BOAT TITLE METHODS

An overview of various boat titling methods.

A title by most legal definitions is the body of rights wherein individuals or entities may own equitable interests in a specific property. With respect to boats, these are typically evidenced by a certificate of ownership as issued by a governmental recording agency. Rights of ownership are however also represented by non-recorded instruments such as manufacturer assignments, bills of sale, transfers of interest, extra-judicial  foreclosures, court awards, and various other methods of conveyance. Boat titles may be furthermore encumbered by loan security arrangements, vessel mortgages, mechanic's liens, and  hidden maritime liens. When proven or perfected, these effectively become equity positions in the boat itself.

Boat titles are not like anything else, especially when in comes to vehicles or real-estate. This is because they are multi-jurisdictional in nature. During the lifetime of a particular boat, its title may have become influenced by the laws of one or more states, the federal government, and perhaps a foreign country. Unfortunately, there is very little conformity among these entities with regard to the manifestation of ownership. Such diversity is further compounded by the different ways in which liens, encumbrances, and inferred equities are acknowledged or prioritized.

In order to highlight just some of these differences, let's consider the manner in which boat title or ownership certificates are administered by various jurisdictions. Each of our states is categorized as "title" or "non-title" with regard to boats. In a non-title state, the yearly registration certificate is simply looked upon as proof of ownership. Unfortunately, their recording requirements are sometimes quite relaxed. The Coast Guard also issues a yearly certificate of documentation on qualified vessels which serves as a title certificate. Their application rules are more stringent than those of most states. With respect to foreign title certificates, these can be a mix of everything from simple license cards to certificates of registry.

There is even more diversity in the way boat liens and encumbrances are handled within these various jurisdictions. In title states, security interests are typically shown on the certificate of title. Otherwise, it may be recorded with a county clerk or secretary of state as a Uniform Commercial Code filing. When a boat is Coast Guard documented, it's handled more like a real estate transaction. Here, a lien or encumbrance is recorded on the vessel's underlying abstract of title. As for foreign countries, they could again be a mix of both methods. The frightening thing about boat liens is that they may remain effective even though not recorded or known by a subsequent owner. There is also a converse priority with regard to liens and encumbrances on documented vessels.

As you can see, there are numerous issues to consider when dealing with boat title transactions. It requires a lot of experience, expertise, and hard work to ensure that ownership of a particular boat is unencumbered and marketable. Given these circumstances, the services of a titling professional will certainly increases the odds of success. Should you decide to go it alone, our web site can provide a wealth of boat title information, forms, and self-services. In any event, it may be worthwhile to consult with a maritime attorney to make sure your legal interests are fully protected.

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