An overview of boat title, lien, and ownership searches.
One of the most important aspects of buying any boat is ensuring
that it has a marketable title which is free of liens and
encumbrances. An effective title search should therefore become the
cornerstone of any boat purchase and sale transaction. Such
undertaking may prove difficult however, given the complex issues
surrounding Coast Guard documentation, boat registration, state
titling, and maritime boat liens.
This overview explores the
various aspects of conducting boat title searches, how to verify ownership, and
where to look for recorded liens or encumbrances. You will also learn about the
concept of hidden maritime liens and when to raise an alarm with regard to a
boat's title condition.
Search Elements -
An effective boat title search consists of several basic research elements.
These
include a boat description verification, boat registration
search, boat lien search, ownership search, and boat history search.
The various types of research are all interrelated and should come
together as a complete and accurate portrayal of the boat's overall
title condition. This is best accomplished by gathering all elements
into an organized report where the data can be compared for any conflicts,
anomalies, or inconsistencies.
Seller's Disclosure - A research project should
always begin with a full disclosure from the seller which will serve as a basis
for the ensuing search activities. A rightful owner should have
no difficulty in providing details such as a full description of
the boat, how it is currently titled and/or registered, and
whether there are any outstanding liens, encumbrances, or claims.
The disclosure should also include information as to when, where,
and how the boat was acquired and if there are any historical events
which may have impacted the boat's title condition. All details should be supported by physical evidence
such as copies of the boat's title certificate,
registration certificate, Coast Guard documentation certificate, and
mortgage or financing documents as applicable.
Boat Description Verification - The
description verification involves a physical inspection of the
boat to determine its actual length, make or model designations, and
all identification numbers. These should include any registration or
documentation numbers affixed to the boat along with the hull
identification number. The boat's name and hailing port are also
relevant as they may provide clues to whether the boat has been
Coast Guard documented or foreign registered. The inspection should
be conducted on your own behalf unless you have supreme confidence
in the seller's representations. If an inspection is performed by a
surveyor, make sure photographs or stencil rubbings are provided for
the identification numbers.
Boat Registration Search -
All registration and title documents presented by the seller should
be verified directly with the issuing agency to make sure they are
current and valid. It is not unusual to find outdated or superseded
certificates which have remained in circulation. In addition, all agencies where the boat may have been
potentially titled, registered, or documented should be contacted to
see if they show a record of the hull identification number in their
databases. If the boat has ever been Coast Guard documented, even
though expired or deleted, an abstract of title
must be obtained.
Recorded Lien Search - The manner
in which the boat has been titled or registered will determine where
to look for any recorded liens, claims, or mortgages.
If the boat is not Coast Guard documented and has been registered in a
non-titling state, it will be necessary to conduct a Uniform
Commercial Code (UCC) search. State titled boats which are not
documented will typically show security or lien interests on the
title certificate. However, this is not always the case and you
should confirm such status with the issuing agency. On boats
which are documented, it will be necessary to obtain an abstract of
title from the U.S. Coast Guard certificates of documentation do not
show mortgages and claims of lien.
Non-recorded Liens
- Liens and claims can follow a boat and become a burden
to subsequent owners even though not recorded.
This is especially true of those which are documented with the U.S.
Coast Guard. Such liens can include unpaid obligations for moorage,
repairs, supplies, and other necessaries related to the boat's
operation. Unfortunately, such liens may be difficult if not
impossible to detect in some cases. At best, you can check with any
known suppliers or service yards which may have had access to the
boat. In any event, it would be prudent to have other means in place
of holding the seller responsible should any hidden or undisclosed
liens
arise after the sale has been consummated.
Boat Owner Search - Boat or vessel
title insurance is not currently available within the marine
industry. This makes it incumbent upon
the seller in most cases to make good on any title representations or
guarantees. Of course, it does not help much if the guarantor is
unable to fulfill such obligations or can not be subsequently
located. A background check to see if
the seller is responsible and financially solvent may alleviate such
concerns. Criminal and asset checks are readily available through a
number of internet services companies at a reasonable cost.
Boat History Search -
A boat history or background search will help identify any
circumstances or events which may affect the title's condition.
These can include situations where the boat has been stolen or
involved with incidents which have incurred some type of liability.
Although boat history searches are available on the internet, these
are are rarely conclusive and should never displace warranties,
guarantees, and other
safeguards. You can also check directly with federal and state
enforcement agencies if there is a sufficient cause of action.
Chain of Ownership
- It is helpful to construct a complete chain of ownership
showing every owner since the boat was new. This may not be possible
in some cases however, especially for older boats. If the boat has
remained Coast Guard documented right out of the factory, an
abstract of title can be obtained showing all transfers of
ownership. State records are more difficult as many jurisdictions do
not keep such data indefinitely. Archived microfiche records may be
available in some states, but obtaining them is usually cumbersome,
time consuming, and expensive.
Marketable Title - In addition to having an
equitable interest, the seller must be capable of providing whatever
items as may be required to record or establish title in the buyer's
name. With respect to boats this typically involves a state title,
current registration certificate, or certificate of documentation.
These will need to be accompanied by the appropriate instruments of
release or transfer. Any parties holding a security interest or
claim against the boat must also provide releases or discharges.
Pass
Through Titles - There are many situations where
owners have never titled or registered the boat into their names.
This does not automatically disqualify the title from being
marketable if a seller has the necessary items to establish a
continuance of ownership. These may include a bill of sale or
released title from the last owner of record. A convincing
explanation as to how the boat was acquired and why it was not
subsequently titled or registered should also be forthcoming.
Delinquent taxes and registration fees can sometimes become an issue under these
circumstances.
Alarm Flags -
Any inconsistencies in the vessels description or identification
numbers as they relate to the title or registration certificates
should be cause for alarm. This is especially true with
regard to
identification numbers which are missing, obscured, or have the
appearance of being altered. Expired, damaged, missing, or altered
registration certificates should also be of concern. Above all, the
seller must display a complete willingness to
disclose all matters related to the boats title condition. Any
reluctance, vagueness, or lack of cooperation in addressing such issues should be viewed with great deal of trepidation.
Closings
and Settlements - Boat closings, settlements, and
disbursements should never be finalized unless you are convinced
that the seller is capable of producing a marketable and unencumbered title.
You should also have full confidence in the seller's wherewithal to
make good on any representations or guarantees of title. If such
conditions do not exist, it may be prudent to establish a reserve or
holdback to cover any such contingencies. A seller may have less
motivation for correcting any title deficiencies once the purchase
price has been fully paid.
Title
Search Resources - There are a number of resources
on the internet which can offer assistance with researching boat
titles. Although
federal and state agencies are among these, they are typically narrow in scope
and limited by anti-disclosure restrictions. The database page of
our web site also contains a compete listing of online boat title search
resources, including our very own
BoatScope database service. This
includes a hull number verification checker, a listing of all Coast
Guard documented boats, certain historical data, and information on how to obtain state
registration records.
Professional Assistance - As you can see, boat title
research can be quite challenging unless you have a good working
knowledge of how this all comes together. It may therefore
be worthwhile to have a boat titling or documentation professional
review all of the seller's items and perhaps assist with the overall
process of researching the title. In any event, you should seek
counsel from a qualified attorney if any titling related issues
remain unresolved before finalizing a boat purchase transaction.
A Division of Maritime Partners, LLC
State of Washington USA
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