August 2005
Any motor vehicle owned by a company in liquidation or a bankrupt (the insolvent) must be dealt with proactively. Vehicles are a source of potential liability and must be dealt with at an early stage. The official receiver should establish the ownership of all motor vehicles the insolvent has use of or which are kept at the insolvent's premises before taking the appropriate action.
A vehicle registration document showing the name of the insolvent is not proof of ownership only proof that the insolvent is the registered keeper of the vehicle. This is however usually a good indication of ownership. In cases of doubt additional evidence of ownership should be obtained from the insolvent and interested third parties regarding the source of the funds which paid for the vehicle or any contract under which the vehicle was purchased.
A vehicle owned by an insolvent must always be dealt with unless it is considered to be exempt property (see Part 3). If there is a possibility that a vehicle is subject to a hire purchase agreement, this can be confirmed by contacting HP Information Limited (see paragraph 31.2.9). If a vehicle is subject to any finance agreement, the guidance contained in Part 2 should be followed as quickly as possible.
31.2.3 Establishing the current keeper
Every vehicle must be registered which gives each vehicle a unique number, the registration number. The Driver and Vehicle Licensing Agency (DVLA) is provided with a vehicles details and a registration document is issued to confirm that registration has taken place.
The vehicle registration document V5C shows details of the vehicle and its current registered keeper. The registered keeper is the person who keeps the vehicle on a public road and is not necessarily the owner and this document is not proof of ownership. In the absence of the vehicle registration document the official receiver can establish the current registered keeper by submitting DVLA form VQ4 to the DVLA, Swansea SA99 1AJ, there is no fee payable for this service. A more detailed list of registered keepers of any vehicle, with copies of all transfer records, can be obtained free of charge by writing to Vehicle Record Enquiries, Vehicle Customer Services DVLA, Swansea SA99 1AJ.
31.2.4 Establishing the location of the vehicle
Details of motor vehicles owned or controlled by the insolvent must be obtained as part of the initial telephone enquiries. Vehicles are a source of potential liability and cannot be left for days or weeks while waiting for the bankrupt or a director to attend for interview. The following information should be obtained for each vehicle at an early stage in the enquiries:
exact details of the vehicle (make and model including engine size, colour, year and registration number),
its location,
the name, address and any contact telephone number for the person who holds the keys,
details of any finance agreements, and
details of any insurance cover held.
31.2.5 Determining the value of the vehicle (amended August 2008)
The official receiver must establish the value of the motor vehicle so that a decision on how to dispose of the vehicle may be made. The official receiver should refer to the online Parker's Guide, which is regularly updated, for a guide price. For vehicles prior to M registration, a specialist vehicle or vintage car it may be necessary to instruct agents to obtain a value (see Chapter 32 Agents generally).
The value of the vehicle should be ascertained in order to determine if there will be a benefit to the insolvent's estate after taking into consideration the costs of insurance and sale. Cherished/personalised registration marks will also need to be taken into account at this stage (see paragraph 31.2.5A-C). An approximate value of the vehicle will also need to be ascertained in order to effect insurance cover on the vehicle.
The value of the vehicle should not be a primary factor in considering whether the vehicle is exempt property (see paragraph 31.2.22).
31.2.5A Cherished/personalised registration marks (inserted August 2008)
A registration mark can be defined as the characters that are shown on the number plate of a vehicle. A number plate is the plate fitted to a vehicle. A registration mark is also commonly known as a registration number.
When establishing the value of the vehicle, consideration should also be given as to whether there is a value to the registration mark, which there may be if the registration mark is special or unusual. On its own a registration mark is not an item of property and the owner of the vehicle does not have legal title to it. Instead the owner of the vehicle purchases the assignment right to the particular mark from DVLA. The sale involves a legally binding contract between the Secretary of State and the purchaser for an agreed price. The purchaser is granted the right to assign the mark to a vehicle registered in his/her name, or that of his/her nominee where applicable, within a 12-month period. The assignment right is granted to the purchaser alone and the right cannot be transferred to anyone else. Any nominee has no rights to the mark.
Once the cherished/personalised registration mark is assigned to a motor vehicle it remains with the vehicle. The registered keeper of the vehicle has limited entitlement to the registration mark and, before a sale or transfer of the vehicle, can in most circumstances apply to transfer or retain the mark.
From 1 October 2001 motorcycles/mopeds are also able to hold a cherished/personalised registration mark.
31.2.5B Cherished/personalised registration marks and implications for official receiver (inserted August 2008)
As a registration mark is assigned to a vehicle, not the registered keeper the official receiver will need to consider the registration mark’s value at the same time as dealing with the vehicle it is registered on. When a vehicle is sold or otherwise disposed of, entitlement to the registration mark will automatically pass to the new keeper unless it is dealt with beforehand. This means that if a vehicle is exempted without first dealing with the registration mark, then any value the registration mark has will be lost to the estate. See also paragraphs 31.2.25A and 31.2.33 to 31.2.38B for more information on exempting vehicles and realising the value of cherished/personalised marks.
31.2.5C Valuing a cherished/personalised registration mark (inserted August 2008)
An initial value may be established for the registration mark by either asking the official receiver’s agents for a valuation, or by contacting a number of specialist agents who can be found on the Internet. There is also a trade association which has set certain standards of trading for dealers of registered numbers, the Cherished Number Dealers Association. A list of members who may be able to provide a free valuation of the registration mark can be found on their website: www.cnda.co.uk/.../members.html
Where a motor vehicle is an asset of the insolvent's estate it is important to establish the position with regard to insurance on the vehicle. If the vehicle is already insured, the official receiver should ask to see the certificate of insurance to confirm that the cover is both adequate and up to date. Where the certificate is not available, the broker/insurer should be asked to confirm that the cover exists and is sufficient for the vehicle in question. The insurers should be notified of the insolvency.
Where there is no insurance on the vehicle arrangements should be made for it to be insured. The insurance should be effected using the official receivers arrangements with Willis Limited (see Chapter 49 Insurance).
All motor vehicles must have a valid road tax disk or a Statutory Off Road Notification (SORN) declaration in respect of the vehicle must be made to the DVLA. This is a declaration that the vehicle will not be used or kept on public roads. Official Receivers should be aware of SORN and establish that any vehicle belonging to the insolvent is taxed or that the SORN declaration has been completed.
The DVLA carry out a monthly check on untaxed vehicles and will issue an automatic penalty of £80 where the vehicle is untaxed and no SORN has been submitted. Persistent offenders may be prosecuted and be fined up to £1000. Making a false SORN declaration when the vehicle is being used or kept on a public road can result in a fine of £5000 and two years imprisonment.
31.2.8 Official receivers staff not to drive vehicles
In no circumstances should a member of the official receiver’s staff drive an insolvent's vehicle. Where it is essential to move a vehicle to safeguard it, agents should be instructed as a matter of urgency.
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