It has come to my attention that there is a new norm amongst taxi owners and taxi permit holders where the first mentioned transfers ownership of their vehicle to  the latter mentioned for the purpose of putting the taxi permit into operation.

I was informed by one of my clients in the taxi business that the reason why people conclude the above mentioned agreement is that the respective provinces’ taxi boards have ceased issuing taxi permits till further notice. This therefore allows taxi owners with no permits to operate their business lawfully and effectively by way of approaching the ones who are holders of valid taxi permits to assist with same. Both parties would conclude an agreement, normally by way of affidavit, stating that the taxi owner is passing the ownership of the vehicle in question to the taxi permit holder. The agreement would further state that a certain amount will be paid on a monthly basis by the taxi owner towards the taxi permit holder, making the agreement more like a lease agreement.

However, since the above mentioned agreement is in a form of an affidavit by both parties, who are in most cases lay persons when it comes to law, there would normally be no clauses indicating on what basis the agreement would terminate, nor would there be clauses stating the initial purpose of the agreement and all other relevant information.

The problem with such an agreement is that it can go both ways, either it can be dealt with in a proper way in which it is supposed to, and on the other hand it can be a matter of the rightful taxi owner ending up dealing with a dishonest person who will seek to claim the vehicle and profusely deny that the vehicle actually belongs to the non-permit holder after the non-permit holder has left this earth. Once such an issue arises that one of the parties passes on and the executor of the respective estate is struggling to claim back the vehicle form the permit holder as per the parties’ implicit initial agreement, or vice versa, then an attorney will usually be approached in order to assist with same. Upon the attorney being consulted therein, it is self explanatory that such an agreement will be problematic in litigation since it will be very difficult to ascertain the wishes of a deceased person. 

In light of the above, it is advisable that such agreements be concluded by an attorney or any other expert specializing in the drafting of contracts. This should be done to avoid complications once issues arise pertaining to the agreement between two parties.