Boat Title Search Overview
All you should know about boat title, registration and vessel documentation searches.
One of the most important aspects of buying a boat is ensuring a marketable title that is free of liens and encumbrances. An effective title search should accordingly become the cornerstone of any boat purchase and sale arrangement. Such undertaking may prove difficult, however, given the complex issues surrounding how boats are registered, titled, and Coast Guard documented. This overview explores the various aspects of boat title searches and why they are such a crucial element of any boat transaction.
Boat Title Insurance
There is no longer such thing as boat title insurance in the marine industry. Although attempts have been made in the past to provide such accommodation, all have failed. This is due to the transient nature of boats, a lack of standards among governmental recording agencies and the potential for hidden or non-recorded liens. Any guarantees or warranties of title must accordingly come from the current owner. It precipitates the need for a comprehensive title evaluation on behalf of anyone in the process of acquiring an equity interest in the subject boat.
Risk Assessment
The degree of effort and expenditures in conducting a boat title search is a matter of cost to risk evaluation. An extensive title search may not be necessary if you are familiar with the owner and have confidence in such person's ability to make good on representations or guarantees of title. On the other hand, it may be advisable to run full search accompanied by a background check on an unknown owner to make sure such party does not have a history of avoiding such responsibilities.
Title Disclosures
In most boat transactions, the owner is required to make contractual representations of a marketable title with no liens or encumbrances. Unlike real estate, however, there are typically no formal title disclosure requirements in advance of the closing event. It is, therefore, incumbent on the buyer to exercise due caution by implementing a title search on their own behalf. In order to do so, it will be necessary to obtain as much information as possible about the title status and prior ownership history of the boat. Although this can be done verbally, it would be best to obtain a full written disclosure in order to cover all of the bases. You may also need written authorizations to access various recordings. In any event, the slightest resistance by the owner in extending full cooperation should be met with a great deal of concern.
Visual Inspection
A thorough inspection of the subject boat is another important element of any title search. Here you will be looking for any kinds of identification. This includes a hull number, official documentation number, state registration number, state decals, vessel name and hailing port. These will be matched against any existing title or registration certificates for consistency and in discover searches. It will also expose any evidence of alterations or tampering.
Record Searches
Boat title searches are for the most part conducted through
governmental recording agencies. These will vary according to the vessel's
size and jurisdiction in which operated.
State Registration Searches:
State boat registrations and titles go hand-in-hand in states that issue
titles. It is accordingly a matter of identifying those agencies that
administer such functions. Although available to enforcement agencies,
there is no centralized nationwide resource available to the general public
for conducting state title, registration or ownership searches.
UCC
Searches: Uniform Commercial Code searches are necessary in checking for
secured interests when a boat is neither titled or USCG documented. They are
also recommended in checking liens on items included with the boat that are
not necessarily required for it's operation. Tax liens are another option
when searching for tax liens. UCC searches are typically provided by the
Secretary of State's offices in most states.
Documented Vessel
Searches: USCG vessel documentation record searches are readily
available online and should be followed up by ordering an abstract of title
from the National Vessel Documentation Center.
Tax Lien
Searches: Tax liens may show up in UCC searches, vessel documentation
records or as red flags on boat registration records. Some government
agencies such as the Internal Revenue Service also have their own tax lien
databases.
Foreign Vessels: Record searches on foreign registered
vessels must be obtained from the respective registration or titling agency.
This can be challenging, however, due to language barriers and time
differences.
Hidden Liens
Hidden or non-recorded liens are not usually an
issue on smaller boats unless in the actual possession of the lien-holder.
On larger or documented boats, however, these may attach to the boat itself,
even through subsequent owners. The best option in searching for these is to
look in all the places where such debts may have been incurred. This may
include fuel docks, moorage, haul-outs, repairs, equipment and supplies
necessaries for the boat's operation.
Stolen Boats: Although
stolen boats not technically viewed as liens, they are of major concern when
it comes to a marketable title. The rightful owner is entitled to possession
even though a seller may have acquired it unknowingly. There is a nationwide
stolen boat database available to enforcement agencies but it is no open to
the general public. Concerned parties must accordingly check with a local
enforcement agency in order to run a check. Enterprise databases are also
available to boaters, but these are not fully conclusive.
Chain of Ownership
Searching for a chain of ownership may prove helpful in making sure there is nothing nefarious in a boat's background. Archived data on prior state registrations is available from most jurisdictions. However this may be limited as most do not maintain such records indefinitely. A documented vessel's abstract of title will also show all prior owners of record, but only during periods of active enrollment.
Interim Owners
Dealing with a non-recorded or pass-through owner requires some extra title search efforts. You will need to ensure that the current acquired it legitimately along with all the necessary transfer documents.
Owner Background Check
Given that the only recourse against a defective title is against the owner, it may be worthwhile to run a personal background check. These are available online through a number of enterprise resources, some recommendations of which can be found in our Boating Directory.
Professional Services
As you can see, boat title searches can become somewhat complicated depending on the circumstances. Although our website offers a wealth of boat title search resources there may be sufficient cause for seeking the assistance of a professional boat title company and or qualified marine attorney. Although it may prove costly, this option may be worthwhile in protecting what is likely a major investment. A listing of recommended companies can be found in our Boating Directory.
Conclusion
This overview will provide an overall picture of what boat title searches are all about. It can also be used in conjunction with our Boat Title Search Guidelines, which offer step-by-step instructions.
References
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