Chances are that you have purchased a second-hand car, bike, entertainment unit or high-end stereo, standard Bermuda second-hand buys.

Most people, when purchasing a second-hand vehicle, assume that checking the mileage, having a mechanic inspect the vehicle, confirming that the identification documents of the seller match the name on the vehicle registration, and taking a car for a successful test drive are adequate steps to take.

But beware — you may be being scammed! The aforementioned checks will not ensure that you are getting good title to the vehicle.

There is one very important check that must be conducted before signing on the dotted line and that is a check at the Registry General.

Yes, this is the same place where mortgages against houses are registered.

If the seller of the vehicle obtained it with the help of a mortgage (secured loan) from a lender (bank or private individual), then most likely the lender will have registered its interest in the vehicle with the Registrar General.

The searchable document at the Registrar General's office will list the names of the lender (mortgager), the seller in the transaction (mortgagee), the date of the mortgage, the description of the property mortgaged, and the sum secured.

It is important to conduct a search at the Registrar General prior to making your purchase, because if you do not and the seller fails to settle his debt with the lender with the proceeds from the sale, the lender can lawfully take the vehicle from you.

While this may seem unfair, once the lender has registered its interest in the vehicle with the Registrar General and sets out the details noted above, you as the purchaser of the mortgaged item are deemed to have notice of the lender's ownership interest in the vehicle even if you never conducted a check.

This will leave you without the vehicle, without the cash you paid for the vehicle and with recourse to sue a seller who probably has spent the money you gave him; or worse, left the island. In any event it can be an extremely costly lesson.

Mortgages against any property situate in Bermuda may be registered.

Registrations can be made in respect of real or immovable property (e.g. land and houses) and personal or moveable property (e.g. cars, bikes, boats, shares of a local company).

If there is a mortgage registered against the item that you wish to purchase, the seller does not (and you won't either) have good title until this debt has been paid.

If the seller breaches the terms of the agreement with the lender, then the lender will have the right to the asset and if such asset is in your possession, the lender will unquestionably repossess the asset and you will have no recourse against the lender in this situation.

If you are buying a vehicle or other asset from a third party with financing from a bank, you will not likely be affected by a dishonest seller as your lending bank will perform all checks and ensure that the seller has good 'marketable title' to the asset before it lends you the money, especially if it intends to take security in the asset.

So if you plan to make a substantial purchase of a second-hand item, especially a vehicle, without the assistance of a loan from a bank, do not do so before you check the office of the Registrar General.

The Registrar General's office is located on the second floor of the Government Administration Building on Parliament Street.

The mortgage register can be checked for a fee of $14.00, or a public officer can check for you, for a fee of $27.00.

If you discover that the item that you intend to purchase is mortgaged, in order to ensure that you receive good title to the asset being purchased, you need to join the lender in the transaction and ensure that all sums owing to the lender are first paid out of the proceeds with the remainder going to the seller.

If you are desirous of purchasing a second-hand item from a seller but he refuses to allow you time to search the mortgage register, then the deal in question may be too good to be true and you should simply walk away on the premise that "it's better to be safe than sorry".

Attorney Janita Burke is a member of the Insurance Team within the Corporate and Commercial Practice Group at Appleby.

A copy of Ms. Burke's column can be obtained on the Appleby website at www.applebyglobal.com.

This column should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.