Bought boat with a mortgage on it ( Hypothetical)

[jfm]

Completely agree Henry. You will very shortly be told that as no serious history of problems exist it would be a waste of time. You will also be told that as it's so easy to change the HIN, there is no point.

It's not too much bother for some people to change the identity of a car, so perhaps we shouldn't have a register for those either.

Paul, off the cuff, what would this database cost in set-up expenditure and then annual maintenance? Not my line of business so i don't know. Remember the set up costs involves putting all the existing boat armada onto the database to begin with, as well as writing the code, passing the laws, getting the building to put the computer in, and so on. £30million and £5million a year kinda thing? I really dont know but if you're arguing for it then it has to be cost effective (compared with a scheme where the state just wipes the bottoms of unfortunate boat buyers by writing them a cheque for the outstanding loan on the boat they just bought)

On further thought my question above might be encouraging this to become another debate for/against an HPI-for-boats database, and I'm happy for that NOT to happen , so feel free to decline to reply

 

[Brian Legal]

Mortgage

The post to which I was replying asked if (or suggested that - I can't remember) a "boat-is-free-of-encumbrances" warranty given by seller to buyer meant that lender's ability to enforce the mortgage was frustrated, and I was replaying to say it most certianly did not. That's all. (C is the lender in my post, A and B are buyer/seller)

Brian Legal was making a quite different point in the bit you quote, which is that if you happen to buy a boat that is security for someone else's borrowings the lender will generally not take the boat from you provided you "just" (Brian's word) repay the loan out of your own pocket. TBH, on that specific point i share Ari's sentiment, ie "Well thanks a bunch Brian, that's a lot of comfort matey!"

Thanks. I was indeed referring to "just" paying the loan. Sorry to be the "doom and gloom" input but that is indeed correct.

It is not really about satisfying someone else's laibility under a contract it is just that under that loan contract the boat itself is put up as security for the loan so if the loan is not repaid the lender can take the asset (the boat) by way of payment of the loan. If it were to be sold, in this scenario the remainder of the money (if any) would be returned to the new owner. The fact that somebody else now owns the boat, is sadly of no consequence to the lender. I'm sorry that it is a like that - it is unfair to an innocent buyer.

I woud only add that is is the usual practice of lenders to register the mortgage and insist on "proper" Part 1 registration so we are looking at a limited number of situations.

Brian

 

[gjgm]

The post to which I was replying asked if (or suggested that - I can't remember) a "boat-is-free-of-encumbrances" warranty given by seller to buyer meant that lender's ability to enforce the mortgage was frustrated, and I was replaying to say it most certianly did not. That's all. (C is the lender in my post, A and B are buyer/seller)

Brian Legal was making a quite different point in the bit you quote, which is that if you happen to buy a boat that is security for someone else's borrowings the lender will generally not take the boat from you provided you "just" (Brian's word) repay the loan out of your own pocket. TBH, on that specific point i share Ari's sentiment, ie "Well thanks a bunch Brian, that's a lot of comfort matey!"

All is clear, thanks!

 

[henryf]

Paul, off the cuff, what would this database cost in set-up expenditure and then annual maintenance? Not my line of business so i don't know. Remember the set up costs involves putting all the existing boat armada onto the database to begin with, as well as writing the code, passing the laws, getting the building to put the computer in, and so on. £30million and £5million a year kinda thing? I really dont know but if you're arguing for it then it has to be cost effective (compared with a scheme where the state just wipes the bottoms of unfortunate boat buyers by writing them a cheque for the outstanding loan on the boat they just bought)

On further thought my question above might be encouraging this to become another debate for/against an HPI-for-boats database, and I'm happy for that NOT to happen , so feel free to decline to reply

Hi there

Nothing like your estimates. There are no laws that need passing, just as with the current motor vehicle database it would be voluntary. However if as a lender you hadn't registered your interest in what would be an industry standard database then I would hope it would reflect in any legal action you subsequently sought to take out.

I'm thinking £25 a time to register the vessel. £15 to check it.

I'd be surprised if I couldn't get it set up for less than £50k. There will be additional marketing to get all the relevant parties on board. You might even offer some form of start up block entry pricing to get things up and running.

Building costs - they're pretty much giving office space away these days, and a couple of staff so I can still enjoy the boat!

Henry

Edited to say, why would you be against an HPI for boats? I can't see any harm, only good. We aren't arguing a DVLA for boats.

 

[ari]

I woud only add that is is the usual practice of lenders to register the mortgage and insist on "proper" Part 1 registration so we are looking at a limited number of situations.

Brian

Really?

As has been said, if an owner wishes to defraud a buyer (which is what we're talking about) it's the work of a moment to remove the Part One plaque (if it were put up in the first place) and change the name.

At which point your faith in Part One becomes null and void as there is no other way to cross reference the database.

 

[Brian Legal]

Mortgage

Really?

As has been said, if an owner wishes to defraud a buyer (which is what we're talking about) it's the work of a moment to remove the Part One plaque (if it were put up in the first place) and change the name.

At which point your faith in Part One becomes null and void as there is no other way to cross reference the database.

No, Part 1 isn't about looking at the plaque on the boat. it's about looking at the Register to see if the boat is registered and there are any registered mortgages.

If there is any doubt about the identity and in any event check the HIN / CIN number. Yes, these can be removed but this is not as easy as you might think. They shoudn't be on a plaque but moulded into the hull. Most models have the HIN moulded in a prominent location but many also have it in a secret location. Ask the manuafacturer.

Brian

 

[ari]

No, Part 1 isn't about looking at the plaque on the boat. it's about looking at the Register to see if the boat is registered and there are any registered mortgages.

If there is any doubt about the identity and in any event check the HIN / CIN number. Yes, these can be removed but this is not as easy as you might think. They shoudn't be on a plaque but moulded into the hull. Most models have the HIN moulded in a prominent location but many also have it in a secret location. Ask the manuafacturer.

Brian

Is the HIN part of the Full Part One registration and can the register be searched by it?

 

[Brian Legal]

Mortgage

Is the HIN part of the Full Part One registration and can the register be searched by it?

I didn't know the answer but have just checked and you can. I confess that most people search the name though!

Brian

 

[ari]

Then I've learned something new. I didn't think the HIN was on the register, just the official number and the measurements.

 

[Brian Legal]

Mortgage

Then I've learned something new. I didn't think the HIN was on the register, just the official number and the measurements.

Actaully, I went off to check, having received your comment and the answer is still "yes" but I shoud say that the Part 1 certificate I just looked at didn't have it filled in!!!

Brian

 

[ari]

So how could it be checked if the info isn't there?

 

[Brian Legal]

Mortgage

So how could it be checked if the info isn't there?

I never said that the system was perfect but Part 1 Registration is good proof of title. The HIN / CIN should have been there and (without wishing to say horrid things about the MCA) there must have been an error. Indeed the boat I looked at had been subject to a previous fraud.

If I am wrong on this I woudl love to hear from other owners who are Part 1 registered.

Brian

 

[ari]

I think it would be interesting to know how many boats have the HIN logged on the registration. You could have a rogue one, or it could be common place.

And if it's the latter then the advice to just check Full Part One is a bit meaningless since there is no reliable way of finding out whether a boat is on there...

 

[davidej]

We have had n (where n is a large number) of threads on this subject and the related one "what happens when the broker goes bust"

Anybody who has read them carefully should know by now that there is NO 100% foolproof answer.

But in reality, thousands of second-hand boat change hands each year.

Apart from the much-quoted case of B A Peters, does anyone know someone who has lost money this way?

 

[ari]

And thousands of people drove home tonight without crashing. But I bet you still put your seatbelt on.

This might be worth a read.

http://www.independent.co.uk/news/b...ts-behind-lax-registration-rules-1407306.html

 

[MYAG]

I never said that the system was perfect but Part 1 Registration is good proof of title. The HIN / CIN should have been there and (without wishing to say horrid things about the MCA) there must have been an error. Indeed the boat I looked at had been subject to a previous fraud.

If I am wrong on this I woudl love to hear from other owners who are Part 1 registered.

Brian

Brian, dont think you are wrong, I have my HIN on my Certificate of British Registry. It is clearly entered against the line IMO / HIN. Looking back its been on all my previous boat certificates.

 

[ari]

If that is the case then that's very reassuring. At least there's a chance of discovering whether a boat is Full Part One registered even if the plaque has been removed.

Anyone else want to check and see if their HIN (not official number) is on their Full Part One registration document?

 

[davidej]

And thousands of people drove home tonight without crashing. But I bet you still put your seatbelt on.

This might be worth a read.

http://www.independent.co.uk/news/b...ts-behind-lax-registration-rules-1407306.html

But my point is that whild you should take all the precautions you can. there is no 100% secure seatbelt.

So if you are not prepare to take any risk - don't buy secondhand (or new through a dealer).

The newspaper article was about a 1990 transaction - has anyone heard of a more recent case?

 

[ari]

Being prepared to take no risk and being prepared to take absolutely any risk are not the only options. People want to feel there is a reasonably robust system for ensuring that their very expensive purchase is free from finance that they could become responsible for, just like HPI when buying a car. Is that unreasonable?

The article is an old one, but mentions that there were many more cases even back then.

 

[Tranona]

But my point is that whild you should take all the precautions you can. there is no 100% secure seatbelt.

So if you are not prepare to take any risk - don't buy secondhand (or new through a dealer).

The newspaper article was about a 1990 transaction - has anyone heard of a more recent case?

Not only that, but if my memory serves correctly 22 years on, subsequent to that case a working party was set up to consider the implications - usual suspects, brokers, finance houses, RYA, BMF and came to the conclusion that there was no systematic evidence that this was a problem and there was no justification for a registration system.

Imagine the number of transactions that have taken place since then - and that case is still the one quoted as an example. Not suggesting there have been no cases of fraud, but indicative that it is not the major issue some think.