Proof Of Ownership?

[nortada]

Having only bought new boats, boats on brokerage or boats from friends, when buying a second hand boat on the open market, how do you prove that the vendor has the right to sell and that there are no outstanding liens on debts on the vessel?

 

[Mark-1]

Having only bought new boats, boats on brokerage or boats from friends, when buying a second hand boat on the open market, how do you prove that the vendor has the right to sell and that there are no outstanding liens on debts on the vessel?

I don't think you can ever 100pc prove who owns a boat (or anything else for that matter). I found out recently that even property/land transfers don't have to be notified to the land registry. I can literally give you my house right now if I want to and it will belong to you although the land registry won't be aware of it. So even the most traceable ownership available isn't 100pc traceable, let alone all the other objects in our lives, like boats etc. Hence so many boats can be abandoned and (if traced) the last known 'owner' simply says "I sold it to this bloke, not sure who he was."

Hopefully someone else will be along to inform us on searching for outstanding loans etc. Essentially an HPI check for boats.

 

[Sybarite]

Having only bought new boats, boats on brokerage or boats from friends, when buying a second hand boat on the open market, how do you prove that the vendor has the right to sell and that there are no outstanding liens on debts on the vessel?

I think a starting point would be to ask the seller to provide his original bill of sale.

 

[Irish Rover]

It would help if it was Part 1 registered [or similar in another jurisdiction]. UK Registry says re Part 1
Part I registration

Register your boat on the Part I register if you want to:

prove you own the boat
prove your boat’s nationality
use the boat as security for a marine mortgage
register a pleasure vessel
get ‘transcripts of registry’, which show the boat’s previous owners and whether there are any outstanding mortgages

 

[iLens]

You can't - even Part 1 registration is not proof of ownership. It's like a second hand car. All you can do is ask for the paper trail back to (and including) the original Bill of Sale from the manufacturer and the Vat Paid certificate. You just have to hope it has not been used as collateral for an informal loan. (If it is the subject of a real marine mortgage, the loan company would have demanded Part 1 registration and the loan will be recorded there.)

 

[Irish Rover]

You can't - even Part 1 registration is not proof of ownership. It's like a second hand car. All you can do is ask for the paper trail back to (and including) the original Bill of Sale from the manufacturer and the Vat Paid certificate. You just have to hope it has not been used as collateral for an informal loan. (If it is the subject of a real marine mortgage, the loan company would have demanded Part 1 registration and the loan will be recorded there.)

I recall having this debate with Tranona who is badly missed on this forum. Part 1 is as good as it gets and I'd be amazed if anyone ever got caught out buying from the registered owner on Part 1.

 

[AndrewB]

Having only bought new boats, boats on brokerage or boats from friends, when buying a second hand boat on the open market, how do you prove that the vendor has the right to sell and that there are no outstanding liens on debts on the vessel?

This is probably the main argument for buying through a (reputable) broker - that they will guarantee the ownership.

When I last bought privately I did a lot of legwork to check the owner was legit and there were no liens on the yacht. Impossible to prove absolutely, really it rested on the owner's reputation - and not surprisingly he was taken aback at the enquiries I was making.

 

[Irish Rover]

This is probably the main argument for buying through a (reputable) broker - that they will guarantee the ownership.

I would have thought that too until I bought through Williams and Smithells in Lefkas in 2017 and found that the vendor on the contract and Bill of Sale which they furnished to me only owned 50% of the boat as per the previous Bill of Sale - they didn't even spot this when they gave me the previous BOS and then tried to bluff me until I got the brokers association involved. So my advice would be don't take anything you get from a broker as genuine unless you've checked it out fully yourself.

 

[davidej]

This is probably the main argument for buying through a (reputable) broker - that they will guarantee the ownership.

When I last bought privately I did a lot of legwork to check the owner was legit and there were no liens on the yacht. Impossible to prove absolutely, really it rested on the owner's reputation - and not surprisingly he was taken aback at the enquiries I was making.

Does a broker guarantee ownership?

I don't think so. The best you can hope for is that he is more experienced and thus more likely to spot a scam

 

[prv]

This is probably the main argument for buying through a (reputable) broker - that they will guarantee the ownership.

I rather suspect that they will specifically *not* guarantee the ownership. They certainly put that kind of wording on their initial listings.

All of the suggestions here help - very much including a broker, as they are likely to spot irregularities - but I don't believe any of them alone provide perfect security.

Pete

 

[Graham376]

Having only bought new boats, boats on brokerage or boats from friends, when buying a second hand boat on the open market, how do you prove that the vendor has the right to sell and that there are no outstanding liens on debts on the vessel?

There's no 100% way. Easy to check documentation (marina receipt, SSR, radio license etc.) is in the name of the seller, which goes some way in establishing his/her title but, it could also have been sold to someone else the week before or, have an unlisted bank loan attached. Many years ago, I took out a small bridging loan to buy a boat before existing was sold and the bank had me sign a document giving them a charge on it, which wouldn't have shown up in any type of search. Sadly, because of all the scams around, we can no longer rely on people being honest without proof.

 

[Daydream believer]

A friend of mine bought a boat & some time after a mortgage Co came after him for £ 30K.
He had to pay it as the boat was worth much more.
The previous owner had moved abroad & solicitors advised my friend that it would be a waste of time trying to trace & pursue him for the money

 

[Kukri]

There is rather a lot of mistaken information being propagated - with the best of intentions - on this thread.

Buying and selling merchant ships for my employers is a part of my day job and has been for decades so I think I am likely to be right. Nobody spends tens of millions of shareholders' money and bank loans on a ship without being rather sure about the title to it. I have confined the answer to the UK Registers and to English law.

The SSR is not - ever - proof of title.

A Part One Certificate of Registry isn't, either, nor are past Bills of Sale, but what IS good proof of title is a Transcript of the Register dated as close to the sale as possible. A reputable broker will supply one dated just before the closing meeting. If this is not done, as eg in a private sale, then the buyer must obtain one from the Registry of Shipping and Seamen
- who charge for these.

Even a current Transcript will only record the names of the registered owners and their shares in the vessel and any registered mortgages or charges. It will not show other liens, and whilst most liens are cleared off by a sale for value without notice, two types of lien are not. These are:

- a shIp repairers' possessory lien for as long as the vessel is in the possession or custody of the repairer (ie the boatyard or marina)

- a maritime lien. These do not need to be registered, and will survive sale to a bona fide purchaser for value without notice, but in English law (caution - NOT American law!) the only maritime liens that you need worry about are for collision damage to another vessel or other property, salvage, and crew wages. In American law the situation is very different and pretty well any debts incurred by the previous owner give rise to maritime liens.

 

[AndrewB]

I rather suspect that they will specifically *not* guarantee the ownership. They certainly put that kind of wording on their initial listings.

All of the suggestions here help - very much including a broker, as they are likely to spot irregularities - but I don't believe any of them alone provide perfect security.

Pete

Perhaps 'guarantee' was the wrong word, and 'insurance' would have been better. ABYA (Association of Professional Yacht Brokers), to which reputable brokers will belong, say that their members give "the new owner clear legal title" and that they must have "indemnity insurance" which I was told, when I last bought a yacht (through Pinnacle Yachts), covered this risk. Was I being naive?

 

[prv]

what IS good proof of title is a Transcript of the Register dated as close to the sale as possible. A reputable broker will supply one dated just before the closing meeting.

Thanks Minn - always good to have an expert answer

Do you happen to know if brokers providing the transcript of register is standard for yacht sales where the boat's Part 1 registered, or are you talking more about shipping practice?

Pete

 

[prv]

A friend of mine bought a boat & some time after a mortgage Co came after him for £ 30K.
He had to pay it as the boat was worth much more.

Minn's answer makes this one interesting.

Was the boat Part 1 registered? We always hear that mortgage lenders will insist on this, and according to Minn the mortgage charge will be shown on the register. So the most likely situation seems to be that it was a private sale/purchase and he wasn't aware of the need to check the register for charges?

Our boat wasn't registered so there was nothing to check, but each time I've done a property transaction that should have changed the register, I've queried the Land Registry a couple of days later to ensure it's correct. In one case the bloody useless solicitor had forgotten to send the form, so it's lucky I did or I wouldn't own my house...

Pete

 

[Sybarite]

As a back stop (....) ask the seller to provide a guarantee of ownership including indemnity clauses should ownership be called into question...??

 

[rotrax]

We bought our last yacht privately from the first owner.

As it was-for us-a great deal of money, we asked John Rodriguez of John Rodriguez Yachts to attend to the paper trail and conveyencing. He charged a flat fee which was worth every penny for our peace of mind.

Highly reccomended if you require as much certainty as possible and the benifit of indemnity insurance.

 

[Resolution]

Many second hand yachts are not Part 1 registered, probably most are merely SSR which is no proof of title at all. When I was working in a brokerage business quite a few years ago we spent a considerable amount of time checking out with each and every maritime lender whether they had a mortgage on any of the yachts currently on our For Sale list. Not foolproof, but cleared the majority of cases.

 

[jonic]

Thanks Minn - always good to have an expert answer

Do you happen to know if brokers providing the transcript of register is standard for yacht sales where the boat's Part 1 registered, or are you talking more about shipping practice?

Pete

For pleasure yacht sales, we always apply for and provide a transcript of registry if the vessel is on Part 1.