How do you tell if a boat has money owing on it? – Boat Liens

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Marine Liens showing boat and judge hammer
If a boat is sold, the new owner becomes responsible to pay the loan back.

What are Marine Liens

What does having maritime lien mean?

A lien is a claim on a property. It is pronounced like “Leen”. Usually by a bank or a mechanic that you owe money too. A boat that has a mortgage will have a lien placed on it until the boat is paid off and have no money owing. They serve to protect the creditor. It is part of maritime law and you can read more here.

If a boat is sold, the new owner becomes responsible to pay the loan back.

What is a Lien? Types of Property Liens Explained
Types of Liens

#Lien #MarineLiens #MaritimeLien #MaritimeLaw #Claims

What is a preferred ship mortgage? What types of claims will give rise to maritime liens?

A First Preferred Ship’s Mortgage is a mortgage that would be recorded against a vessel/boat that is documented with the United States Coast Guard (more on USCG below). It is protected under the Ship’s Mortgage Act of 1920, and takes precedence/priority over all liens other than preferred Maritime Liens. The First Preferred Ship’s Mortgage assures the mortgagee the owner will properly insure the vessel and refrain from encumbering the vessel. The mortgagee will be notified if the vessel is seized, libeled, or detained by any person or country within 15 days and discharge it from same. With the First Preferred Ship’s Mortgage, the owner will comply with all state, local, and U.S. laws and keep vessel document current and on board the vessel, along with a copy of the Mortgage. The mortgagee is assured the owner will not leave the country without intending to return, abandon the vessel or sell, mortgage, or charter the vessel without the consent of the creditor/mortgagee.

How do you place a lien on a vessel? (How do you put a lien on a boat?)

If you are a private party like a mechanic then you can place liens at the secretary of state with a UCC filing. More on those below. You can also post the claim on marineliens.com into their private database. If you are a bank, then you would place it in the USCG boat documentation database.

What is a HIN

A hull identification number (HIN) is the serial number of the boat that is issued by the manufacturer and affixed to the hull of the boat. You can use this to lookup the HIN in public databases to search for Liens/encumbrances. Here is an article you can read all you wanted to know about hull id numbers.

Types of Tilting States

Not all States in the USA issue titles for boats. Some will only register the boat and only a handful of states will include a salvage brand on the title. All the rest of the states will have clean titles because they have not yet enacted UCOTVA. This is why it is important to check the title for any indication of liens but the absence of a lien on the title does not rule out all types of money owing on that boat. What if your state DMV does not record liens? more on that below.

How to lookup a Marine liens for USCG documented boats

If your boat is large enough, it will be required to be documented with the U.S.C.G. (Federal) instead of being registered at the State level. So, instead of using the HIN, you would use the Official Number to lookup a boat abstract of title. The abstract of title will show all bills of sale and bank names so you can find the mortgages and if they were satisfied or not. This will help you determine if the boat has money owing on it.

Infographic: how to check if a boat has a lien on it or money owing
Infographic: how to check if a boat has a lien on it or money owing

How to lookup UCC filings

What if your state DMV does not record liens? Well, many liens and claims will be recorded with the secretary of state (SOS) in your state as a UCC-Filing. Want to know more about UCC Liens and how to use them to lookup if a boat has a loan owing on it? read our article on the topic of UCC Filings here.

How is a maritime lien enforced?

A maritime lien can be enforced in only one way. Enforcement requires filing a complaint in federal court, naming the vessel itself as a defendant and arresting the vessel pursuant to a warrant of arrest issued by the court.

What is the order of priority of maritime liens?

It is best to consult a lawyer regarding maritime law as it can get complicated but generally maritime liens are taking priority over other liens in situations where there are many claims on the vessel. You can also consult the MLA.

What about liens for boats in Canada?

You can hire companies to do a Lien Check Service (acol.ca) and thus search personal property registries. You can also search for liens at your province registrar office for around $5 usually. For example, use this link if you are in Ontario: https://www.ontario.ca/page/register-security-interest-or-search-lien-access-now.

Presentation on the topic of Boat Liens:

Conclusion

There are many types of boat liens and they could be recorded in different places so make sure you do your due diligence when buying a used boat.

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