Chapter 8, Section M:
Transfer of Equity/Lien

Revised August 13, 2008


A "transfer of equity" is an inter-party agreement between:

  • the registered owner of a vehicle or vessel;
  • the person who will take over loan payments; and
  • a financial (lending) institution, the lienholder.

The purpose of a transfer of equity is to allow title to a vehicle or vessel to be transferred to a new owner subject to an existing loan, with the agreement of the lender.

The “Change of Equity Certification” form (MVD-10044) is generally used in lieu of both the Bill of Sale and Release of Lien. Because the lienholder is a party to the transaction, a separate release of lien is not required.

If, however, there is consideration paid for the vehicle or vessel over and above the buyer's agreement to take responsibility for the unpaid lien balance, a bill of sale is required and must reflect the correct total amount paid (i.e. the unpaid balance plus the amount of additional consideration).
 

Excise tax

  • If there is no additional consideration paid over and above the unpaid lien balance, excise tax is due from the buyer based on the amount of the assumed unpaid lien balance.
     
  • If there is additional consideration paid over and above the unpaid lien balance, excise tax is due on the total amount paid (i.e. the unpaid balance plus the amount of additional consideration).