If the steps in Part B are not completed, the Seller has an unsecured debt and no right to recover the Vehicle. This is the single most important operational step in the entire transaction.
Part A — Security Agreement
1. Parties and obligation secured
This Security Agreement is made on , 20 between (“Secured Party” / Seller) and (“Debtor” / Buyer), in connection with the Murabaha Vehicle Sale and Installment Payment Agreement of the same date (the “Sale Agreement”).
It secures payment of the Deferred Balance and performance of all the Buyer’s obligations under the Sale Agreement.
2. Grant of security interest
The Buyer grants to the Seller a purchase-money security interest in the following collateral:
- The Vehicle described in the Sale Agreement, identified by VIN .
- All accessories, attachments, equipment, replacement parts, and additions to the Vehicle, whether now owned or later acquired.
- All proceeds of the Vehicle, including proceeds of any insurance policy, warranty claim, or claim against a third party for damage to or loss of the Vehicle.
3. Buyer’s covenants
- The Buyer will keep the Vehicle free of any other lien, security interest, levy, or encumbrance.
- The Buyer will keep the Vehicle in California and will not move it out of state for more than thirty (30) consecutive days without written consent.
- The Buyer will not sell, lease, rent, pledge, or transfer any interest in the Vehicle while a balance remains.
- The Buyer will maintain the insurance required by the Sale Agreement, naming the Seller as lienholder and loss payee.
- The Buyer will keep the Vehicle at the address on file and notify the Seller within five (5) days of any change of address or garaging location.
- The Buyer will allow the Seller to inspect the Vehicle on reasonable notice, not more than twice per year absent default.
4. Perfection
The Buyer authorises the Seller to take all steps necessary to perfect this security interest, including recording the Seller as legal owner / lienholder on the California Certificate of Title and filing any financing statement required. The Buyer shall sign promptly any document reasonably required for that purpose, and the Buyer’s failure to do so is an event of default.
5. Default and enforcement
On an uncured event of default under the Sale Agreement, and after the notice and cure period required by that Agreement, the Seller may exercise the rights of a secured party under the California Commercial Code, including taking possession of the Vehicle and selling it in a commercially reasonable manner.
Repossession may be carried out only without breach of the peace. The Seller shall not use or threaten force, shall not enter a locked garage or gated property without consent or court order, and shall not take the Vehicle if the Buyer or any other person objects at the scene.
The Seller shall give the Buyer written notice of the intended disposition, shall account in writing for the proceeds, shall waive the unearned portion of the markup, and shall return any surplus to the Buyer within thirty (30) days.
Personal property found in the Vehicle at repossession shall be inventoried and returned to the Buyer at no charge.
6. Release
On payment of the Total Sale Price in full, the Seller shall within ten (10) days release the lien, sign and deliver the release of legal owner interest, and give the Buyer a written statement that the obligation is satisfied.
Seller (Secured Party): Date:
Print name:
Buyer (Debtor): Date:
Print name:
Part B — Lien perfection checklist
To be completed at signing. The platform should not mark a transaction as complete until every box is confirmed.
| ✓ | Step | Responsible | Evidence to capture |
|---|---|---|---|
| □ | Confirm Seller holds a clean California Certificate of Title in the Seller’s own name, with no existing lienholder recorded | Platform | Photo of title, front and back |
| □ | Confirm no undisclosed lien exists against the VIN | Platform | Lien / title history check |
| □ | Seller signs title over to Buyer as registered owner | Seller | Signed title |
| □ | Seller entered as legal owner / lienholder on the transfer application | Seller | Completed DMV transfer paperwork |
| □ | Odometer disclosure completed on the title as federally required | Both | Signed odometer statement |
| □ | Transfer submitted to DMV within the statutory deadline | Buyer | DMV receipt / submission confirmation |
| □ | Insurance in force with Seller named lienholder and loss payee | Buyer | Declarations page |
| □ | New title issued showing Buyer as registered owner and Seller as legal owner | Platform | Copy of issued title |
| □ | Copies of all signed documents delivered to both Parties | Platform | Delivery confirmation |
Part C — Lien release record
| Date final payment received | |
| Total received across the term | $ |
| Release of legal owner interest signed and delivered on | |
| Satisfaction statement issued on | |
| Seller signature |