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By law a dealer can only repossess a car purchased on hire purchase after 3 months of non payment or default and not before.
The dealer is required to give you a minimum of 6 weeks to settle the outstanding balance before they can sell the repossessed vehicle.
Introduction
In addressing the question regarding the repossession of a car purchased on hire purchase in Kenya, it is essential to refer to the Hire Purchase Act, Cap 507 of the Laws of Kenya. This Act provides the legal framework governing hire purchase agreements, including the rights and obligations of both the buyer (hirer) and the seller (owner). The Act outlines specific provisions regarding the repossession of goods under a hire purchase agreement due to non-payment or default by the hirer.
Table of Contents
Legal Framework Governing Hire Purchase Agreements
Conditions for Repossession of Goods
2.1 Three Months of Non-Payment or Default
2.2 Notice Requirement Before Repossession
Procedure After Repossession
3.1 Minimum Period Before Sale of Repossessed Vehicle
3.2 Rights of the Hirer After Repossession
Conclusion
1. Legal Framework Governing Hire Purchase Agreements
The primary source of law governing hire purchase agreements in Kenya is the Hire Purchase Act, Cap 507. This Act sets out the rights and obligations of the parties involved in a hire purchase agreement, including provisions related to the repossession of goods.
2. Conditions for Repossession of Goods
2.1 Three Months of Non-Payment or Default
Section 9 of the Hire Purchase Act stipulates the conditions under which an owner may repossess goods from a hirer. According to the Act, if a hirer defaults in the payment of any installment and the default continues for a period of not less than thirty days, the owner may take steps to repossess the goods. However, the Act does not explicitly state a three-month period as a precondition for repossession. The specific terms of the hire purchase agreement may detail the conditions under which repossession can occur, provided they are not in contradiction with the Act.
2.2 Notice Requirement Before Repossession
Section 10 of the Hire Purchase Act requires the owner to serve a notice on the hirer before repossessing the goods. This notice must specify the breach of the agreement and state that if the breach is not remedied within fourteen days, the owner intends to repossess the goods. This provision ensures that the hirer is given an opportunity to rectify the breach before repossession occurs.
3. Procedure After Repossession
3.1 Minimum Period Before Sale of Repossessed Vehicle
The Hire Purchase Act does not explicitly provide a minimum period of six weeks for the hirer to settle the outstanding balance before the owner can sell the repossessed vehicle. However, Section 12 of the Hire Purchase Act outlines the procedure to be followed after repossession, including the owner's obligation to serve a notice to the hirer indicating the intention to sell the goods if the amounts due are not paid. The Act requires that such notice be served not less than twenty-one days before the sale of the repossessed goods. This provision indirectly provides a period during which the hirer can settle the outstanding balance before the sale of the repossessed vehicle.
3.2 Rights of the Hirer After Repossession
After repossession, the hirer has the right to redeem the goods at any time before the sale by paying the amounts due under the agreement, together with the reasonable expenses incurred by the owner in repossessing the goods.
4. Conclusion
In summary, the Hire Purchase Act, Cap 507 of the Laws of Kenya, provides a legal framework for the repossession of goods under a hire purchase agreement. While the Act requires the owner to give notice to the hirer before repossession and outlines the procedure to be followed after repossession, it does not explicitly mandate a three-month non-payment period before repossession or a six-week period before the sale of repossessed goods. The specific terms of the hire purchase agreement and the provisions of the Hire Purchase Act should be carefully reviewed to understand the rights and obligations of both parties in the event of non-payment or default.
Answered by mwakili.com