hullabaloo
Well-Known Member
Is there anywhere we can search to see if a boat has outstanding finance? like an hpi search ?
or is it don't buy without a broker ?
or is it don't buy without a broker ?
How do you know if a boat has outstanding finance ?
- Thread starter hullabaloo
- Start date
ari
Well-Known Member
In a word, no. (And neither can a broker).
If the boat is full part one registered you can obtain a transcript of registry which will detail a marine mortgage, but if someone wants to sell you a boat with finance on that is part one registered, it's a moment's work to remove the registration mark (if it was even ever applied in the first place) and change the name and there is no way of searching the register without these.
If the boat is full part one registered you can obtain a transcript of registry which will detail a marine mortgage, but if someone wants to sell you a boat with finance on that is part one registered, it's a moment's work to remove the registration mark (if it was even ever applied in the first place) and change the name and there is no way of searching the register without these.
Tranona
Well-Known Member
If the finance is with a reputable finance house then it will either require Part 1 registration and register the mortgage or will retain the key documents - Builders Certificate, Bills of sale, VAT receipt as security so the chances of this type of finance being hidden are low. However, there is always the possibility of unregistered charges against the boat or third party interests that are not recorded. By their nature these are difficult to find, so equally difficult to enforce.
The key thing is to always look for complete original documents before you pay any money. Using a broker may help as they are more likely to spot something out of order than an individual buyer.
jrudge
Well-Known Member
If the boat is on part one then the charge will be listed in the registry.
Lenders ( I used to run one) will led smaller amount on small boats simply by holding the documents of title. We used to lend upto £25k in this manner where the overall cost of registration was disproportionate to the overall transaction.
As such if you have the docs of title OR the boat is on part 1 and clear you can be fairly certain it is not on finance.
However.... others may have a lien on it for unpaid bills which you will only find out the day someone makes a claim. I dont recall it ever having happened to anyone on here so it is not that common.
Overseas registries will vary.
Lenders ( I used to run one) will led smaller amount on small boats simply by holding the documents of title. We used to lend upto £25k in this manner where the overall cost of registration was disproportionate to the overall transaction.
As such if you have the docs of title OR the boat is on part 1 and clear you can be fairly certain it is not on finance.
However.... others may have a lien on it for unpaid bills which you will only find out the day someone makes a claim. I dont recall it ever having happened to anyone on here so it is not that common.
Overseas registries will vary.
MapisM
Well-Known Member
Easy, just buy an IT flagged boat.
Any outstanding finance must be transcribed on the boat docs, under pain of nullity.
Any outstanding finance must be transcribed on the boat docs, under pain of nullity.
jfm
Well-Known Member
Scuse the pedantry, and I agree your general conclusion, but:
1. Part registry merely grants the facility to register a charge; there is no compulsion to register it
2. A lien in the uk is merely a right to retain lawful possession, not a right to take possession. Most obvious case is a ship yard retaining posssion until repair bills are paid.
jfm
Well-Known Member
Take care. An Italian court may nullify an Italian law finance claim if not registered, but a uk court won't. So if say the owner of IT flagged boat ran up a bad gambling debt at the weekend and promised the IT flagged boat as security to his opponent, a UK court will uphold that. Obviously there would need to be uk nexus but international people/transactions often have that .
Unlikely I agree. I'm just making the point that there is no 100% bullet proof way to buy a used boat
hullabaloo
Well-Known Member
MapisM
Well-Known Member
While generally speaking I can't argue with your conclusion, also because I can't think of ANYTHING in life which is 100% bullet proof
D), I'm a bit puzzled from the potential concern in your example.Let's assume that Mr.X, proud owner of an IT registered boat, promises her as a security to Mr.Y - possibly also in written (but obviously without any transcription on the boat papers).
X loses his gamble with Y, which should therefore take ownership of the boat.
But the following day, X sells the boat to Mr.Z, without disclosing anything about his promise to Y.
Let also assume that both Y and Z are Brits.
Mr.Z, being well aware of IT law, makes all the normal due diligence, which confirms the absence of any encumbrances. Therefore, he finalizes the purchase and puts a red duster on the thing.
Now, if I understand what you are saying, a UK court, instead of prosecuting X for his fraudulent behavior, could confiscate the boat to the poor Z and assign it to Y instead?
If that is the case, frankly I must reconsider my view on the UK legal system, and not for the better... :ambivalence:
MapisM
Well-Known Member
Based on what jfm said, the best advice is to forget boats altogether, I reckon!
An advice that can only be strengthened if we should apply common sense, btw...
Tranona
Well-Known Member
Depends on what you mean by 50/50.
In reality there are very few issues with finance on boats. Thousands change hands every year without difficulties. Follow the basic rules and if anything looks out of line walk away.
jfm
Well-Known Member
That isn't what I saidWhile generally speaking I can't argue with your conclusion, also because I can't think of ANYTHING in life which is 100% bullet proof
Let's assume that Mr.X, proud owner of an IT registered boat, promises her as a security to Mr.Y - possibly also in written (but obviously without any transcription on the boat papers).
X loses his gamble with Y, which should therefore take ownership of the boat.
But the following day, X sells the boat to Mr.Z, without disclosing anything about his promise to Y.
Let also assume that both Y and Z are Brits.
Mr.Z, being well aware of IT law, makes all the normal due diligence, which confirms the absence of any encumbrances. Therefore, he finalizes the purchase and puts a red duster on the thing.
Now, if I understand what you are saying, a UK court, instead of prosecuting X for his fraudulent behavior, could confiscate the boat to the poor Z and assign it to Y instead?
If that is the case, frankly I must reconsider my view on the UK legal system, and not for the better... :ambivalence:
. Of course X would be prosecuted in uk if he committed a crime on uk soil, or handed over to Italian authorities if he committed a qualifying crime on Italian soil English law is rock solid fair, but it makes people responsible for their own actions and their own deals. In your post you are very focussed on the unfairness to Z and think it shouldn't happen, but you seem to discount the unfairness to Y ( sorry if I'm misunderstanding or mis-stating). Do you really think Z should keep the boat when it was already pledged to Y before Z came on the scene? You think the state should wipe Z's bottom for him when he did inadequate due diligence? English law would say that Z specced his own handcart so he must go wherever it takes him.
D
Deleted User YDKXO
Guest
Part 1 registration is no guarantee that finance is not outstanding on a boat. It will give details of a marine mortgage but nothing else and brokers will not be able to find out more than you can. I once bought a boat from a finance house who had repossessed it because of non payment of the mortgage. During the negotiation process it turned out that the owner had also used the boat as security for a business loan and had outstanding boatyard debts too. After much wrangling, I bought the boat on condition that the finance house gave me a written guarantee in writing that the boat was being sold to me free of all liens and debts and confirming that they would settle any such liens and debts if they came to light in the future. I'm not sure whether that was a cast iron legal document but I took the risk because the boat was a bit of a bargain. As it turned out I ended up owning that boat for 4yrs without any issues and it remains the only boat I've ever owned which I sold at a significant profit so the risk paid off
My advice to any buyer who has the slightest concern about a boat they are buying being subject to outstanding finance or debt is to remove it immediately on the day you buy it from its mooring, change its name and its appearance (eg change colour of covers/cushions). And if possible get it out of the country in which you bought it asap
My advice to any buyer who has the slightest concern about a boat they are buying being subject to outstanding finance or debt is to remove it immediately on the day you buy it from its mooring, change its name and its appearance (eg change colour of covers/cushions). And if possible get it out of the country in which you bought it asap
MapisM
Well-Known Member
But that's the point, J: in my previous set of assumptions, Z did a perfectly adequate due diligence, if you re-read what I wrote - and if you can think of anything else he could/should have done, I'd be curious to hear it.
In fact, if anything, it's Y who didn't do enough to secure his right towards the security promised by X, because aside from whatever X could have written and signed (possibly including in his promise also the Rome's Coliseum!
), Y should have asked X to hand him over the boat "blue book", there and then.Therefore, IF (in fact, I've yet to understand if that's what would actually happen, in this case) English law would consider of higher priority the pledge to Y just because it happened before the boat sale to Z, in spite of the fact that Y didn't do anything to secure his credit and Z didn't have a snowball's chance in hell to discover its existence, well, then the law would do precisely what you are saying that it doesn't want to do, i.e. wipe Y's bottom.
All these speculations aside, of course I can see your point, in principle.
But what I can't for the life of me understand is that since in this situation the law MUST wipe someone's bottom (it's just a matter of whether Y's or Z's), which would be the "rock solid fair" alternative, in English law?
ari
Well-Known Member
The phrase 'due diligence' seems to get bandied around a lot whenever this subject crops up, but what little due diligence can be carried out does seem to rely entirely on (for example) the bloke dishonest enough to flog a boat with £100K of finance outstanding being simultaneously honest enough to admit that it is Full Part One registered, enabling you to trot off and search it.
As to getting original Bills of Sale, they're available for download on the MCA site, how many would you like? (Again, fingers crossed that the bloke dishonest enough to flog a boat with undeclared outstanding finance is too honest to print one off, date it six years ago and bang a moody signature on it).
You could of course insist on every Bill of Sale right back to, and including, the original Builder Certificate, and the original VAT receipt naturally. If you're prepared to wait a decade you might even find a boat that you want that has all of those things!
Even then, that still won't protect you one jot if it's been Part One registered (as part of the seller getting the mortgage) but not admitted to. The registrar doesn't keep those documents, they get returned to the owner, so he'll have them to pass on to you.
Most people seem to regard it as a non issue but it scares the hell out of me. I was quite relieved when the last boat I bought had finance on it (which was cleared by the broker). At least if you know it is there you can ensure that it is being dealt with properly (ie cleared by the broker with the balance sent to the seller).
It's when you're told 'there's no finance' on your potential purchase that you really have to cross your fingers and hope it's true!
As to getting original Bills of Sale, they're available for download on the MCA site, how many would you like? (Again, fingers crossed that the bloke dishonest enough to flog a boat with undeclared outstanding finance is too honest to print one off, date it six years ago and bang a moody signature on it).
You could of course insist on every Bill of Sale right back to, and including, the original Builder Certificate, and the original VAT receipt naturally. If you're prepared to wait a decade you might even find a boat that you want that has all of those things!
Even then, that still won't protect you one jot if it's been Part One registered (as part of the seller getting the mortgage) but not admitted to. The registrar doesn't keep those documents, they get returned to the owner, so he'll have them to pass on to you.
Most people seem to regard it as a non issue but it scares the hell out of me. I was quite relieved when the last boat I bought had finance on it (which was cleared by the broker). At least if you know it is there you can ensure that it is being dealt with properly (ie cleared by the broker with the balance sent to the seller).
It's when you're told 'there's no finance' on your potential purchase that you really have to cross your fingers and hope it's true!
D
Deleted User YDKXO
Guest
Me too. I have bought and sold a large number of used boats in my boating career and the more I learn about the whole buying and selling process, the more it scares me. In the end there are no real legal protections and the buyer (and seller) have to look out for themselves. For me it comes down to possession being 9/10ths of law which is why I said above that any buyer should take possession of a boat on the day they pay for it and take all measures they can to remove it
What often gets lost in these discussions is that buying a boat is not comparable to buying other consumer goods because of the amount of money at risk. Used boats routinely change hands at prices well in excess of what the average house in the UK costs and yet the whole process is so amateurish
petem
Well-Known Member
AFAIK, Bills of Sale don't have to be registered / stamped by the MCA. How do you download the ones that have?
FWIW, I have all Bills of Sale for my boat, the original VAT invoice and Builder's Certificate plus it's P1 registered do boats like this do exist.
ari
Well-Known Member
You can't, but why would you want to? As you said yourself, they don't have to be.
You're absolutely right, there are boats with all the paperwork and that's reassuring, but it doesn't prove a thing. Let's say you paid cash for your boat and it was unregistered or SSR (lots and lots are). You could take out a marine mortgage for £100K tomorrow against it because your business is struggling and the cash injection will save it, bank would Part One the boat, register their interest, all lovely and above board.
12 months later, your business is still struggling, you need more cash, got to flog the boat. Ah, but there's that pesky loan to clear, dammit. No problem, sell the boat, keep the repayments going, get the business turned around, pay off the loan then, no harm done.
So I'm buying the boat - has it got finance? 'Err, no, no it's all clear, I paid cash'. Have you got all the paperwork? 'Sure have, all Bills of Sale for my boat, the original VAT invoice and Builder's Certificate'. Brilliant, is it registered? 'Erm, just SSR'. Okay that's entirely normal, no problem.
Now, lets say I get super duper 'due diligent'. Speak to the broker that sold it you maybe, did PeterM pay cash for this? 'He sure did!' Awesome. I might even ask you to show me your bank statement showing the money going out for the boat. No problem, you've got that.
Hurrah, due diligence done, all paperwork totally in order, confirmation from broker you paid cash even, blimey I've even seen your bank statement proving it. Happy days.
I buy boat, you carry on paying the loan and saving your business, everyone is happy.
Six months later you go bust anyway, bank turns up, tells me the boat owes them £100K. And I own the boat, so I owe them £100K...
Just one example of how very easily it could happen. As I said before, if it's a substantial amount, chances are the bank will Part One it and register the loan. But then the buyer is ENTIRELY reliant on the seller (who is dishonestly selling a boat with finance still on it) admitting that it's registered.
No way of finding out otherwise if the carving and marking note hasn't been attached (which is very often the case even with entirely legitimate boats and people because many just don't bother. Chuck it in a locker, if they get it done at all).
Tranona
Well-Known Member
In your doom laden scenario you are making an assumption that the loan is a charge against the boat. No sensible lender would lend that amount of money against the security of a boat without having control of this security for the very reasons you state. Either it will require the boat to be registered and the mortgage registered against it or it will take control over the documents to prevent a sale without its permission.
Your crooked vendor may well attempt to build a false document trail, but it is highly likely that there will be a hole somewhere in it that will raise suspicions when you or the broker carry out due diligence on both the boat and its owner. If it comes to court it is unlikely that the lender will be able to enforce his loan if you can show that you bought in good faith - that is you took the appropriate actions to verify that there were no charges against the boat. Remember also that the vendor has already signed that there are no charges against the boat so he is already in the wrong.
Being cautious is of course the right approach as there are dodgy people around, but you can let your imagination run riot and I would guess that your imagined scenario is one of the more unlikely to exist for real.
jfm
Well-Known Member
Tranona, I don't agree your views on Ari's post:
Re yr 1st para, of course Ari is assuming the loan is secured by the boat. That's the whole point. Of course the lender has registered the charge on P1, but Ari's point is that the seller can pass off the boat as non P1 registered and unfortunate buyer will not know that seller is telling lies.
Re yr 2nd para, in Ari's perfectly plausible fraud there is no need for an incriminating document trail. Ari's method is easy to execute. And there is no way a UK court will rule in favour of the duped buyer as you suggest, no way. As well as the law, the public policy aspect will force the court to rule that the duped buyer loses out, not the lender. Otherwise you destroy the UK finance industry which adversely impacts millions of people. Sure the lying seller is in trouble (criminal) but that is 100% beside the point in Ari's scenario
So I don't think ari's imagination is running riot.
Re yr 1st para, of course Ari is assuming the loan is secured by the boat. That's the whole point. Of course the lender has registered the charge on P1, but Ari's point is that the seller can pass off the boat as non P1 registered and unfortunate buyer will not know that seller is telling lies.
Re yr 2nd para, in Ari's perfectly plausible fraud there is no need for an incriminating document trail. Ari's method is easy to execute. And there is no way a UK court will rule in favour of the duped buyer as you suggest, no way. As well as the law, the public policy aspect will force the court to rule that the duped buyer loses out, not the lender. Otherwise you destroy the UK finance industry which adversely impacts millions of people. Sure the lying seller is in trouble (criminal) but that is 100% beside the point in Ari's scenario
So I don't think ari's imagination is running riot.
