reposessed boat

[mad_boater]

I am about to buy a boat(subject to survey).Looking at the post about a reposessed boat has got me worried.What is the best way of establishing owneship of boats.Is there a foolproof way of finding out?Any advise would be gratefully received.
Thanks

 

[PaulGooch]

I am about to buy a boat(subject to survey).Looking at the post about a reposessed boat has got me worried.What is the best way of establishing owneship of boats.Is there a foolproof way of finding out?Any advise would be gratefully received.
Thanks

Nothing foolproof. Documented chain of ownership is important, original and any subsequent sales invoices showing the full chain of ownership. Originals, not copies.

 

[Tidnock]

No expert on the subject in relation to boats and i may get shot down for this.

Why not put a nominal amount on hire purchase finance, the finance company will do the checks as they will have an interest in the boat, if it goes wrong you and the finance company share the problem, just a thought.

 

[Canopy Locked]

Don't know there is a foolproof way, but for the last 2 boats that I have bought, I insisted on the seller completeing a simple form, "Declaration of No Liens" signed by the seller and witnessed in exactly the same way as the Bill of Sale.

Not sure how this would stand up, but it would give you a starting point on which to base a defence

 

[Tranona]

I am about to buy a boat(subject to survey).Looking at the post about a reposessed boat has got me worried.What is the best way of establishing owneship of boats.Is there a foolproof way of finding out?Any advise would be gratefully received.
Thanks

Go onto the RYA site, buy their little book on the process and you will be as well informed as anybody else. There is no mystery, just follow the check list and ask the seller/broker if you are not sure about anything. If a broker is handling the sale, he will have made sure all the documents are in place, although it is still your responsibility to satisfy yourself. The Bill of Sale should use the MCA or RYA template and the seller signs that the boat is free.

As i said in the other thread, nothing is absolutely risk free, but thousands of boats change hands every year without any problems.

Enjoy the process of buying your boat!

 

[mad_boater]

Thanks for the input,The amount is quite substantial so I am going to grill the owner, apparently he bought it through his company and has the documents to prove it is paid for. I don't know if this will be a problem.

 

[Latestarter1]

Thanks for the input,The amount is quite substantial so I am going to grill the owner, apparently he bought it through his company and has the documents to prove it is paid for. I don't know if this will be a problem.

I was going to say ignore the thread about the reposessed boat as the the account is so lacking in 'key facts' as to be worthless.

Transfer of title is the same for any 'chattel' in English law, seller can pass on no better title than they already have. Transactions between private indivdiuals are rarely represent a problem as there is a good level of protection for the purchaser under Common Law and various iterations of Sale of Goods Acts regarding monies secured by the bailor against against chattels.

However you have uttered the magic words 'bought it though his company'. A corporate purchase generally infers a Chattel Mortgage normally only available to a corporate body and not a private individual. Although based on English Common Law a Chattel Mortgages are a minefield, with a slightly different meaning if you are in England as opposed to Australia or U.S. I would not consider such a purchase without professional legal assistance.

 

[jfm]

I was going to say ignore the thread about the reposessed boat as the the account is so lacking in 'key facts' as to be worthless.

Transfer of title is the same for any 'chattel' in English law, seller can pass on no better title than they already have. Transactions between private indivdiuals are rarely represent a problem as there is a good level of protection for the purchaser under Common Law and various iterations of Sale of Goods Acts regarding monies secured by the bailor against against chattels.

However you have uttered the magic words 'bought it though his company'. A corporate purchase generally infers a Chattel Mortgage normally only available to a corporate body and not a private individual. Although based on English Common Law a Chattel Mortgages are a minefield, with a slightly different meaning if you are in England as opposed to Australia or U.S. I would not consider such a purchase without professional legal assistance.

I'd say the opposite. If a (UK) company owns the boat it would have to disclose any security given to a lender over the boat at Companies House. A failure to record such security at Companies house is an offence by ALL the directors and secratary (so to defraud you the guy selling the boat would have to involve others in his fraud, and why would they agree?). And the lender would be deemed to be on notice that the company had failed to record the pledge at Companies House, which would weaken their enforcement of their security if it came to that

So, on the security thing, I think you're much better buying from a company than a private person

If you tell us the name of the company we can see in 5 mins online whether there is a recorded pledge against the boat (though I can't cos I'm away from office for week or two; someone else might have an industrial-strength subscription to Co House)

 

[Tranona]

In addition to the ownership and mortgage issues, you need to ensure that VAT has been accounted for properly. If the company that owns it is VAT registered and the boat was a company asset then you should receive an itemised VAT receipt showing full details of the boat. You can do no more, as it is the vendor's (or his company) responsibility to account for the transaction correctly in his VAT return.

 

[watersideboatsales]

Hi Mad_boater,

Always happy to give out a bit of free advice, if you would like a chat please do not hesitate to give us a call.

My office number is 02392 377466

 

[jfm]

Hi Mad_boater,

Always happy to give out a bit of free advice, if you would like a chat please do not hesitate to give us a call.

My office number is 02392 377466

Better to put the advice on here, on open forum?

 

[jfm]

Don't know there is a foolproof way, but for the last 2 boats that I have bought, I insisted on the seller completeing a simple form, "Declaration of No Liens" signed by the seller and witnessed in exactly the same way as the Bill of Sale.

Not sure how this would stand up, but it would give you a starting point on which to base a defence

Be careful Rob. A lien is a different thing in law from (a) a mortgage and (b) other legal procedures that can allow someone to take possession of your boat. A lien is merely a very specific subset of the pitfalls

 

[jfm]

The Bill of Sale should use the MCA or RYA template and the seller signs that the boat is free.

Be careful Tranona. The MCA BoS only confirms the boat is not subject to a mortgage, and a registered mortgage at that. A mortgage is a different thing in law from (a) a lien and (b) other legal procedures that can allow someone to take possession of your boat. A mortgage is merely a very specific subset of the pitfalls, and a registered mortgage is merely a subset of all mortgages, as the Duncan thread shows!

 

[jfm]

By the way, here's how to ensure there are no liens on a boat that you are buying. Forget pieces of paper "declaring no liens" or whatever. They're worth the paper they're written on. On the day of completion, be prepared to pay by bank transfer (or cash or bank draft, if the parties prefer). Meet seller at Marina X that morning, on the boat. Have him drive the boat just along to the next port or marina, marina Y say. Choose marina Y so it is not in the same ownership as marina X (ie beware of the big groups like MDL or Premier Marinas, etc). Then call your bank or internet them to tell them to transfer the money. Have lunch. When the money lands in seller's account, take the ships papers and actual possession, and the boat is yours utterly free of any possible lien, even if it has a string of unpaid shipyard charges.

The reason this works is that liens merely allow the person who is owed money to retain lawful possession, not to take possession. The action of driving the boat to marina Y means they no longer have possession, so they cannot possibly retain it. Hence, as the boat drives out of marina X all liens (if any exist0 lawfully come to an end and the ex-holders of those liens may not re-take the boat.

Of course, if the owners of marina X refuse to let the guy drive the boat to marina Y then you can smell a rat

I'm talking UK law only.

 

[Tranona]

Thats interesting. As you may remember, I bought my boat in Greece and my Bill of Sale uses the term "free from incumbrances (sic)". I also have a Certificate of Boats Proprietary Title from the Greek Registrar which uses the term "did not bring any burden" - and confirmation from the Bank that the mortgage had been paid. And all the documents have many official stamps (five on the Bill of Sale alone).

I assume all this is pretty watertight as I would not want to get involved in any legal proceedings in Greece!

 

[jfm]

Thats interesting. As you may remember, I bought my boat in Greece and my Bill of Sale uses the term "free from incumbrances (sic)". I also have a Certificate of Boats Proprietary Title from the Greek Registrar which uses the term "did not bring any burden" - and confirmation from the Bank that the mortgage had been paid. And all the documents have many official stamps (five on the Bill of Sale alone).

I assume all this is pretty watertight as I would not want to get involved in any legal proceedings in Greece!

Yup, your paperwork sounds good. I guess what I was alerting people to is that the downloadable UK BoS on the MCA website (which most of us use I think) merely says "free of registered mortgage", which is pretty dumb, huh?

 

[Observer]

Yup, your paperwork sounds good. I guess what I was alerting people to is that the downloadable UK BoS on the MCA website (which most of us use I think) merely says "free of registered mortgage", which is pretty dumb, huh?

Not quite. The operative language of the MCA BoS reads as follows:

In consideration of (**the sum of) [amount] **paid/given to **me/us by: [purchaser]
the receipt of which is acknowledged, transfer [no. of shares] share in the above ship and its appurtenances to the transferee(s).

IF ANY REGISTERED MORTGAGE IS OUTSTANDING YOU MUST TICK THIS BOX [box]

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)

It's not the best drafted language but I suppose does the job - sort of.

 

[Observer]

Thats interesting. As you may remember, I bought my boat in Greece and my Bill of Sale uses the term "free from incumbrances (sic)". I also have a Certificate of Boats Proprietary Title from the Greek Registrar which uses the term "did not bring any burden" - and confirmation from the Bank that the mortgage had been paid. And all the documents have many official stamps (five on the Bill of Sale alone).

I assume all this is pretty watertight as I would not want to get involved in any legal proceedings in Greece!

Tranona,

I'm not sure, but I get the impression that you believe, if a Bill of Sale states that "title is unencumbered" (or words to that effect), title actually IS unencumbered. It's not (necessarily), even (I suspect, but would not be certain) with five (or fifty) official stamps. I know zilch about bills of sale in Greek law but my guess is that the official stamp merely validates that the B of S has been registered under some specific Greek regulatory requirement. It used to be the case, in English law, that a B of S had to be stamped (i.e. stamp duty paid on it), although there was a longstanding exemption for ships, so the presence of an official stamp may well have no greater significance than that it has been stamped or registererd in the prescribed way.

A statement "free from encummbrances" or (better in English law) "with full title guarantee" is simply a representation/warranty by the seller (albeit, in the latter case, one that has a specific leagl meaning that is wider than the actual words) and is worth no more (and no less) than the seller's ability to back it up, if called upon to do so. If the representation is false, you will certainly have recourse against the seller, if he can be found and, if found, has any worth.

Just wanted to clarify this in case other readers get a mistakenly inflated impression of this type of title warranty.

 

[Tranona]

Thanks for your observations. I was not expressing an opinion as to the strength of the statements, rather reporting practice in another regulatory regime.

In Greece all boats have to be registered and have a number. All changes in ownership have to be formally registered. All charges against a boat have to be registered. Very Bureaucratic. Bills of Sale have to be witnessed by Port Police in the Port where the transaction takes place (or in a Greek consulate) - this may only apply when the buyer is non-Greek, but not sure on this point. The Registrar confirms all debt has been cleared. In my case I knew the boat would have a mortgage on it while it was being used as a charter boat, so my contract required independent confirmation from the bank when the mortgage was cleared.

The observation about the stamps is merely an observation about the Greek official processes. Incidentally they needed to know the first name of both my wife's and my fathers - there was a box on the form for it and a stamp to confirm the names!

Just in case anybody here thinks such a system might be the answer here, original registration cost me about £900 and deregistration and transfer if title £650! Imagine the uproar if such charges were suggested here - never mind the six weeks the process took.

 

[grumpy_o_g]

I would have thought a boat with finance or that is repossessed is about as good as you can get without knowing the full history. Surely that means someone's done the work to sort out the finance, or am I using false logic?