on the
    original loan after the sale has commenced. Assuming Deere does as
    well it's beef should be with the original rather than the current owner.
    </font>

    Deere's beef is not with the current owner. They have secured the loan with a lien on the tractor. The original owner defaulted on the loan. Deere is exercising their legal right to repo the tractor. It does not matter what financial transaction the orginal owner made with the "current" owner. If there is a shortfall in paying off the loan after Deere sells the tractor or other repro costs, Deere will go after the original owner. The "current" owner is out what ever he paid and must go after the seller to recover his loss.

    Jeff

  10. #10
    Platinum Member
    Join Date
    Feb 2002
    Posts
    908
    Location
    SE Ohio, Meigs County
    Tractor
    Kubota L3010HST R4's, Scag Wildcat ZTR, 61

    Default Re: Buying used? Check for liens

    I'm curious. How did this situation end up? Did Deere repo it and the buyer lost out all together?
    Thanks for the heads up!
    Moon of Ohio

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