Commonwealth Consolidated Acts Commonwealth Consolidated ActsIncorrect or missing serial number
(1) A buyer or lessee, for new value, of a motor vehicle of a kind prescribed by the regulations for the purpose of this section, takes the motor vehicle free of a security interest in the motor vehicle if:
(a) the regulations provide that motor vehicles of that kind may, or must, be described by serial number; and
(b) there is a time during the period between the start of the previous day and the time of the sale or lease by reference to which a search of the register (by reference otherwise only to the serial number of the motor vehicle) would not disclose a registration that perfected the security interest; and
(c) the seller or lessor is:
(i) the person who granted the security interest; or
(ii) if the person who granted the security interest has lost the right to possess the motor vehicle, or is estopped from asserting an interest in the motor vehicle--another person who is in possession of the motor vehicle.
(2) Subsection (1) does not apply if:
(a) the secured party is in possession of the motor vehicle immediately before the time of the sale or lease; or
(b) the motor vehicle is bought at a sale held by or on behalf of an execution creditor; or
(c) the buyer or lessee holds the motor vehicle:
(i) as inventory; or
(ii) on behalf of a person who would hold the motor vehicle as inventory; or
(d) the buyer or lessee buys or leases the motor vehicle with actual or constructive knowledge of the security interest.
Taking from prescribed persons
(3) A buyer or lessee, for new value, of a motor vehicle of a kind prescribed by the regulations for the purpose of this section takes the motor vehicle free of a security interest in the motor vehicle if:
(a) the regulations provide that motor vehicles of that kind may, or must, be described by serial number; and
(b) the seller or lessor is in a class of persons prescribed by the regulations for the purposes of this subsection.
(4) Subsection (3) does not apply if:
(a) the secured party is in possession of the motor vehicle immediately before the time of the sale or lease; or
(b) the motor vehicle is bought at a sale held by or on behalf of an execution creditor; or
(c) the buyer or lessee holds the motor vehicle:
(i) as inventory; or
(ii) on behalf of a person who would hold the motor vehicle as inventory; or
(d) the buyer or lessee buys or leases the motor vehicle with actual or constructive knowledge that the sale or lease constitutes a breach of the security agreement that provides for the security interest.