Bill of Sale and Receipt

Purpose
There are several purposes of the Bill of Sale form. First, it provides a written record of what was sold. Second, it is a written record of the name and address of the buyer. Third, it releases the facility owner from liability from any alleged seller warranties, allegations that the property was stolen, etc. Additionally, it is a written record of the exact amount of money received for the property in the particular unit being sold, and it serves as a reminder to collect sales tax.

There are many reasons why it is helpful to have the name of the buyer and the unit number documented. For example, if the tenant calls you and says that his unit contained personal items like scrapbooks, at your discretion you may call the buyer and ask the buyer if he is willing to contact the tenant, sell or give the personal items back to the tenant, etc.

When to Use
You should execute this form for every unit that you sell at a Chapter 59 foreclosure sale. This would include using it for vehicles and other items that use the “special” foreclosure procedures –in these instances it is still important in all cases to have a record of the buyer and the record of the sales price (even though tax need not be collected when selling a vehicle).

Tips for Use
Keep a copy of the executed Bill of Sale in the respective tenant’s file, and ideally keep that file for at least four years. Four years is the statute of limitations for a breach of contract. Especially if a tenant’s unit had unusual activity such as a foreclosure or eviction, it is recommended that you keep all correspondence from that file for four years. If a tenant comes to you after his unit has been sold and asks for the contact information of the buyer, that is a policy decision for you, and most operators decline to give that information, but most facilities will contact the buyer themselves and ask the buyer if he is willing to give or sell back certain items to the tenant. Most facilities will give the buyer the tenant’s telephone number for the buyer to use at his discretion.

In the auction rules that you hand out before every auction, include a rule that states that buyers will be issued a Bill of Sale, and all buyers take the property “as is,” subject to any rights of lienholders or third party owners.