Loan secured against boat?

[taz]

When buying a boat is there a way of checking if the boat has finance against it? Anything similar to an HPI check on a car or bike.

If so how does it work?

 

[sailorman]

When buying a boat is there a way of checking if the boat has finance against it? Anything similar to an HPI check on a car or bike.

If so how does it work?

it is a private purchase or through a broker.
the correct term is :-
free of all "Encumbrances & Lien"
if broker he should have all paper work to hand

 

[taz]

If it were a private sale is there a way of finding out?

 

[Tranona]

If it were a private sale is there a way of finding out?

You need to check with the registrar of shipping. Most mortgage companies require secured loans to be registered, so the boat has to be on the Part 1 register. If it is not on the register it is highly unlikely (but not impossible) that there is any loan against it.

The Bill of Sale (using the model from RYA or MCA) says that the vendor is selling free of any charges or encumbrances so any unregistered debts normally stay with him.

Suggest you buy the little book from the RYA on buying and selling secondhand boats.

 

[bobgoode]

My loan company hold the original sale documents etc. Beware of a boat with only photocopies. You could write to the major companies which specialise in boat loans but they won't tell you. However a court would not look kindly if one of those companies then tried to claim on the boat.

 

[ukmctc]

The brokerage guarentees that the boat is free from any mortgage or loan, then confirmation would be the full Part1 register which you would get from the previous owner and your registration as the new owner.
SSR doesn't have this, and you would have to accept that the brokerage had done all its checks, If it was found that after purchase through a brokerage there was a mortgage then I beleive according to their paperwork its their responsibility.
I have purchased a yacht via a brokerage which owed the marina money, I paid the debt and owned the yacht outright, all debt cleared.

 

[ukmctc]

Sorry, with a private sale get a copy of a brokerage sales document, change the details ie, cooling off period, delete company/brokerage name and make sure you and the seller sign and date both copies and have them witnessed by anyone, result...same binding agreement old debts stay with the seller. Did this in Ipswich when I got my Moody33, and I also contacted Part1 register who were very helpful and did the search and had me the paperwork inside 2 days. Yacht was mine clean and clear of any debts.

 

[jonic]

Tranona has covered it really. But there is no 100% full proof method of checking as there is no central register that is compulsory for boat registration and subsequent mortgages or debts.

I am a broker so I will tell you the checks and safeguards I make.

Part 1 registration is the best bet. If the boat is on part 1 for £25 you can get a transcript of the registry. This will show any major mortgages, but it is not 100% reliable. It is pretty good though.

Check the previous Bill of Sale, check that all 64 of the 64 shares were transferred. Check the Bill of Sale registration numbers and owners details and addresses all match. Cross check against passports. Keep a copy of the passports.

I ask that all brokerage boat owners sign a declaration that contains the following wording:

5) The yacht is/ is not * encumbered with mortgages/hire purchase, duties, taxes, debts and liens of any kind.

The sales contract should contain the following or similar wording and be signed and witnessed:

be deemed to covenant that he has the power to transfer property in the vessel and that the same is free from encumbrances and liability for duties, taxes, debts, liens and the like on the said vessel.

The final Bill of Sale will have the following or similar:

Further, **I/we, as transferor(s), hereby declare that **I/we have the power to transfer in the manner described above
the above mentioned shares, and that they are free from encumbrances [save as appears by the registry of the above ship].
(delete this paragraph and initial the deletion if there are NO outstanding mortgages)

Again ensure it is signed and witnessed and check it was correctly filled in on the previous bill of sale.

You can also ring around the finance houses and ask.

Check the boat has evidence of VAT paid.

Finally ask the marina office or yard where the boat is if they have any outstanding bills.

 

[steve6367]

When buying a boat is there a way of checking if the boat has finance against it? Anything similar to an HPI check on a car or bike.

If so how does it work?

When I purchased Temeraire I wrote to the big lenders with details of the boat and previouse owners, all of which wrote back confirming they had no interest in the boat. Not 100%, but coupled with all the paperwork being in order was good enough for me.

Steve

 

[taz]

That seems to cover everything.

Thanks for your replies.

 

[kellybinns]

Thanks for help me also.