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Outstanding finance on a boat?


Tony1

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Hello folks, I wonder if anyone will be able to offer any advice on this? 

I'm looking to buy a boat hopefully in the next 6-10 weeks or so, and I've seen a few great-looking boats (and prices) from private sellers. 

I can understand that buying privately you have to do your own checks, and so I was wondering how/whether it is possible to check that a boat has no outstanding mortgages, loans or any other form of finance against it? 

I thought it might help to provide some legal comeback if I add a phrase into the bill of sale above the seller's signature, saying something like this:

'I certify that I am the sole owner of the boat  xxxxxxx, and that there are no mortgages, loans or other finance against it.'

Buying privately seems a great idea when you see the keen prices (in some cases), but its starting to hit home just how much of a risk you have to run when you are spending 30, 40 or 60k without the security of a broker.

I'd be grateful for any advice or info that you folks can offer. 

I think one thing might be to get a solicitor to draw up the bill of sale, for example, or even manage the sale.

 

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2 minutes ago, ditchcrawler said:

Very unlikely to have a loan secured against it, not many people have marine mortgages now

Thanks Brian, it is somewhat reassuring to know that it is very rare to have such finance. 

For me it is a retirement lump sum investment, and a one-off punt- if I lose the dosh, I'll be screwed for buying a boat unless I sell my house

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The use of a broker does very little to ensure that the 'owner' actually does own the boat outright.

Buying a boat that is owned by the broker even though he may not declare it  gives you more protection.

TD'

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Almost impossible to confirm even with a solicitor, however the owner is required to declare any issues if asked. The phrases you want included in any bill of sale is the boat is sold free from any mortgages, fees liens or other encumbrances. There are several examples of bills of sale online you can refer to but look for RYA or MCA examples.

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There is no 'registration of inland waterway boats' that show either ownership or outstanding loans, and a broker has no more ways of finding out than you do.

 

If you use the standard documentation there is a phrase/ paragraph which says what you are looking for (but it doesn't stop the seller telling lies)

 

1.1. The Seller warrants to the Purchaser that the factual matters set out in the description of the Vessel on page 1 of this Agreement are true and correct and that he is the sole legal and beneficial owner of the Vessel and absolutely entitled to transfer his interest in the Vessel in the manner provided by this Agreement.

 

and

 

 

1.1.1. An express written declaration by the Seller that at the moment of Completion and delivery to the Purchaser the Vessel is free of all debts, claims and charges of every kind;

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1 hour ago, Tony1 said:

Hello folks, I wonder if anyone will be able to offer any advice on this? 

I'm looking to buy a boat hopefully in the next 6-10 weeks or so, and I've seen a few great-looking boats (and prices) from private sellers. 

I can understand that buying privately you have to do your own checks, and so I was wondering how/whether it is possible to check that a boat has no outstanding mortgages, loans or any other form of finance against it? 

I thought it might help to provide some legal comeback if I add a phrase into the bill of sale above the seller's signature, saying something like this:

'I certify that I am the sole owner of the boat  xxxxxxx, and that there are no mortgages, loans or other finance against it.'

Buying privately seems a great idea when you see the keen prices (in some cases), but its starting to hit home just how much of a risk you have to run when you are spending 30, 40 or 60k without the security of a broker.

I'd be grateful for any advice or info that you folks can offer. 

I think one thing might be to get a solicitor to draw up the bill of sale, for example, or even manage the sale.

 

I don't profess to be a legal expert but as I see it if you put some sort of clause in the bill of sale that may indeed give you some comeback if a finance company comes after the boat after the seller has dishonestly declared it's not free of secured finance. I suspect though that won't stop the finance still taking the boat regardless. You will then be left to pursue the dishonest seller for your losses.

 

But the problem will then be even if the court finds in your favour what will happen if the seller no longer has the money you paid him or any assets to sell to cover payment to you. I don't believe any court can force them to reimburse you what they haven't got.

 

Unless a proper 'legal eagle' can advise otherwise.

 

Worse case? yes of course it is but I think I'm just pointing out even having some sort of signed legal text on the bill of sale still isn't a 100% guarantee of not getting stung.

Edited by The Happy Nomad
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3 minutes ago, Tracy D'arth said:

The use of a broker does very little to ensure that the 'owner' actually does own the boat outright.

Buying a boat that is owned by the broker even though he may not declare it  gives you more protection.

TD'

I don't know about these things tbh, but I would imagine buying from any broker you will have some comeback against that broker, if it turns out there is a loan secured on the boat?

 

 

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2 minutes ago, Tony1 said:

I don't know about these things tbh, but I would imagine buying from any broker you will have some comeback against that broker, if it turns out there is a loan secured on the boat?

 

 

No you won't. The broker acts as an 'agent' of the seller. Ultimately the seller is responsible. There is normally a clause in the selling details that makes this clear, normally backed up in the agreement you sign when you buy the boat.

Edited by The Happy Nomad
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3 minutes ago, Tony1 said:

I don't know about these things tbh, but I would imagine buying from any broker you will have some comeback against that broker, if it turns out there is a loan secured on the boat?

 

 

Don't bank on it!!

TD'

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Thanks Phil, Alan and Mr Nomad- some really helpful information and advice there.

I was considering using this form, but I'm tempted to add in a couple of your suggested phrases. 

 

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/859259/MSF_4705_Rev_1118_Bill_of_Sale.pdf

 

 

 

 

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6 minutes ago, Tony1 said:

I don't know about these things tbh, but I would imagine buying from any broker you will have some comeback against that broker, if it turns out there is a loan secured on the boat?

 

 

 

Nope.

 

The broker is not the owner and not actually selling the boat, the broker has no legal responsibility for any warranty or the truth of any details supplied. The brokers details will normally have a phrase "these details have been given to us by the owner, you should employ your own surveyor if you need to check them" (or words to that effect.

If you ask a DIRECT question, then the broker is legally obliged to answer to the best of his knowledge. 

 

It is a very different story if the Brokerage OWNS the boat, in which case the sale of goods act comes into play.

Edited by Alan de Enfield
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2 minutes ago, Tony1 said:

Thanks Phil, Alan and Mr Nomad- some really helpful information and advice there.

I was considering using this form, but I'm tempted to add in a couple of your suggested phrases. 

 

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/859259/MSF_4705_Rev_1118_Bill_of_Sale.pdf

 

 

 

 

That will do the job

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5 minutes ago, Tony1 said:

Thanks Phil, Alan and Mr Nomad- some really helpful information and advice there.

I was considering using this form, but I'm tempted to add in a couple of your suggested phrases. 

 

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/859259/MSF_4705_Rev_1118_Bill_of_Sale.pdf

 

 

 

 

 

You ca use that (although it is really for registered boats) not little 'play things on the canal'.

Using that form does not mean you can register your boat with the Government.

 

You may be better using the BMF or RYA documents which are focussed on 'small boats'

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17 minutes ago, Phil. said:

Almost impossible to confirm even with a solicitor, however the owner is required to declare any issues if asked. The phrases you want included in any bill of sale is the boat is sold free from any mortgages, fees liens or other encumbrances. There are several examples of bills of sale online you can refer to but look for RYA or MCA examples.

And if someone ELSE owns the boat do you think it likely the seller would give him his money back, assuming he could find him. All the clauses in the world wont stop a con artist. The best you can do is to do everything you can to satisfy yourself that whoever is selling it actually owns it, bills, insurance, licence, maybe moorings, knows his way round the boat backwards etc.

Edited by ditchcrawler
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Thanks folks- one private seller I've been in touch with says he has the original RCD certificate and bill of sale (he bought it new) for his boat, so that sounds promising. 

I guess the bottom line is that once you prove they are who they say they are, and they live where their drivers license says they do, and that the documents are all in their name, you have to just trust that they haven't arranged any finance against the boat. 

The bill of sale clause gives you a legal recourse against the seller if the boat gets repossessed by a bank, but a court action is a very long and frustrating road- and its very reassuring that nobody here has actually mentioned any examples they know of- that suggests that this particular type of fraud is very rare. 

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26 minutes ago, Tony1 said:

I don't know about these things tbh, but I would imagine buying from any broker you will have some comeback against that broker, if it turns out there is a loan secured on the boat?

 

 

I don't agree

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11 minutes ago, LadyG said:

I don't agree

You are not alone in not agreeing LadyG- it appears my assumptions about the financial safeguards provided by brokers was very wide of the mark

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1 hour ago, Tony1 said:

... you have to just trust that they haven't arranged any finance against the boat. 

As explained above, that would be rare in the extreme. Very few companies offer marine mortgages on narrowboats these days and any loan that the seller took out would more probably be a personal loan, not tied to the boat in any way. 

Edited by WotEver
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52 minutes ago, Tony1 said:

  

The bill of sale clause gives you a legal recourse against the seller if the boat gets repossessed by a bank, but a court action is a very long and frustrating road- and its very reassuring that nobody here has actually mentioned any examples they know of- that suggests that this particular type of fraud is very rare. 

But if the seller is a crook a) he wont be there to get the money off and  b) if you find him he probably wont have any money anyway.

 

I think you have taken all the right steps, good luck with your purchase 

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Thanks guys, I'm satisfied that finance fraud is such a rare event that I'm willing to take a chance that this guy isn't some kind of crook.

My only other concern is he has another interested party looking at the boat in a few days, so we'll have to see if there are any competing interest along with my own.

I'll keep you posted over the next week or two.

 

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23 minutes ago, WotEver said:

Nobody’s offering marine mortgages these days

There are actually many companies offering Marine Mortgages

 

Just a 'couple' of the more well known ones :

 

https://www.closeassetfinance.co.uk/marine-finance?

 

https://www.arklefinance.co.uk/sectors/marine-finance?

 

https://www.lombard.co.uk/lombard/assets/marine-finance/leisure-marine-finance.html

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2 minutes ago, WotEver said:

On Narrowboats?

Arkle do. Check their web site.

 

Edit - though not for residential boats it seems.

 

 

Arkle.JPG

Edited by The Happy Nomad
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