How do you know if a boat has outstanding finance ?

[petem]

Ari, Part 1 does include HIN (just checked mine to be sure).

 

[ari]

What follows is guesswork but maybe broadly in the right ball park.

To set up this register just for boats in UK would (at a guess and anyone chip in with better info) cost £10m in year 1 (software, set up, search for employees, office fit out, the process of passing law fairly ie consultation, etc) and then say £3m pa (salaries, office rent, software/database management). Lets' amortise the £10m set up cost over 10 years so £4m per year.

This quick google https://www.statista.com/statistics/530382/boat-ownership-numbers-united-kingdom-uk/ says there are c.200,000 motorboats/powerboats/yachts in UK but obviously that includes sub £10k stuff so I estimate 50,000 high value boats where finance duping is enough to hurt people. Then let's say 20% are sold used per year - average 5 year hold. That's 10,000 transactions pa. So the cost of the register service is £400 per transaction if every transaction uses it, or £800 if 50% use it.

Not an huge amount to be fair, but not trivial. Are people prepared to pay that? And if £800 is too much on a £25k boat so the price of the service becomes a % of the boat purchase price instead of a flat fee, are people buying a £150k motorboat prepared to pay say £3,000 for the service?

My numbers may be very rough and happy to be shot down! The Aus PPSR fees are lower than my numbers above but it covers a MUCH greater number of assets than just boats so there is a massive economy of scale

Interesting. Your interpretation of 'high value' may be slightly different to mine, but anyway, why not include lower value boats, why not include all boats? (Exactly as per cars - take out a car loan on a £5,000 Fiesta and it'll come up on a HPI search).

That takes your 10,000 transactions to 40,000 and your £400 to £100. So, for a single transaction say £50 to have the boat registered on the scheme (paid for by the buyer taking out the finance), £25 for the bloke buying the boat to check the register and a £25 fee at the other end to take the borrower's name off?

Brilliant, I'll happily pay that to have my 'bottom fully wiped' (to use your expression), cheers!

And you mentioned the Australian scheme being cheaper due to economies of scale. So why not do that? Integrate it with the HPI scheme already in place. What would that do, halve those numbers, more?

(I'm curious about your bottom wiping analogy. I do wonder whether, when you last bought an expensive property and your solicitor promised you that all necessary searches would take place, you replied 'Have my bottom fully wiped? How very dare you! Damn your eyes Sir, I shall take my chances like the sportsman I am!'

I'm inclined to doubt it, but I don't know you so hey, maybe you did! )

 

[ari]

Ari, Part 1 does include HIN (just checked mine to be sure).

Then that has changed since I last bought a Full Part One registered boat (and for the good, pleased to hear it).

It's actually on the Certificate of Registry? (I know brokers sometimes write in on Bills of Sale, but that didn't used to get entered on the Certificate of Registry).

 

[petem]

Then that has changed since I last bought a Full Part One registered boat (and for the good, pleased to hear it).

It's actually on the Certificate of Registry? (I know brokers sometimes write in on Bills of Sale, but that didn't used to get entered on the Certificate of Registry).

Yes, it's on the Certificate (been that way for at least 8 years).

 

[ari]

Yes, it's on the Certificate (been that way for at least 8 years).

Then that is a step in the right direction. I wonder whether you can search the register with just that? (Logic would suggest that you should be able to, what's the point otherwise? But it is a government department so...)

 

[MapisM]

Wasn’t the Italian boat reg formed for another reason along the lines of “state control“
…

I'm intrigued by these conspiracy theories, because I never thought of Brits as people who fear the State interferences, or have reasons to reject any form of control - regardless of whether meant to wipe anybody's bottom, levy taxes, whatever.
Ok, I understand that you have good reasons lately to not trust your leaders as much as you used to have for trusting Attlee or Churchill, but what's wrong with having clear rules governing a civilized society, at least in principle?
Blimey, I can't believe that an Italian is telling what I'm telling to Brits - and mostly pretty erudite ones, btw...

Fwiw, I don't think the way boat papers are designed and handled in IT have a lot to see with State interference.
Afaik, they were originally designed with the support of RINA, with the aim of having something specifically oriented to meet the different requirements of vessels compared to cars, for instance.
The result is a booklet which, on top of the usual technical specs of the vessel, keeps track of the ownership history and pledges (if any).
What's there not to like, I wonder?

If a football player decided to hide his income to the fiscal authorities and had his boat impounded as a result, that's another story - and it's his problem, obviously. Blaming the system for making the prosecution of these illegal behaviors easier is a weird attitude to say the very least... :ambivalence:

 

[benjenbav]

Yup you did ask for advice so fwiw these are my thoughts on that question (in UK). To be clear: there is no 100% certain method to be sure when buying in a private sale that there is no lender hidden from you who has a claim on the boat for a debt that the seller has lied about. Brokers/solicitors/prayers cannot give such a guarantee.

1. Consider buying new - it takes much of the problem away, depending on the details.
2. Do the basic diligence on the boat: is it part 1 with a debt registered on it?
3. Is it SSR, and if so has it changed its name even slightly (verified from marina bills, engine service history, whatever)
4. Is there a boat on part 1 with same name as the boat now carries or that the service bills indicate? If yes get a transcript. Mars database is useful here.
5. Get to see originals of boat papers before exchanging contracts. You can't retain them of course but you can see them. This gives early warning of "logbook loans" scenarios. Then make delivery of them in original to the broker (as stakeholder) on completion a precise contractual term (prior to wiring the money) with the deliverable papers attached to the contract in photocopy. Do not simply have a contractual clause saying that on completion of the deal the seller will hand over a list of papers (though do, if you're smart on legalese and want to create some leverage on completion in relation to documents that are unlikely to be delivered, but that's the "advanced" module of this post).
6. Make sure the contract provides that broker holds deposit money and completion deliverables as stakeholder not agent of seller.
6a Be present on the boat immediately before completion and make sure it is not in the possession of someone else unless they confirm directly to you that they have no actual or potential lien.
7. Make sure that seller represents in the purchase contract that boat is debt free. This is important because if seller is lying, that is a fraudulent misrepresentation which means you can rescind the contract if you want, not just sue for damages. It also turns bad seller's actions into a crime. DO NOT EVER rely only on the "debt free" status of the boat as printed on the standard MCA bill of sale: that is seriously defective legally because it is a representation given AFTER you entered into the contract. You want the misrepresentation, if there is one, to be in the actual contract. (The bill of sale isn't a contract).
8. Next, pause to remember that if the boat has debt on it what you want from seller is money. So turn your diligence attention onto seller not boat.
9. Who is seller? Googlable? LinkedIn? Can you see some history? Does house show up on land registry as mortgaged? Is the house big/valuable? Financials of the company seller owns? Etc. Basically, is seller reasonably secure financially, personally. And firmly established in your country (kids at school, house, business, whatever) which imho is more important than location of boat. All doable online
10. Is seller in a world where he/she couldn't tolerate a criminal conviction? Aged 40s, earning decent money in financial services for example (where a conviction destroys career). In other words, does seller look like he/she has disincentive to lie about debt on boat?
11. Has boat been on sale for a while? So isn't a sale to pay off an urgent pressing debt. Or is it a bargain and only listed for sale last week with seller hurrying for completion?
12. You could ask seller to give you a bank ref. Plenty of banks will do this (in the form of "Mr X has been a customer for xxx years and in our dealings with him he has paid all amounts due to us. This letter is given without liability on the writer or the Bank". You could even ask seller to take out iPhone and show you instantaneous bank balance on an account of his/her choosing. A strong figure indicates absence of a pressing debt situation.

Al the above are indicators not provers but if you get the right answer on 75% of them and the wrong answer on none of them you're in good shape. Follow your gut a bit. All imho.

This is all off the cuff. Can probably think of some more and some refinements. BJB is good on this stuff and he might chip in.

Not sure I can add much, if anything, unless to say that one of the benefits of the compliance culture that nowadays surrounds everything from opening bank accounts to buying phone contracts is that electronic checks on names through, for example, LexisNexis, are much more accessible than historically, although the more corroboration from multiple sources, the better.

Also, as in the case of buying a new boat, buying a non-new, stock boat can also take a lot of worry away, if the other party to the contract is well-resourced.