Boat Owner Background Search
How to perform a boat owner background search lookup check.
A boat owner background check is one of the more crucial and yet often ignored aspects of any purchase or financing transaction. The consequence of what happens in the event of hidden liens, title deficiencies, non-disclosures, and fraudulent actions can not be understated. This is because boat title insurance is not currently an option within the marine industry. Any recourse must accordingly fall within the scope of those representations, warranties and guarantees made on behalf of the owner. These are, of course, meaningless if such party can not be subsequently found, is unwilling to cooperate or lacks the wherewithal to make good on any title deficiencies and hidden claims.
Where to Begin
Gathering the most current and reliable
background information on any boat owner can be somewhat challenging
considering privacy regulations now in effect. However, this may be a
worthwhile endeavor depending on the risk factors involved and your
familiarity with the owner.
Definition: For the purpose of
these guidelines, the term "owner" may relate to a sole individual, multiple
individuals or a legal entity.
Risk Factors: The risk involved in
not exercising due diligence when it comes to knowing the owner could be
substantial given the high value of most boats. Your investment may be in serious jeopardy should
you end up with a boat that was stolen, used in running contraband, other illegal activities,
or is subject to hidden liens. These, along with fraudulent title representations and intentional non-disclosures, can make it extremely
difficult when it comes to recovery. Recourse against a party that has
engaged in such activities may prove less than attainable.
Owner Evaluation: An owner background check may be unnecessary if you
are familiar with the owner and have good reason to believe such party is
trustworthy. Another factor to consider is the owner's demeanor and
willingness to cooperate in providing everything required in conducting a
thorough title search. Any hesitation whatsoever should be met with a great
deal of concern.
Performing a Title Search
The first order of business
in any pre-owned boat transaction is that of conducting a comprehensive
title search. If properly implemented, this will identify the most recent
owner of record and in the case of USGG documented vessels may offer a
complete chain of ownership. Although this typically provides a basis for an
owner background search, it may require further investigation when there are
subsequent non-recorded owners. In any event, it is the most current owner
who would typically provide any assurances of a valid and lien free
title.
Identifying the Guarantor:
Ownership of a boat may
consist of a sole individual, multiple individuals or a legal entity.
Working directly with a sole individual is of course much easier than dealing with
multiple parties or a legal entity. In these cases, there are some
additional factors that may come into play with respect to representation.
Sole Individual:
In gathering information about a sole individual, you should obtain a copy
of such party's driver's license or state issued identification card. This
in addition to any aliases or common bynames, a previous address, phone
number and email address.
Multiple Individuals: When dealing with
multiple individual owners you will need gather the same information from
each as that for a sole owner.
Legal Entity: If the boat is owned
by a legal entity such as a corporation or limited liability company, you
will need to obtain its full legal name, where registered, inception date, a
business number if applicable, and physical address.
Owner's Agent:
Owners agents such as those acting under a power of attorney or duly
appointed entity representatives are not typically viewed in themselves as
the guarantor. They are merely executing documents on behalf of the owner.
In these cases, however, you should take appropriate steps in verifying
their given authority.
Closing Agent: Independent
closing, settlement and escrow agents represent all parties to a transaction
and do not typically have delegated contractual authority. As a matter of
course, they do not initiate full background checks on any of
the respective guarantors.
Boat Broker: Boat brokers often act as
closing agents for their own sales transactions. However this may pose a
conflict of interest under some circumstances, especially when they are also
the listing agent. In any event, they do not usually step into the
chain of ownership or act as a guarantor of title Brokers do not
usually perform full background checks on any of their transactions.
Auctioneer:
Salvaged, damaged and foreclosed boats are often sold at auction. In these
situations, an auctioneer simply provides a bidding service and does not
typically function as a broker or guarantor of title. At
best, it will pass on any title release or transfer documents provided by
the seller. Buyers should be extremely cautious under these circumstances in
determining exactly who owned the subject vessel and whether there are any
viable warranties or guarantees of title in effect.
Marshall's Sale:
USCG documented vessels sold through a U.S. Marshall's sale are typically
free of any prior liens, claims or encumbrances. This type of sale may occur
as a result of a judicial mortgage foreclosure, federal court action or
federal impoundment.
Performing a Background Check
Upon gathering all of the necessary information about the
owner, it's time to move forward with the background check. Where to look
and how to go about this will depend on the type of ownership and degree of
cooperation from the owner.
Online Owner Check: There are a number
of online services that provide background checks for sole individuals and
entities. Although most are oriented toward individuals, some may include or
specialize in entities. Keep in mind, however, that such resources will
offer a good indication, but may not include a complete picture due to
privacy regulations. The references for this page will provide a list of
those we have found to be reasonably accurate. You can also utilize a search
engine such as Google for numerous referrals.
Record Vendors:
There are numerous public record providers located throughout the country
that can obtain specific records about an individual or entity. These
include government court and criminal records A listing of record vendors can be found in the
referrals and references for this page.
Entity Search: There are a number of ways to obtain
background organization and background information about a legal entity.
Every state has an online entity lookup website that will provide details
for those registered within their jurisdiction. A link to these can be
found in the registration overview references for this page. You can also
conduct a Google search for various entity reviews and companies that offer
background check services..
Credit Check: A credit report can be one of the most telling
sources about the reliability of an owner. There are a number
of online services that can run credit checks or you can ask the owner to
provide
this.
Conclusion
Boat transactions can become increasingly complex when dealing with multiple owners, business entities and owner agents. The extent to which various background checks may be required will depend on your familiarity and confidence level with the owner You should also seek the counsel of a qualified attorney in order to make sure all of necessary warranties, guarantees and agreements have been properly addressed.
References and Referrals
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