How Do I Check Who Owns It/Is There Any Other Finance Interests

[jfm]

JFM. Just jumped back on. To clarify my thoughts. NO not the State. Big Brother pokes his nose into too much of our personal lives already! Surely the RYA could come up with some kind of register. Maybe even an organisation like Experian or one of the other big credit reference agencies that seem know everybodies affairs. Thinking out the box here. Hmmmm Glasses Guide? HPI? Who does the RCD databse? What about them? MCA? DVLA - bit close to Downing Street maybe! There must be some outfit that could do something, although I guess it means registration like a car to track the boat. We'll need reggy numbers! The more I think about it, it's not that simple, but if the alternative is that I might get screwed out of say £100k by some dodgy crook/broker/builder going bust etc.... then paying some body a small fee every year seems a blooming great idea to keep a register going. I have just thought of something! Why can't you insure against getting swindled as an addition to in your annual policy? Then the insurance companies can get together and set up something or pressurise the RYA to administer a register. Until then it's risky, risky and risky! Sorry if I have repeated what someone else has said but it is a long thread!

Asteven, not picking a fight but that's just not thought out. There is much devil in the detial. Look, this part of the debate is about the risk for someone who buys a boat then discovers later some lender has a mortgage on it, right? So you and others suggest a super database/register. Now, unless you pass a law saying loans that aren't on that database are unsecured, there's no point in the database, because it will remain possible for someone to buy a boat then discover an unregistered mortgage. Now, parliament is not going to pass such a law in relation to a private sector database; that would be a monopolistic licence to print money granted to the database owner. So it has to be a state sponsored database, like the part 1 reg.

And once you've got round that and created this super database, it will still be possible for a determined fraudster to create a new identity for his boat and re-register it, then sell it claiming it is mortgage-free (or does your database have a feature that prevents this?!)

 

[DAKA]

I have deleted this post as it was only justifying a previous post of mine and didnt add anything to the debate.

I am attempting to be less argumentative.

 

[Observer]

As discussed above, the court would very likely be disposed to grant relief to a good faith buyer against the claim of a secured lender who has simply not bothered to register a mortgage. Putting aside the issue of brokers absconding with sale proceeds (which is a totally different risk and one that can be avoided as jfm has explained), that leaves the risk of a fraudulent seller who re-registers or de-registers to conceal a mortgage.

It seems quite obvious to me that there can be no justification for further statutory protection. Why do private pleasure craft buyers deserve protection that isn't available to other potential victims of fraud? There is no reason to make a special case. The existing Part I registration system gives a largely effective if not watertight mechanism for recording security interests that doesn't exist for other assets (excluding aircraft) so yacht/ship owners/purchasers start off in a better position anyway.

If it was provided, would it be available to commercial vessels or commercial buyers?

What about protection for buyers of other expensive goods - a diamond necklace, a Rolex watch or an expensive car? These are all subject to exactly the same system of law.

What about investors who are defrauded (e.g. Ponzi schemes)?

A commercially operated registration system (like HPI) could go some way to reduce the unregistered mortgage and fraudulent seller risks but it would necessarily be voluntary (like HPI) and (like HPI) would not guarantee that no-one would ever lose. Without statutory backing (which is not justified for the reasons above) it wouldn't add that much to Part I registration anyway. And who would pay?

All this bleating "there should be a law against it" is just lazy, woolly thinking.

 

[DAKA]

Perhaps the problem is the phrase Broker.

Many expect to employ a Broker and expect to receive professional advice and a duty of care .

If the relationship was made more clear to buyers perhaps they would be more inclined to seek legal advice from a solicitor.

 

[Observer]

Perhaps the problem is the phrase Broker.

Many expect to employ a Broker and expect to receive professional advice and a duty of care .

If the relationship was made more clear to buyers perhaps they would be more inclined to seek legal advice from a solicitor.

We keep on going over the same ground. A broker is the agent of the seller and does not have a contractual relationship with the buyer. There may be a limited duty of care owed to the buyer, although I'm not aware of case law that shows the extent of it.

There is no intrinsic reason why brokers (the equivalent, in real property sales, of an estate agent) should handle the completion monies. In a real property sale, it is almost invariably the solicitor for each party (buyer, seller and lender, if applicable) who does that and there is no reason why it can't be the same in the sale of boats (or any other goods for that matter). I suspect the custom evolved over time as a result of the desire of both buyers and sellers for transaction management.

There is merit in the argument that it is less appropriate for brokers to have this role in larger value transactions. As we have discussed, it is up to the at risk parties to make that judgment.

 

[Tranona]

Pete

This thread has now been running for 4 weeks and has had over 2500 hits and over 200 posts! I could count up the number of individual posters, but doubt that it is more than 25 and most of the posts come from about 8 people roughly equally divided between the two points of view.

This suggests to me that for the vast majority of boaters this is a non-issue as indeed it should be. There is no reason why the average buyer and seller of boats should have knowledge of the law at the level of detail being discussed here. This is for professionals and nerds.

Not sure there is much point in continually rehearsing the arguments and thinking up more theoretical examples of situations that might be outside the current mechanisms.

Every morning (after my cup of tea) I look out of my bedroom window over Poole Harbour. There are an estimated 8000 boats in the harbour, all of which have been through this process successfully - and many several times. I don't see their owners and ex owners jumping up and down complaining about being ripped off (at least not in buying and selling boats!)

So, please keep a sense of proportion. When you come to change your boat you will know more about the ins and outs and how to minimise your risks. However, use your knowledge to your advantage and not as a justification for seeing dangers that don't exist.

 

[jfm]

As discussed above, the court would very likely be disposed to grant relief to a good faith buyer ...

just lazy, woolly thinking.

All agreed Observer!

If the relationship was made more clear to buyers

Therein lies where we really disagree on Daka. We all agree about the risks and pitfalls than can happen in the boat-buying process. But you say buyers/sellers would be safer if the relationship "was made more clear", meaning that it is someone else's job to do the "making clear". Whereas I say they would be safer if they got off their aarses and did something for themseves such as bothering to think about it, asking a solicitor, or even looking on this forum. You are supporting nanny-state-ism where the job of the state is to spoon feed citizens (at others' expense) just to stop the poor little darlings making a mistake. I and others are saying people (involved in big-ticket luxury goods purchases, at least) should wise up and take responsibility for their own transactions

 

[DAKA]

Therein lies where we really disagree on Daka.

Agreed

I and others are saying people (involved in big-ticket luxury goods purchases, at least) should wise up and take responsibility for their own transactions

I cringe at that one, anyone who isnt as knowledgeable as the forums legal team is fair quarry for the fraudsters and rouge brokers, ouch that really stings.

I would like to thank the forum legal team including your good self , Troana and Observer for sharing such a wealth of knowledge , and for keeping it so polite.

I have read and learnt a great deal.
I am unhappy about the situation but that is obviously not of your making and my disgruntled mutterings shouldnt be aimed at any of you and I apologise if at times it has come across that way.

Regards.

Pete

 

[MapisM]

I cringe at that one, anyone who isnt as knowledgeable as the forums legal team is fair quarry for the fraudsters and rouge brokers, ouch that really stings.

Pete, I followed this debate at a distance so far, but I must now say that I sympathize with your viewpoint.
Indeed, the world you describe with your sentence above is exactly the one we're living in.
And mind, that doesn't apply just to boat purchasing. You could say more or less the same for many other transactions, from the purchase of a second hand car worth a grand to the purchase of companies worth billions.
Observer, JFM and Tranona are right, you can't expect this state of affairs to change, for various reasons. Btw, in the last decades things got even worse and more complicated in this respect, and I don't see reasons why they could/should improve in the near future.
But boys, isn't that sad?!...

 

[ari]

Indeed, the world you describe with your sentence above is exactly the one we're living in.
And mind, that doesn't apply just to boat purchasing. You could say more or less the same for many other transactions, from the purchase of a second hand car worth a grand to the purchase of companies worth billions.

You can HPI a car. Not foolproof, granted, but clearly workable and useful.

 

[ari]

This suggests to me that for the vast majority of boaters this is a non-issue as indeed it should be. There is no reason why the average buyer and seller of boats should have knowledge of the law at the level of detail being discussed here. This is for professionals and nerds.

.

You don't think that there is any reason that buyers should be aware that there is no way of checking for a financial lien that they would ultimately be responsible for?

Good grief...

 

[Tranona]

You don't think that there is any reason that buyers should be aware that there is no way of checking for a financial lien that they would ultimately be responsible for?

Good grief...

Once again Ari, you miss the point. I would argue that most buyers are aware of the pitfalls, particularly on high value boats where I have often said if they are intelligent enough to acquire the wherewithall to buy an expensive boat they are quite capable of looking after their own interests. If they don't understand it engage a professional.

You and others have failed to establish there is a widespread problem in the specific issue of unregistered charges. You have been told that boats already have a registration system for charges that is more stringent than other consumer items - dating from well before high ticket yachts existed. You have been advised by those who know more about it than me that it is very difficult to make unregistered charges stick against a subsequent good faith buyer. You have been told that for a determined fraudster any additional register is unlikely to provide a serious barrier to their wrong doing.

So, once again, where is the problem that you vague solution is seeking to solve?

My comment about people not needing to know the detail at this level is a generic one. Our legal system has evolved to regulate relationships between individuals. It is very effective as the vast majority of people, organisations and systems comply with it. You can never exclude fraudsters and your proposal, never mind the lack of need, will not stop fraud.

 

[gjgm]

I think it is also worth a note that in all probability, many attempts at fraud would fail, detected through all the safeguards already mentioned. So in the finality, the real risk is against a pretty sophisticated fraud; so sophisticated in fact, we dont seem able to find any examples in the last couple of decades. I think that should offer some comfort.

 

[Observer]

You can HPI a car. Not foolproof, granted, but clearly workable and useful.

You can HPI a boat. I don't know if the marine finance houses do, but it can be done.

You can also register a mortgage on Part I. Not foolproof, granted, but clearly workable and useful.

You insist on conflating what are in reality quite separate issues/risks: (i) the possibility of an unregistered mortgage held by a mainstream finance house on a Part I registered boat (unlikely, because any prudent lender would, and all finance companies do, to the best of my knowledge, take the obviously available step of advertising their interests to the world); (ii) a mortgage on an unregistered (or SSR registered) boat (unlikely, because any prudent lender would, and all finance companies do, to the best of my knowledge, take the obviously available step of requiring Part I registration os that they can advertise their interests to the world); and (iii) a pre-existing mortgage on a boat that has been re-registered (or de-registered) for the purpose of perpetrating a fraudulent sale.

The only place that Part I registration breaks down is in case (iii) and a fraudster who is sufficiently intent on his business to do that would no doubt get round an HPI type registration as well. Don't forget that in addition to the re-registration/de-registration, the fraudster, in order to satisfy unexceptional due diligence enquiries that would (or should) be made by a prudent prospective buyer, would also have to create a paper trail of falsified ancillary documentation - bill(s) of sale, invoice(s) for sale or mooring fees, service records. It could be done but there is no evidence that it actually is being done.

 

[ari]

You can HPI a boat. I don't know if the marine finance houses do, but it can be done.

.

Really? How?

 

[ari]

I think it is also worth a note that in all probability, many attempts at fraud would fail, detected through all the safeguards already mentioned. So in the finality, the real risk is against a pretty sophisticated fraud; so sophisticated in fact, we dont seem able to find any examples in the last couple of decades. I think that should offer some comfort.

If you regard removing a plaque that may or may not have been attached in the first place as "sophisticated" then I'd agree.

However our definition of the word may vary...

 

[ari]

Once again Ari, you miss the point. I would argue that most buyers are aware of the pitfalls, particularly on high value boats where I have often said if they are intelligent enough to acquire the wherewithall to buy an expensive boat they are quite capable of looking after their own interests. If they don't understand it engage a professional.

.

With respect you're missing the point. Employ a professional to check what exactly? There's nothing to check (save Full Part One which a finance house may or may not have used, and which can so very easily be "hidden").

I think I'm going to bow out on this one, the only thing that we've established as fact is that there is absolutely no real way way of ensuring a boat is free from lien other than relying on seller honesty.

The argument seems to be centred instead over whether this is an issue.

Some feel that parting with a five or six figure sum on a nod and a wink and a signature on a bit of paper is fine.

Some don't.

But most, it seems, simply do not understand the implications and risks involved (or as has been stated many times in this thread, simply believe that their broker or finance house or other "professional" will deal with it, blissfully ignorant of that fact that they can't so won't).

Funny old game.

 

[gjgm]

If you regard removing a plaque that may or may not have been attached in the first place as "sophisticated" then I'd agree.

However our definition of the word may vary...

More accurate to say that our opinion of the risk might vary, perhaps.

 

[ari]

Perhaps not our opinion, but our affordability.

A decision to take a risk is based not just on the level of risk, but the resultant "pain" should the risk not come off. In simple terms I'll happily bet a tenner on a 50:50 bet say, but I wouldn't risk my house on a 1:50 bet, even though the level of risk is much less.

When it come to boats, many of us simply cannot afford to be blase about the investment involved. I buy a boat very much on the basis of what I perceive it'll be worth come resale (in other words it isn't "dead" money, it's money tied up, most of which will come back).

So if I buy a £50K boat I simply cannot afford to suddenly discover it owes £30K (or maybe £20K or maybe £60K) to a finance house, simple as that. I'll deal with a mechanical hit, that's a fair risk in my opinion, a lower potential amount, and in a worst case scenario (both engines exploding on the first trip out, say) I could even simply mothball the boat till I can afford to deal with it if I really had to.

My guess is that those who've contributed along the lines of it being an acceptably small risk are somewhat better placed financially to cope with that happening.

Lucky them.

But I guess it's a risk many of us will have to continue to bear whilst others remain either ignorant of the facts, or simply too rich to care.

C'est la vie.

 

[nautique]

checks on purchases

Hi I am new to this forum but I would just like to say that we were the couple that sold Pete - Felix. To be honest at the start we sold her privately and had no broker involved and paid nothing to a broker in the deal with Pete. There has to been some trust on both sides - when selling privately we did not know if he could be trusted and even on the sea trial we could of been out giving someone that we did no know a joyride of his life - showing us a bank account means nothing until you have the money in your pocket - and to be honest you find that you have to trust no one. My husband and myself have been brought up with boats from being toddlers - in Cornwall you didn't get a car to start your driving experience but the more usual dingy and a pair of oars with much shouting and cursing from a father determined to teach you sculling if it killed him, but I digress we knew the boat we were selling like an old friend and a broker can not give the details of the experience and quirks of a boat where we could - and hopefully Pete could see in the end that we were genuine - although he did give a hard time at some moments of the purchasing process - ha ha but everything turned out right in the end. A broker is not the be end and all of selling a boat except if you are a novice where a good reputable broker is found by word of mouth from other boaters and is there to help as well as sell. Private is well worth a look if you are well experienced boater and know what you are looking for and at.