The answer to the question, “Who keeps the bill of sale?” is that both the buyer and the seller should get a copy for their records.
This document proves that a sale took place and helps protect both sides if any issues come up later. So, it doesn’t matter if you are buying a used car or selling equipment; having a signed bill of sale on hand can save you a lot of trouble.
In this guide, we will explain why a bill of sale matters, who needs it, and how long you should keep it. We will also provide tips on how to store and create one with the help of PDF.net.
Key Takeaways
- A bill of sale proves that a transaction took place and protects both the buyer and seller.
- This document complements a title but does not replace it; each serves a different legal purpose.
- Both parties should keep a copy of the bill of sale for their records to protect themselves in case of any future disputes or prove ownership, as well as for tax or registration purposes.
- Retention time varies depending on the type of item, legal requirements, and potential future needs.
- The best practices to store physical copies of your bills of sale safely are to keep them in secure places and digitize them for added backup.
Understanding the Bill of Sale: More Than Just a Receipt
A bill of sale is a legal record that confirms a transfer of ownership between a seller and a buyer.
This document outlines what was sold, when, to whom, and for how much, and it can apply to almost any personal property transaction.
When it comes to the person who is responsible for the bill of sale, it’s typically the seller who provides the document since they are the ones transferring ownership. However, the buyer can also initiate it if the seller has not prepared one.
What Constitutes a Legal Bill of Sale?
A legal bill of sale should include the names and contact details of both parties, a description of the item being sold, the purchase price, the date of the transaction, and the signatures.
Most states need both parties to sign, and some (including Maryland, Montana, Louisiana, Nebraska, New Hampshire, and West Virginia) also require a notary’s signature. So, to make sure you don’t miss anything, always check the state-specific requirements.
Depending on the item sold, your bill of sale may require additional information as well. For example, a bill of sale for a vehicle will also include a vehicle identification number, registration number, engine serial number, etc.
Many bills of sale also include an “as-is” clause, which means the item is sold without any guarantees. If a warranty is offered, it should be clearly stated; including these details helps prevent misunderstandings or future disputes.
When it comes to what a bill of sale vs. a title is, the two are not interchangeable, but they often go hand in hand. A title is a state-issued document that proves legal ownership and transfers it in the eyes of the government. A bill of sale, on the other hand, acts as a supporting record of the transfer itself.
When a Bill of Sale Is Legally Required vs. Recommended
In many states, a bill of sale is legally required for transactions that include automobiles (the most common ones), collectibles, artwork, furniture, equipment, livestock, and real estate.
Some states (e.g., New York, Indiana, and Washington) provide a downloadable form through the Department of Motor Vehicles (DMV), while others do not. If your state offers one, use it to ensure all the necessary information is included.
Lesser-value transactions usually don’t need a bill of sale, so books or clothes can probably go without one. Still, creating it anyway is a good idea, as it helps prevent any confusion about ownership later on. Besides that, it can also show compliance with local laws and be useful for tax purposes.
The Legal Weight of Your Bill of Sale
If a dispute arises over who owns the item, when it was sold, or for how much, a bill of sale can serve as written proof of the transaction. Courts often accept it as supporting evidence in small claims cases, especially when other records are missing.
It can also help parties resolve issues related to insurance, registration, or tax reporting. For instance, if a vehicle was sold but the title transfer was delayed, the bill of sale can confirm when the buyer took possession.
In addition, it protects sellers from liability after the sale. If the item causes damage or becomes involved in a legal issue, the seller can use the bill of sale to show they are no longer responsible.
Who Should Keep the Original Bill of Sale?
If you’re wondering who keeps the bill of sale—the buyer or seller—when the transaction is complete, the answer is both. Let’s see why:
Bill of Sale as the Buyer’s Essential Proof of Ownership
Why is a bill of sale important for buyers? It is simple; it shows that they have acquired the item legally, and this is especially important when the item is of high value and has to be registered. Therefore, if there are ever questions about ownership, a bill of sale can be considered clear proof.
It is also useful when buyers need to prepare for a resale or sort out their taxes; essentially, it is a record of purchase, which may be required in the future for various purposes.
Bill of Sale as the Seller’s Protection Against Future Liability
Sellers need a copy of the bill of sale, too, because it includes the information about the time when the item was sold and confirms that they no longer possess the item. If it is damaged or misused later on, the bill of sale protects the seller from being held responsible. For instance, with a vehicle bill of sale, the seller will not have to worry about tickets or claims, even if there are any issues with the title later on.
When Both Parties Should Retain Original Documents
It is always best if both parties have a signed bill of sale. If not, one party can scan it, convert it to a PDF file, and share the digital version with the other party.
If the buyer and seller have access to the original document, they can rest assured their rights are protected and that there’s a layer of security in case anything comes up.
Document Retention Periods: How Long to Keep Your Bill of Sale
Besides knowing who keeps the bill of sale, you need to know how long to keep it. Unfortunately, there is no single answer, as this depends on the type of item sold and whether there are other legal considerations tied to it.
Vehicle and Watercraft Transactions
For vehicles like a motorbike, car, trailer, or boat, it is a good idea to keep the bill of sale for as long as you are in possession of the item. If you are the seller, at least 4–5 years will suffice, as it covers the typical period for issues like unpaid fines or registration errors.
Nevertheless, for peace of mind, you can hold onto the bill of sale permanently to prove you are no longer the legal owner if any issues arise.
Personal Property and Equipment
You can keep the bill of sale for things like electronics, tools, and appliances for 1–3 years. Additionally, if you have a warranty for the item, don’t get rid of the bill of sale until that period passes. For more expensive equipment, such as that used for business, a bill of sale will be helpful for tax and insurance purposes, so you should keep it a bit longer.
Real Estate and Land
The bill of sale is typically used in conjunction with the deed and title in real estate transactions to document the transfer of included items, such as furniture. Therefore, it is best to save the bill of sale indefinitely, as it may come in handy if there are tax claims or legal disputes about what came with the property.
Best Practices for Storing Bills of Sale
After creating and signing a bill of sale, it is important to keep it safe. Let’s see how you can do so:
Physical Document Storage Solutions
If you prefer paper copies, store your bill of sale in a secure place, like a filing cabinet or fire-resistant box. Don’t forget to label your folders by year or item type to stay organized, and make duplicates in case the original gets lost or damaged.
Digital Backup Strategies for Important Papers
A smart way to create a reliable backup is to scan and digitize your paper records, including your bills of sale. Once you do this, you can store them on your computer, a USB, or a cloud platform.
An even simpler way to do it is to use PDF.net, where you can upload your bill of sale, lock it to prevent changes, and share it whenever you need. This way, tracking and organizing your documents is effortless, even if you regularly handle sales or purchases.
When to Involve Professionals in Document Management
Usually, it makes sense to seek help from a lawyer or accountant for business-related items or items with legal obligations. With large purchases, like a house or yacht, professionals can help you manage records and advise you on how long to keep them. Moreover, they may also help you draft bills of sale to meet state-specific requirements.
Create Your Bill of Sale Effortlessly With PDF.net
Wondering how to get a bill of sale? The process is simpler than you might think with PDF.net, so here are the general steps to create one yourself:
- Gather the required information. You will usually need:
- Full legal names and contact details (for both parties)
- Transaction date
- Transaction price and payment method
- Item’s description
- Terms and conditions, like “as-is clause,” warranty, etc.
- Create the document. If you don’t want to write a bill of sale from scratch, you can find a template online and convert it to a PDF with our software if it’s in Word format. Then, you can use our PDF editor tool to change the text easily. A bill of sale can also be handwritten, but a digital version is often cleaner and easier to store.
- Sign and date the document. Both the seller and buyer should sign. If you are unsure whether a bill of sale needs to be notarized, too, check your state’s requirements.
- Duplicate the document. Each party should keep a signed copy. Additionally, if you have a vehicle bill of sale, you may need another copy to submit to your local DMV upon registration.
- Store your copy. Remember to keep it in a secure place. For physical copies, consider a fireproof safe; when it comes to digital copies, you can easily encrypt your PDFs and password-protect them with our tools.
Final Thoughts
Knowing who keeps the bill of sale can be beneficial for both the buyer and seller, as each party should have a copy to stay protected when questions or issues come up later.
If you want to create, store, share, and sign your PDFs, including your bill of sale, digitally, PDF.net makes it easy. Remember, a couple of minutes to do this now can save you a lot of trouble down the line!
Who Keeps the Bill of Sale FAQ
#1. Can a bill of sale be handwritten, or must it be typed?
Yes, a bill of sale can be handwritten. However, it still needs to contain all the necessary details and both parties’ signatures. It might also be the simpler option for many, but a typed version is usually seen as more professional.
#2. What happens if I lose my bill of sale?
If you lose your bill of sale, you should try to get a copy from the other party. For those related to vehicles, you can consult your local DMV for options.
#3. Do I need to notarize my bill of sale?
You do not need to notarize your bill of sale unless your state or the type of transaction explicitly requires it. For instance, notarization is mandatory in Louisiana, Maryland, Montana, Nebraska, New Hampshire, and West Virginia.
#4. Can I use a single bill of sale for multiple items?
Yes, you can use a single bill of sale for multiple items but remember to be as specific as possible when listing each item, its price, description, etc., to avoid confusion.