FFL/legal question
Recently read an article in Shooting Sports Retailer about financing.
The suggestion was, taking a down payment, with contract that buyer
pays so much a month. Upon down payment, transfer the gun into buyer's name but hold it until contract is fulfilled and payment complete. The reason for this is, say a pending AWB, etc. where buyer would be able to obtain said banned gun because it's already transfered. Question is: what if the buyer defaults the contract? Yes FFL still has the gun + down payment, but the buyer is owner on ATF 4473 and state ROS if a handgun. How would the FFL legally retain ownership.
The suggestion was, taking a down payment, with contract that buyer
pays so much a month. Upon down payment, transfer the gun into buyer's name but hold it until contract is fulfilled and payment complete. The reason for this is, say a pending AWB, etc. where buyer would be able to obtain said banned gun because it's already transfered. Question is: what if the buyer defaults the contract? Yes FFL still has the gun + down payment, but the buyer is owner on ATF 4473 and state ROS if a handgun. How would the FFL legally retain ownership.
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i would speculate that the ffl has a clause in the contract that deals with default but how and who will honor it is kind of an up in the air question 0 -
You are misguided if you think that once the customer fills out the 4473 and is approved that he now has title to the firearm. The gun(s) on the approved 4473 remain the property of the FFL dealer until such time as lines 33-36 are completed and the dealer signs away his interest in the firearm. In states which have a waiting period it may in fact be a week or more between approval and delivery and nothing crosses the counter without the dealer (or his agent) signing and dating the 4473. If the buyer cannot take delivery as agreed to then the 4473 is canceled, but the dealer still needs to sign lines 33-35. State firearms agencies will have a similar procedure to void/invalidate or rescind over the counter transactions. Whether or not the customer gets his money refunded at all or what percentage is refunded is a civil matter between the dealer and the customer and should have been agreed to before the transaction even got started. Most dealers (myself included) will refund no more than 80% of the money put down on a cancelled transaction due the the customer being unable to take physical delivery of the firearm. In CA once approved for transfer the customer has a maximum of 30 days to take delivery of his firearm from the dealer. On day 31 the entire approval process must begin again, which includes a fresh background check and new set of fees. 0 -
most of the shops i visit/ or know the owners have a layaway..you pay in the time specified and then you fill the 4473 at the time of transfer..never heard of the paperwork before payment is done..when i get a customer that wants time to pay ..4473 gets done at time of transfer/to new owner 0 -
(mark christian Posted - 07/13/2010 : 10:01:21 PM The gun(s) on the approved 4473 remain the property of the FFL dealer until such time as lines 33-36 are completed and the dealer signs away his interest in the firearm.)
I think this answers my question.
This is PA, no waiting period, PIC's check.0 -
The dealer signs away his interest in the firearm(s) on the approved 4473 the day that the guns are released to the customer and not on the day that the customer is approved. It remains my gun until the time comes that I decide to release it and not before because teh dealer is the final check in the delivery system to the end consumer. Someone may pass the background check with flying colors on Monday but when they return to pay off the balance due and take delivery on Tuesday and appear to be under the influence of drugs or alcohol I am not releasing the firearm to them. The fact that I was given money makes no difference in my determination of whether or not I release the gun if I feel the customer is a threat; to me, himself or to the public. Threaten legal action? Go for it, the dealers on the spot assessment of the customers state of mind will stand up in any court.
"Mr. Jones stormed into my shop reeking of booze and shouting that he was here for his S&W and that he wanted it ASAP because he had a score to settle with some guys back at the apartment".
That of course is quite extreme and while it never happened in my shop, an incident just like that one did occur at the gun shop I used to work in many years ago when a customer returned for his pistol after the CA waiting period had passed.0 -
Legalities aside, the business plan for such a scheme is idiotic. The purpose of being in a retail business is to sell your merchandise & get paid for it, not tie up huge amounts of your money INDEFINITELY in inventory that you can't sell.
It reminds of when I used to invest in the stock market, & my strategy was BUY HIGH and SELL LOW; that didn't work well, either.
Neal
Come on Neal, if I had your money I'd burn mine.0 -
Spotty B.
Go back to GB's page one (home), notice the black band across the top.
Click on 'For Buyers' in the black band..scroll down. Then..
You will notice an escrow service avialable. Don't know if GB is sanctioning it, but it's there on GB nonetheless.
Contact them, and see what procedure they use. Best, Joe0
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