Why you need a Bill of Sale for your Boat
Top 10 Reasons to use a Bill of Sale for your Boat
Top 10 Reasons to get a Bill of Sale for your Boat
A fellow boat owner once told me that the best two days to own a boat are the day you buy it and the day you sell it. Okay, this may be a somewhat cynical approach to boat ownership, but there may be something in this statement. Indeed, the day you buy a boat and sell it are two exceptionally extremely important times in transferring ownership. Part of the ownership transferal is the boat bill of sale.
You may have heard the term boat bill of sale mentioned before. However, many people are unaware of what a boat bill of sale is or why it is so essential.
Therefore, this article aims to explain why you need a bill of sale for a boat. It also goes into some detail about the bill of sale itself. We will cover the following topics:
- What is a Boat Bill of Sale?
- Conditions for a Boat Bill of Sale.
- Moveable and Tangible Assets.
- Information Contained Within a Boat Bill of Sale.
- ‘As Is’ Condition.
- Maritime Liens.
- Reasons for Having a Boat Bill of Sale.
- Type of Boat – Pleasure Craft or Small Vessel? Documented or Registered?
- How Does a Boat Bill of Sale Differ From a Sales Agreement?
- Creating a Boat Bill of Sale – Important Questions to Answer
- Drafting a Bill of Sale for boat.
- Boat Bill of Sale Templates and here.
- Filling Out a DIY Template
Wait… Before getting into the complexities of the law and how to write a Bill of Sale on your own, here is a link to a template builder so you can print a custom affordable Bill of Sale. Simply answer a few questions and print!#BillOfSale
What is a boat bill of sale?
When the day comes to sell your boat, you will want to ensure the process runs smoothly and everything is handled correctly. It is not merely a case of receiving a check, handing over the keys, and being done with it – the process needs to be documented, and that is the purpose of the bill of sale.
The boat bill of sale consists of a document that provides proof of legal transfer of a boat’s ownership from one party to another. You may also have heard of a bill of sale referred to as a sales receipt or purchase proof. Without a bill of sale, the boat will not have legally transferred ownership and remains the seller’s property. Of course, this situation can lead to all sorts of complications for both seller and buyer later on.
Bills of sale can also be used for other movable and tangible property such as cars, caravans, aircraft, personal property, and so on. More specifically, a boat bill of sale proves the transfer of ownership of a watercraft. The word watercraft is crucial because the bill of sale can be for any type of boat, be it motorized or non-motorized.
Therefore, the boat bill of sale is suitable for any type or size of craft, ranging from the largest cruise ship to the smallest dinghy. Of course, the kind of craft is not the only information that goes into a boat bill of sale.
We will now take a look at other information contained within this document.
Conditions for a Boat Bill of Sale
If you buy a boat from a dealer (not a private party), then your State DMV or DNR will probably not require a bill of sale. Make sure to check your DMV/DNR website for the transfer of title requirements. There might be some forms you have to fill out instead of or along with the bill of sale in the USA. On the other hand, a Canadian provincial Sale of Goods Act lays out laws and regulations regarding the sale of goods in a particular province. A stipulation laid out within these acts is that a bill of sale is required to transfer ownership legally. However, for a bill of sale to apply, the following conditions must be in place:
- The person transferring ownership must own the property.
- The transferred property must be ‘moveable and tangible.’
As is bill of sale for boat means that the boat comes with no warrants from the seller.
#BillofSale #BoatTitle #TransferBoat
I think it might be prudent at this stage to clarify what is meant by ‘moveable and tangible’ property, as we have referred to it a couple of times already.
Moveable and Tangible Assets
In some jurisdictions, a ‘moveable and tangible’ property is referred to as a chattel. Tangible means that you can physically touch the item. Therefore the term includes assets such as furniture, paintings, antiques, automobiles, boats, and so on.
However, it does not include immovable items such as houses, buildings, or other permanently fixed property, either to the ground or another building. As you cannot physically touch investments, stocks, shares, and so on, they are not classified as ‘moveable and tangible.’ Therefore, these items are not governed by a bill of sale.
Although there is no specific definition of ‘moveable’ within provincial Sale of Goods Acts, it is generally accepted that the term applies to assets that you can move easily without damaging its surroundings. Therefore, it will include all types of watercraft located on the water. However, the term ‘moveable’ for grounded craft may only apply to smaller craft that can be moved by a trailer, crane, or hoist.
Generally, you could be liable for capital gains tax when selling property. However, for ‘moveable and tangible’ property with a predictable life of fifty years or less, you could be exempt from tax.
Information Contained Within a Boat Bill of Sale
You may require a boat bill of sale for registration purposes or other state application processes. It contains relevant information about the boat, buyer, seller, and transaction terms.
When it comes to signing a boat bill of sale, both the seller and the buyer are required as signatories. A notary should witness the signing of a boat bill of sale.
Bills of sale include information, such as:
- Seller’s identity.
- Buyer’s identity.
- A statement confirming the seller is legally entitled to sell the boat.
- Property description and what is included in the sale.
- Statement covering any ‘as is’ conditions (see below).
- Year the boat was built.
- Hull identification.
- Odometer reading.
- The vessel’s make and model.
- Purchase price of the boat and all equipment included in the sale.
- Any maritime liens existing on the property (see below).
- Signatures of buyer and seller.
- Date of the sale
‘As Is’ Conditions
When you sell a boat ‘as is,’ you are indicating to potential buyers that you want no further dealings with the buyer regarding the transaction once the deal has been concluded.
‘As is’ clauses are there to inform the buyer that the deal is final.
However, you should not use these clauses too many times. If you do, it might not just threaten the deal, but it may be looked upon as unreasonable should there be any dispute down the line.
Therefore, you might consider using an attorney if you intend to use ‘as is’ clauses within a boat bill of sale. Of course, you can choose to do it yourself, and there are plenty of templates available to help you with this – more on boat bill of sale templates below.
A lien is like an insurance policy set against an asset as a form for security of payment of another obligation. The asset owner is referred to as the lienee, and the party (individual or organization) who benefits from the lien is the lienor or lien holder.
A maritime lien provides such security to suppliers of fuel, repairs, equipment, and other services to watercraft. A maritime lien is automatically in place at the point at which the fuel is delivered, repairs are carried out, or other services get rendered.
Therefore, if a boat sails without the owner having paid, the supplier can seize the vessel and demand payment even if it has changed ownership. If you have bought the boat with existing liens, you are liable for those.
Reasons for Having a Boat-Bill-of-Sale
Whether you are the buyer or the seller of a boat, naturally, you want to get the transfer ownership as quickly as possible. You might think that completing unnecessary paperwork is a hassle that delays this process. However, a boat bill of sale is essential for both parties. Remember, some states have boat titling while others only have boat registration. If you buy a boat that is not titled, the Bill of sale becomes a MUST otherwise you won’t be able to register the vessel.
If the vessel is federally documented with the Coast guard instead of a local state, the CG-1258 form is required by the vessel owners to file initial documentation of a vessel or to transfer ownership of a boat. The transfer will require a CG-1340 (Bill of Sale) from this URL address at the USCG: https://www.dco.uscg.mil/Portals/9/DCO%20Documents/NVDC/CG-1340_Bill_of_Sale.pdf?ver=2017-05-09-113141-317.
Here are ten reasons why you must use a boat bill of sale:
Benefits of boat_bill_of_sale:
1. Provides Peace of Mind
The main reason bills of sale are used is that they provide proof of sale or ownership transfer. This condition is crucial when transactions involve used personal items, where there are no other means of determining ownership. In sales involving cash payments, a bill of sale also provides proof of payment. Both the buyer and the seller should keep a copy of the bill of sale.
2. It States What You are Getting For Your Money
A boat bill of sale should describe more than merely what the boat is. It should detail trailers, motors, or other equipment, such as fishing gear or water activity accessories included in the sale or transfer. If you’ve never owned a boat previously, these can be critical factors when dealing with the transfer or sale of a vessel. A trailer can be crucial for not only removing a boat from the water, or moving it from one place to another; it also comes in handy for storing a boat during the winter or out of season. In many situations, the trailer can provide a ‘berth’ for the boat during an extended period when it’s out of the water.
3. It Provides Proof of Ownership
A bill of sale documents the transfer of a boat from its owner to its new buyer. It is an important document that serves the purpose of providing proof of the buyer’s ownership. This will be useful for tax purposes and in case you are stopped/inspected by the USCG; or even in case a theft happens!
4. It Lays Out the Boat’s Condition and Warranties
The bill of sale will clearly state the condition of the craft and its equipment. The hull of a motorized vessel might be in excellent condition, but if the engine is unserviceable, you might not get it too far. Moreover, you could face considerable expenses if you have to repair or replace broken equipment. Therefore, you know you’re getting exactly what you’re paying for.
A boat bill of sale will also inform you the seller has included no representations or implied warranties with the sale. It protects both the buyer and the seller. The buyer will have the opportunity to inspect the boat, along with a mechanic or boat surveyor if they wish to use either. When the buyer is satisfied with the condition described in the bill of sale, both buyer and seller sign and date the documents (2 copies).
5. It Provides the Boat’s Location History
You may not think this is much of an issue. After all, the boat is sitting where it is. Of course, but having the location on the bill of sale gives you, as a buyer, a documented history of the vessel’s life. You may not have been aware that the boat was previously berthed 3,000 miles away across the ocean. That may be insignificant if it’s a cruise liner, but it could require considerable maintenance after such a voyage if it is a smaller craft.
6. It Details Previous Ownership
A bill of sale gives you the security of knowing who has owned your boat previously. Should there be any queries about the boat’s activity during a specific period, you can trace the previous owners to provide information.
7. It Ensures the Vessel is Moveable and Tangible
In the era of online commerce, there are many opportunities for unscrupulous sellers to be ‘flexible’ in their descriptions. You might think you will be sailing off into the sunset in a vintage riverboat, only to find it has been used as a restaurant for the past twenty years and is now attached to the quay! A bill of sale ensures the asset you are buying is moveable and tangible, so there is no room for underhanded sales tactics.
8. As Is
We explained what an ‘as is’ condition means earlier. You must understand any ‘as is’ conditions that exist in the sale, as these could influence your decision to buy or the price you’re prepared to pay. Therefore, if there are any issues with the boat or some feature is not performing as it should do, you should include these details. The bill of sale must include any ‘as is’ conditions, protecting both the buyer and seller from any dispute in the future.
9. Mandated by law
Fraudulent selling of assets is a serious crime and can cost buyers significant money and stress. Bills of sale are mandated by law as a measure to restrict the potential for fraud. By ensuring you use a boat bill of sale, you protect yourself as either a buyer or seller.
As a buyer, you are protected as it keeps you from accusations of fraud. If someone makes such an accusation, you can use the bill of sale to prove everything is legitimate. The same situation applies if you’re a seller. Therefore, using a bill of sale means you don’t have to worry about scurrilous accusations of fraud.
10. Purchase Price
Price is one of the primary considerations in buying or selling a boat. During negotiations, prices will be offered, declined, revised, and ultimately agreed upon. The bill of sale records the agreed price, so there can be no ambiguity about what you are paying or receiving for the vessel.
Check the 12 digit Hull Identification Number
When you see the seller’s title, there should be a HIN number on it and it must match the one etched on the boat’s hull. The HIN must also be of a valid formatting (read: All you wanted to know about Hull ID Numbers) and check that it can be decoded properly at hindecoder.com. After that, use the Boat-Alert.com database to search all 72+ nationwide databases in a single website. These include records for stolen boats, marine lien claims, boating accidents, pollution incidents, auctioned boats, factory recalls, and boat manufacturers. Get a mechanic and survey completed.
Type of Boat – Pleasure Craft or Small Vessel?
The type of boat determines which bill of sale you can use. For instance, if the boat being bought or sold is Canadian registered or licensed under the Small Vessel Registry (Commercial), then you will need specific forms. The same applies to United States USCG documented vessels. For boats registered with a Pleasure Craft Licence in a province, you must create a bespoke bill of sale or use an existing template. To make a suitable boat bill of sale, you will need to answer several questions, which we will detail below. For US State titled/registered boats, you will need to verify with the DNR what they require before you buy the boat and transfer ownership.
How Does a Boat Bill of Sale Differ From a Sales Agreement?
You must understand that a boat bill of sale is not the same as a sales agreement. The main difference between the two is that a bill of sales is similar to a receipt. In contrast, you can use a sales agreement for more complex transactions, such as multiple payments or providing quality warranties.
Creating a Boat Bill of Sale – Important Questions to Answer
When completing the document, there are several essential questions to answer. These answers cover the most crucial information regarding the boat and its ownership. These questions include the following:
- What price is the boat?
- Who is the boat’s seller?
- Who is the boat’s buyer?
- What is the boat’s condition?
- What are the boat’s make and model?
- Where is the boat’s location?
Drafting a Boat Bill of Sale
Before drafting the document, both the buyer and seller must do some preparations. The seller must prepare their boat to be sold, and the buyer needs to find a dealer, either through a broker or directly. When drafting, there is a risk of critical information being omitted, mainly if it is your first time selling a boat.
Of course, you can draft a bespoke boat bill of sale, but that might increase the risk of leaving out some crucial information. Perhaps a better approach would be to use a bill of sale template. If you still have not found a buyer for your used boat, check out these 20 Ways to Sell your boat faster on Craigslist.
Boat Bill of Sale Templates
As we’ve just mentioned, writing a bill of sale from scratch increases the risk of you omitting crucial information. Let’s face it; nobody wants to waste time producing a document from scratch, only for it to be full of errors and lacking essential information. Get an affordable Boat Bill of Sale tailor made for your situation, country and state. This way you can get a custom-made and professional boat purchase agreement PDF.
Therefore, you might find that using a template is the best option. There are many templates available for producing a boat bill of sale, and many are available as free downloads. However, not all these downloadable templates are the same, so you should check that it is compatible with the applicable Canadian Coast Guard licensing agency (Transport Canada).
Filling Out a Template Bill of Sale
The first step of filling out a template is to complete all essential information, such as the buyer’s and seller’s information. Also included in this basic information are details regarding the craft, including its make, model, and other identifiers.
Basic information that often gets overlooked includes details of color, serial number, year of construction, etc. There will also be a section describing any after-market features, such as trailers, new seats, or other added equipment.
As we previously mentioned, your template should be compliant with your Canadian Coast Guard licensing agency. If you are in the United States, compliance must be in accordance with with the Department of Homeland Security – U.S. Coastal Guard. However, how can you ensure your bill of sale is compliant?
There is an alternative to an online boat bill of sale template, and that is using a vessel document management service. This method means your boat bill of sale gets completed by an expert. Whichever way you choose, you should consider having your documents notarized. #BoatBillSale is also known as the boat slip purchase agreement.
How to Write your Own Boat Bill of Sale:
…Wait… Before getting into making your own Bill of Sale, you can get one built for you with just a few clicks Here. Simply answer a few questions and print!
DIY Bill Of Sale #Boat_Bill_Sale
Step 1 – Download a template bill of sale online or write one in document.
Step 2 – Enter the dollar amount of the agreed upon purchase price of the boat/vessel.
Step 3 – Record all Buyer & Seller Information:
- Zip Code
Step 4 – Description of the watercraft – Accurately describe the particulars surrounding the boat that is to be transferred:
- Hull ID Number
- Registration Number
- Title Number
- Motor Model
- Year (of Motor)
- Odometer Reading (in hours)
Step 5 – Description of Trailer – If applicable. include a trailer to go along with the boat, notate the applicable identifying information:
- Serial Number or VIN (make sure you lookup the VINALERT.com report using the VIN)
Step 6 – Complete any information regarding any current claim or lien actively present on the boat’s title.
Step 7 – Finalize the transaction via signatures to complete boat bill sale.
Step 8 – To authorize the document, it is advised to sign the document before a notary public, a witness, or witnesses in the allocated spaces. This is the last step in the boat purchase and sale agreement pdf.
Conclusion – Benefits of boat bill of sale
Even if you are a one-time boat owner, you will need to be familiar with a boat bill of sale. More likely, as a boat owner, you will go through the boat buying and selling process more than once.
There are many reasons you need to use a boat bill of sale, and, hopefully, this article will have informed you of these. You should also be aware of many considerations when buying or selling a boat. A boat bill of sale helps ensure that all of these are checked.
>>> Get an affordable Boat Bill of Sale tailor made for your situation, country, and state.
#BillofSale #BoatTitle #TransferBoat
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