35Encumbrance

35 Encumbrance

(1)  In this section –

encumbrance means a security interest, within the meaning of the Personal Property Securities Act 2009 of the Commonwealth as in force from time to time, in relation to a motor vehicle;

motor vehicles securities register means the register within the meaning of the Personal Property Securities Act 2009 of the Commonwealth as in force from time to time.

(2)  Before a licensed motor vehicle trader purchases a motor vehicle, accepts a motor vehicle for sale or exchange on consignment or accepts a motor vehicle on a trade-in basis, the licensed motor vehicle trader must –

(a) ask the vendor or owner of, or the person exchanging, the motor vehicle whether the motor vehicle is subject to any encumbrance; and

(b) search the motor vehicles securities register to determine whether there is an encumbrance registered in respect of the motor vehicle.

Penalty:  In the case of –

(a) a body corporate, a fine not exceeding 400 penalty units; or

(b) an individual, a fine not exceeding 100 penalty units.

(3)  If a licensed motor vehicle trader is informed, or becomes aware, that a motor vehicle is subject to an encumbrance, the licensed motor vehicle trader –

(a) must discharge the encumbrance on purchasing the motor vehicle or accepting the motor vehicle on a trade-in basis or exchange; and

(b) must not accept the motor vehicle for sale or exchange on consignment unless it is a condition of the consignment that the proceeds of the sale or exchange are paid first in discharge of the encumbrance.

Penalty:  In the case of –

(a) a body corporate, a fine not exceeding 1 000 penalty units; or

(b) an individual, a fine not exceeding 200 penalty units.