When does legal title change?

[burgundyben]

So I meet a guy in a boat yard, we complete 2 copies of a bill of sale (MSF4705) , both sign it, echange copies, I hand the seller an unguaranteed personal chq for the agreed amount.

Do I have legal title at that point?

Is the risk of the chq clearance his issue?

Thanks

 

[BruceK]

That's an odd one. Typically yes and yes, but in this instance the MSF4705 clearly states:

A buyer of a British registered ship doesn’t obtain complete title until an appropriate bill of sale has been recorded with the Registry of Shipping and Seamen and a new certificate issued.

Time to call the lawyers.

 

[Medskipper]

I wouldn't hand him the keys until the money is definitely in the bank!

 

[prv]

A buyer of a British registered ship doesn’t obtain complete title until an appropriate bill of sale has been recorded with the Registry of Shipping and Seamen and a new certificate issued.

Indeed - but not all British boats are British Registered Ships. If it's not Part One registered, then that sentence doesn't apply.

(One might argue that a boat on the SSR is "registered", but I can't imagine it applies here since SSR is not proof of ownership (and says so on the certificate) and you don't send them a bill of sale when you apply.)

Assuming an unregistered boat, I don't think there's actually anything specifically boat-related about the question. It's a general legal question of whether title passes when the cheque is handed over or when it clears. Slightly surprisingly, I haven't been able to quickly google an answer to that.

Pete

 

[Firefly625]

I wouldn't hand him the keys until the money is definitely in the bank!

well if Ben is the one being handed the keys then its OK...

I wonder what the keys open?

 

[kashurst]

does anyone still uses cheques? - do a bank transfer and give it a few hours and check the money has arrived - then hand over the keys, job done.

 

[alt]

does anyone still uses cheques? - do a bank transfer and give it a few hours and check the money has arrived - then hand over the keys, job done.

Unfortunately, in Ireland, a lot of my clients still insist on paying me by cheque. It's not a 'worry' as I know they have money in the bank, but it's a fcuking pain in the 4rse

 

[ari]

Rather weirdly, I really reading that the point at which you agree to buy and the owner agrees to sell to you is when title changes (provided it isn't subject to anything, like a survey for instance).

So if you go and look at a boat, offer the owner £xx and agree to meet him a fortnight later to exchange cash for paperwork, technically the boat is yours and is your responsibility at that point - not at the point of hand-over of cash/paperwork/keys.

Always struck me as odd, but that is (so I'm lead to believe) the legal status of it.

So at the very least, make sure you have insurance in place!

 

[jfm]

Legal title can exist in registered and unregistered form. With most possessions, a TV say, which isn't registered, legal title passes when the thing is handed over. With registered property (Part 1 boats, planes, shares, registered loan notes, land etc in the UK) it occurs when the registrar enters the name of the new owner in the register

There are some incorrect statements above. Ari's 1st and 2nd sentences in #8 are very not correct. Prv's last sentence in #4 (it's either cheque handover or cheque clearance) isn't correct because it is neither of those. The quoted MSF4705 above in #2 isn't perfectly correct because it is when the entry is made in the register which will be a few minutes before the certificate is issued.

So to answer the questions: (1) yes if the boat is unregistered; no if it is part 1. (2) Question is not that clear. The risk of delay/few days in the clearance process is entirely his problem as you own the boat. Any bouncing of the cheque is obviously your problem as you have the liability to pay him

Note that I'm answering the question in as strict terms as it has been asked. I'm talking about legal title not beneficial or equitable ownership. I'm worried you have possibly asked the wrong question because legal title isn't that important in the grand scheme of things. I'm guessing you are more interested in beneficial and equitable ownership than legal title but I don't want to second guess what your question should have been. Also I'm talking UK only

 

[prv]

Legal title can exist in registered and unregistered form. With most possessions, a TV say, which isn't registered, legal title passes when the thing is handed over.

Glad you're here

So assuming an unregistered boat, is there a general principle as to what constitutes "handing over" for something large and immobile which you wouldn't normally carry away with you?

Regarding the details of title vs ownership, I guess we need to establish exactly what real-world situation the OP is interested in. Is he wondering...
- Can he (or I) pull out of the sale, or is it now final?
- Who loses out if the boat is unexpectedly damaged or destroyed at this point?
- Can I go and start making alterations to the boat regardless of what the seller thinks?

Pete

 

[jfm]

Glad you're here

So assuming an unregistered boat, is there a general principle as to what constitutes "handing over" for something large and immobile which you wouldn't normally carry away with you?

Regarding the details of title vs ownership, I guess we need to establish exactly what real-world situation the OP is interested in. Is he wondering...
- Can he (or I) pull out of the sale, or is it now final?
- Who loses out if the boat is unexpectedly damaged or destroyed at this point?
- Can I go and start making alterations to the boat regardless of what the seller thinks?

Pete

There is probably some casel law precedent on what "handing over" means; there isn't a definition. With a boat it would I guess be the handing over of the BoS and the keys, and implied or actual acceptance by seller that buyer may generally do with the boat as he wishes. The handing over of keys and BoS would be strong evidence of unregistered title passing. It's hard to see how a court would find otherwise unless there was a clear expression by seller "I own the boat till the cheque clears. When cheque clears, and not before, the boat automatically becomes yours. I'll text or email when cheque clears" but it's hard to imagine someone would take that line yet hand over the keys and BoS

I repeat that we're talking legal title only here. Or at least I am. Beneficial ownership, equitable interests, insurable risks, etc, are all different things.

As regards the 3 Qs at end of your post, I guessed similarly. If boat is unregistered then Q1 = No; Q2 = Buyer; Q3 = Yes; buyer can even set fire to it if he wants

 

[burgundyben]

well if Ben is the one being handed the keys then its OK...

I wonder what the keys open?

you'll have to wait and see.

Yes; buyer can even set fire to it if he wants

Not planning to!

It is part one registered. I am the buyer.

The reason for asking is that *I think* there is someone else keen on the boat and I don't want the sale to me to be gazumped.

Its in a tent in a yard in a million bits and there are no keys. Its blocked in by a few boats, so its not going anywhere.

 

[jfm]

OK so it is gazumping risk. The timing of when legal title passes is therefore the wrong question. The real question is can you be gazumped, and the answer is no you cannot. You already have beneficial ownership and furthermore you have in your hand the single thing needed to have legal title transferred to your name, namely the BoS. Send the BoS to Cardiff and the registrar will enter your name on the register as owner, and send you the green certificate. It is irrelevant whether seller chooses not to present the cheque. If this was the sale of land you'd have the Tr1 in your hand - same thing - think of it that way.

You're done and in great shape, and you're gazumpery free. Just submit the BoS and the eligibility paperwork faffery to Cardiff pronto, and you'll be registered as owner within a couple of weeks

 

[jfm]

Ps if tactically appropriate (I dunno the wider circs) you could install a sign on the boat saying "property of Burgundy Ben tel 07777 777777". That might put off a buyer #2 who is contemplating handing money bag #2 to seller

 

[burgundyben]

Ps if tactically appropriate (I dunno the wider circs) you could install a sign on the boat saying "property of Burgundy Ben tel 07777 777777". That might put off a buyer #2 who is contemplating handing money bag #2 to seller

Good point, but won't be required I feel.

Its all happening this coming saturday, then I'll be able to reveal the full foolishnness of the coming venture.

 

[prv]

It is part one registered.

Well, that makes things nice and simple!

Pete

 

[Nick_H]

It doesn't sound as though you need it, but if it makes you feel better to have the part 1 in your hands then the Registry does operate an express service where they turn it round same day.

 

[superheat6k]

Something at Foulkes perhaps ? Anthony has been having a few bonfires recently so beware !

 

[jfm]

It doesn't sound as though you need it, but if it makes you feel better to have the part 1 in your hands then the Registry does operate an express service where they turn it round same day.

I don't think you need it Nick. Plenty of us are happy to hand over a few million quid in return for a TR1 - no-one waits for the Land Registry to enter us as owners on the Land Register. The BoS is the same thing: it gives you an entitlement to have your name on the register, and that's all you need. The actual entry of you name on the register is oddly a sideshow compared with the right to have that happen

 

[MapisM]

The actual entry of you name on the register is oddly a sideshow compared with the right to have that happen

I perfectly see what you mean, and I would also sleep like a baby, IF the BoS were a bulletproof document - as when the sale is notarised for instance, which I guess is the case with real estate properties.
It is down here, at least - as it is also for registered boats actually, hence my doubt.
But considering that AFAIK the BoS is just a piece of paper printed from a PDF and signed by the seller+buyer, wouldn't it be possible for the seller to sign another one (or a dozen of them for that matter) with other buyers?
I understand that this would be a fraud of course, and I have zero reasons to think that BB should fear that, but I'm just wondering what would happen if the register would receive multiple registration requests for the same boat...