txsanchez

<doh> Need help again!
Did a stupid newbie NONO
Bought a salon
Did a ton of homework
Even had a clause in the sale contract statings liens would be free and clear on equipment
Received past due notice at salon for old owners....with MY beds used as collateral when they owned the salon.
They never paid off the loan after I bought the business!
NOW WHAT?
They even had the business under an LLC
the lady at the bank is nice, and has actually been to the salon
:) don't think I'm not offering her free tans rights now!!
They basically have the right to call the loan due and come get the beds...if they want!
WHAT DO I DO NOW?

engfant

That's not a stupid nubie anything. THat's called FRAUD by the previous owner. They were supposed to pay off the leins on the beds with the money you paid em and they didn't AND you have a contract with them saying this is the case.

unity

Yup. And even still, the beds are YOUR property now. The prior owners will have to provide alternative collateral. Once you have the bill of sale, the bank will have A LOT of work cut out for them.

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OMG! I made a post! :)

Gidget

I dont want to be the bearer of bad news but according to the law you cannot sell something that doesn't belong to you, so even if you have a contract with the old owner saying equipement is free and clear of any liens, this portion of the contract is not valid.

Better act fast and get in contact with the previous owner because the loan company will have every rights to come and get their property.

My advice for future buyer is to do a research to make sure that anything they buy is clear. As Engfant said, it is fraud and you could sue them for this if you want.

Robert K

In the future put the Monies in Escrow until they show that the leins have been satisfied. Go after the old owners...it is fraud.

DB Hottie

An attorney.
Get going, much sympathy and good luck.

txsanchez

Thanks for all the posts. I have an appointment with an attorney this week.
Not sure what I will get out of them, but I can sue for breach of contract or fraud. He is going to review it further when we meet. I am also working with the bank, so hopefully they will be kind and not want the cost of moving and storing all the beds. At least the Expo is coming up...anyone have any good sales on new beds :)

HOT STUFF

So not true. The beds didn't belong to the past owners, they belong to the bank. Until they are paid off and you can show that you have no liens against the equipment, the bank owns the equipment.

No different than selling a car that you haven't paid off, the bank still owns the car. They can come and get it whenever they want.

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unity

Must depend on how the loan is written and secured. I have been through this twice, once with me and once with a family member. Unless its a difference in state laws? For example, in my state we have our car titles in hand, the bank never holds them.

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OMG! I made a post! :)

Gidget

Doesnt matter which states, its all the same all over North America. Unless its fully paid, nothing belongs to you unless it was bought on credit.