What is a Bill of Sale in Ontario?

Posted on April 19, 2021

If you're looking to buy a car, or you've put yours up for sale, gone are the days when a handshake and verbal agreement was considered a sale.

One of the most important parts of the process to buy or sell a used car is to have a bill of sale, but what exactly is it?

Don't worry, you won't have to hire a lawyer or pay any expensive fees. In this article, we talk about what a bill of sale in Ontario is and what you need to do to get one.

A bill of sale is a document that records the passing of an asset from one owner to another during a sale. These documents are legal documents that are valid in court in the case of a disagreement.

It is typically the seller that will provide the bill of sale, including important information about the transaction for reference after the sale. Recording this information protects yourself and the other party.

You might be thinking, "Aren't we talking about a title?" Bill of sales and vehicle titles are different documents but are both important when passing a car from one owner to another. While a bill of sale records the details of the transaction, a title is a document that proves the ownership of the vehicle.

A title is for the new owner after they have bought the vehicle. It will record the owner's name, address, vehicle details, odometer reading, and other details so that they can prove they now own the car.

Technically, a bill of sale serves as a receipt much like you would have a receipt for an item bought at a store. Just like a store keeps a record of your transaction, the seller should also keep a copy of this bill of sale so that both parties have a record of the sale.

Even when you are gifting a car, meaning you are not receiving money for the transaction, you should still have a bill of sale. The bill of sale can explain that the transaction was a gift instead of in exchange for money. In the case of future disagreements, you will have a record that the transaction was a gift, protecting you from a case of seller's regret.

What Information Must Be Included in a Bill of Sale in Ontario?

Now that you know you need a bill of sale, you must be wondering what it actually says. There are many important details required for the document to be legally binding and useful in cases of disagreement.

Each government has its own regional requirements for the bill of sale information. In general, a bill of sale must include:

  • Name and address of both parties
  • Date of sale
  • Amount paid in the transaction
  • Guarantee that there are no claims or offsets on the item
  • Description of the item sold
  • Warranties
bill of sale image

There is also a space for signatures on the document. Depending on the region, either the buyer or both parties will need to sign the document. Sometimes, it even needs to be notarized, but this is not the case in Ontario.

Ontario specifically requires that the motor vehicle bill of sale includes:

  • VIN (Vehicle Identification Number)
  • The year and make, as well as the power source
  • Body type, colour, and model
  • Purchase price
  • Current owner's information and signature
  • Contact information and signature of the buyer
  • Purchase date
Bill of Sale Info Image

If you are the seller, you must also provide a Used Vehicle Information Package that includes information on debts and loans on the vehicle.

Will a Bill of Sale Hold Up in Court?

Yes, a bill of sale is legally binding and will hold up in court as long as it follows the requirements set by the government in the area the transaction occurred. In fact, it is recommended to have a bill of sale in many cases even if not required for this reason.

What Does Bill of Sale Only Mean?

In some cases, you might come across advertisements for vehicles that say "bill of sale only." You should be very careful about approaching this kind of deal. There should almost always be a title involved in the process of transferring car ownership from one party to another.

If someone is trying to sell you a car without transferring a title, you should ask why there is no title. In many cases, the vehicle could be stolen, or the sale is a scam. In other cases, the vehicle could have been abandoned due to disrepair.

Can a Bill of Sale Be Handwritten?

So if you don't need a lawyer, is a bill of sale informal? A vehicle bill of sale, surprisingly enough, doesn't even need to be typed. In Ontario, a bill of sale can be handwritten and still hold up in court.

Oftentimes, vehicles are sold from one person to another instead of from a dealership. You don't need fancy forms to have a bill of sale. As long as the document includes all the important information required by the government, it can be typed or handwritten.

Make sure the handwriting is legible though. The last thing you want is to be arguing over what something says on your document.

What Else Besides Vehicles Requires a Bill of Sale in Ontario?

Selling a car isn't the only reason to have a bill of sale. In fact, a bill of sale document is a good idea to have when you buy or sell any item of value. 

Certain items are required by governments to have a bill of sale document included in the sales process, while others are only recommended. The buying and selling of vehicles require a bill of sale, while the sales of clothing do not.

Here is a list of items that Ontario requires have a bill of sale:

  • Trucks
  • Motorcycles
  • Recreational Vehicles
  • Trailers
  • ATVs
  • Snowmobiles
  • Boats
  • Pets
  • Personal property

Below are some more details on the differences among these bill of sales.

Boat Bill of Sale

A boat bill of sale document is very similar to a bill of sale for a car. You will need to include the make, model, year, owner and buyer information, date, and more. Some key things differ, though.

A boat bill of sale will also have to include a Hull identification number, the type and specifics of the boat motor, and whether it includes a trailer. Make sure you include all the required information for your area and consider downloading a template.

Trailer Bill of Sale

A trailer bill of sale is even more similar to a car bill of sale. You will need to include all the same information regarding the two parties and the details of the trailer. Make sure to include the length, width, type of trailer, and condition of the vehicle.

Personal Property Bill of Sale

A personal property bill of sale is also often called a general bill of sale. It can be for any other type of property like jewelry, furniture, tools, and equipment. These forms are more general because this type of property does not have more specific requirements by the government.

Even though there aren't requirements like for pets or cars, you will want to make sure you are thorough to protect yourself in court.

Pet Bill of Sale

Animal bill of sale website Image

A pet bill of sale can be very different from other types of bills of sales because it involves a living being. It will have the same sections for buyer and seller information, but the description of the pet will differ.

The bill of sale should include the name, breed, sex, date of birth, colour, state of health, and registration number. It should also include information about deposits if the pet is too young to leave its mother.

Where Do I Find a Bill of Sale Template?

Before you even think about getting car insurance, you should decide that you want to write a bill of sale for your transaction. You will need to make sure you follow specific guidelines and include all the required information. An easy way to create a legal bill of sale is to use a template.

There are quite a few free resources online that will help guide you in writing your bill of sale. Make sure you pick one that is specific to your region and the type of asset you are selling.

You can check some law firms or services that often provide free templates for download on their website. Some organizations and associations, like used-car dealers, will provide resources and templates for dealers to use.

Bill of Sale website image

What Is Title Jumping?

Title jumping is when you buy a vehicle without registering it in your own name. This practice is also called title floating, and it originally came about as a way to evade taxes.

Any form of title fraud is a serious crime and can result in penalties such as fines and possible jail time if you are caught. Buyers should inform themselves of the red flags for title jumping, and sellers should make sure they complete the title transfer process properly.

Congrats on Your Sale

Now that you know the proper way to create and use a bill of sale in Ontario, you can go about buying and selling assets with the peace of mind that you are legally protected. Once you have your car, though, are you insured?

Insurdinary provides top resources for all your insurance needs, whether it's for cars, property, health, and more. Use our free tool today to get quotes on car insurance in Ontario, Canada.

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