Outstanding finance on a boat?

[Guest]

It is perhaps worth pointing out that just because the likes of RoyScot Larch/Barclays Marine etc etc no longer provide new loans that is not to say there are many boats out there with outstanding finance owed to them. 

 

So although the market for new loans has diminished somewhat it doesn't mean that there is not the potential to get caught out on a boat with long standing mortgage.

[Stilllearning]

Would buying an older boat solve the problem? It seems unlikely that a 3rd 4th or 5th hand boat would have any loans out on it.

[Tony1]

4 minutes ago, Stilllearning said:

Would buying an older boat solve the problem? It seems unlikely that a 3rd 4th or 5th hand boat would have any loans out on it.

 

That's certainly a thought, but I'm ideally looking in the range of say 40-55k in order to get something not quite so old. 

[Cheese]

Date of last sale may be more pertinent than age of boat.  A boat last sold in recent years is less likely to have had finance available when purchased.  Conversely, if last sold many years ago, any finance at purchase is more likely to have been cleared.

 

What was the typical duration for narrowboat loans?

[Stilllearning]

2 minutes ago, Tony1 said:

 

That's certainly a thought, but I'm ideally looking in the range of say 40-55k in order to get something not quite so old. 

It is your choice of course. There may be nothing inherently wrong with an older boat, and many here would say that they prefer old, well built and well fitted, with character. The newer it is, the more likely that part of the cost will be depreciation, which to me is a very long four letter word.

[Alan de Enfield]

4 minutes ago, Cheese said:

What was the typical duration for narrowboat loans?

Do you mean Loan, or Mortgage ?

 

Loans were normally personal loans and the boat was not used as security.

A mortgage takes the boat as security and it cannot be sold until the mortgage is paid in full. 

[David Mack]

The other risk not mentioned is that the vendor may not have full ownership. If a couple have split one may sell the boat against the other's wishes (and keep all the proceeds). So you may find the seller's ex chasing you.

[Tony1]

31 minutes ago, Stilllearning said:

It is your choice of course. There may be nothing inherently wrong with an older boat, and many here would say that they prefer old, well built and well fitted, with character. The newer it is, the more likely that part of the cost will be depreciation, which to me is a very long four letter word.

I honestly can't argue with this point about depreciation, its definitely a big issue on newer boats. 

But I do have a problem in that my DIY skills are rubbish, and I generally botch a good third of the jobs I take on, to some degree.

So as the inevitable minor failures occur as a boat gets older, I would probably end up paying a fair bit to professionals to do repair work- or to repair my bodges.

So I'm reckoning there would be a higher than average cost for me if I was maintaining an older boat, and in my case that slightly mitigates the heavy depreciation.

 

 

[Tony1]

40 minutes ago, David Mack said:

The other risk not mentioned is that the vendor may not have full ownership. If a couple have split one may sell the boat against the other's wishes (and keep all the proceeds). So you may find the seller's ex chasing you.

Thankfully I'm not hearing any tales of this sort here, so it seems the boat market is still pretty honest. I'm keeping my fingers crossed that I won't fall victim to some such dishonesty, but there's no getting round the fact that if I'm unlucky enough to encounter a dishonest person, I'm going to face a long and painful legal battle, and may never get my money back even if I win.

[ditchcrawler]

1 hour ago, Alan de Enfield said:

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

I only knew of two before.

[Alan de Enfield]

24 minutes ago, ditchcrawler said:

I only knew of two before.

There is at least half-a-dozen more than those examples.

What is their 'bottom' limit (minimum) I have no idea.

[Stilllearning]

1 hour ago, Tony1 said:

I honestly can't argue with this point about depreciation, its definitely a big issue on newer boats. 

But I do have a problem in that my DIY skills are rubbish, and I generally botch a good third of the jobs I take on, to some degree.

So as the inevitable minor failures occur as a boat gets older, I would probably end up paying a fair bit to professionals to do repair work- or to repair my bodges.

So I'm reckoning there would be a higher than average cost for me if I was maintaining an older boat, and in my case that slightly mitigates the heavy depreciation.

 

 

Only a third of jobs, you’re doing well  

[Tony1]

2 minutes ago, Stilllearning said:

Only a third of jobs, you’re doing well  

If I'm honest, I was being very generous to myself at a third. 

I've never done a statistical analysis of my DIY performance- I think there are some things you're better off not knowing ?

[Mike Todd]

19 hours ago, Tony1 said:

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. 

Furthermore, if two people have documents that purport to state that they own the boat, neither has a particular precedence and it will be up to a court to decide between them (or, preferably, some form of less expensive arbitration). In further addition, if one of the purported owner is actually living on the boat then repossession will take even longer and be much more expensive (as CaRT know all too well!)

[Tasemu]

I'm confused, if a boat is under finance and you buy it, does it matter? the owner uses the money you pay them to pay the balance of the loan and pockets whatever he/she has paid off already?

 

Or am i totally wrong here?

[George and Dragon]

2 minutes ago, Tasemu said:

I'm confused, if a boat is under finance and you buy it, does it matter? the owner uses the money you pay them to pay the balance of the loan and pockets whatever he/she has paid off already?

 

Or am i totally wrong here?

You're making the assumption that the person selling the boat a) has the right to sell it (is the owner) and b) is honest. Either or both may be true 

[Tasemu]

Just now, George and Dragon said:

You're making the assumption that the person selling the boat a) has the right to sell it (is the owner) and b) is honest. Either or both may be true 

Hmm.. I'm going to be paying off my boat. I guess if i want to sell it in the future to finish off the loan i'm going to have a lot of suspicious looks haha...

[nebulae]

It was the case that a vessel which had a MORTGAGE on it(not finance) had to be registered as British Ship.  In this case,the lender had the ownership of the vessel as security.(Irelevent whether the vessel is a narrow boat or an oil tanker).  This gives a purchaser a secure purchase .My first purchase of a registered British Ship involved a considerable legal process. The Small Ship Register does not give the same protection,although it does give you another piece of paper.  I have not come accross a narrow boat registerd as a British Ship. Perhaps surprising considering how much a new boat costs

[Alan de Enfield]

21 minutes ago, nebulae said:

The Small Ship Register does not give the same protection,

It is the same register but Part 3, which is primarily for 'small ships under 24 metres long' & does not give any evidence of ownership, but Part 1 does.

 

Part III registration

Register your boat on the Part III if you want to prove the boat’s nationality when sailing outside UK waters.

It costs £35 for 5 years.

To be eligible:

your boat must be less than 24 metres long

you must be a private individual (not a company)

you must live in the UK for at least 185 days of the year

your boat must have a name

For more information, read the full guidance notes.

You can make changes to an existing registration online, for example change of ownership, address or boat details.

You’ll be sent a renewal notice when it’s time to renew.

 

Part I registration

Register your boat on the Part I register if you want to:

prove you own the boat

prove your boat’s nationality

use the boat as security for a marine mortgage

register a pleasure vessel

get ‘transcripts of registry’, which show the boat’s previous owners and whether there are any outstanding mortgages

Your boat must have a unique name to be registered.

It costs £153 to register for 5 years.

 

I have come across very, very few NB's registered even on Part III, it seems odd as most coastal boats are Part III registered.

 

Sorry its a bit blurry :

 

 

 

Edited July 6, 2020 by Alan de Enfield

[TheBiscuits]

6 minutes ago, Alan de Enfield said:

 

I have come across very, very few NB's registered even on Part III, it seems odd as most coastal boats are Part III registered.

 

There aren't many narrowboats that

7 minutes ago, Alan de Enfield said:

want to prove the boat’s nationality when sailing outside UK waters.

 

I can only think of about six, and one of them would have been registered in Canada!

[Alan de Enfield]

1 minute ago, TheBiscuits said:

 

There aren't many narrowboats that

 

I can only think of about six, and one of them would have been registered in Canada!

I was expecting such a comment. The vast majority of Coastal cruisers don't either.

It is purely used as an Identifier - remember that there is no C&RT, EA etc registration 'numbers' requirements on the Sea.

[Guest]

4 hours ago, Tasemu said:

I'm confused, if a boat is under finance and you buy it, does it matter? the owner uses the money you pay them to pay the balance of the loan and pockets whatever he/she has paid off already?

 

Or am i totally wrong here?

If that is what happens then yes fine.

 

But if the seller doesnt do that and also ceases to repay the finance then the lender will eventually be allowed to repossess the boat. And regardless of who now thinks they own it they stll can.

 

The buyer then loses both their payment for the boat and the boat itself. Pretty rare but certainly possible. Lose, Lose.

[Alan de Enfield]

4 hours ago, Tasemu said:

I'm confused, if a boat is under finance and you buy it, does it matter? the owner uses the money you pay them to pay the balance of the loan and pockets whatever he/she has paid off already?

 

Or am i totally wrong here?

Yes, legally it matters.

 

You are not the owner until the mortgage is paid off (different for a personal loan) as the boat is security against the loan.

You cannot sell something that is not yours, if you require to sell it then the Mortgage company should be informed and permission to sell given. The Mortgage company may insist that the payment is made into their bank and they will refund to you the balance after they have deducted the outstanding amount.

 

If you were to buy a boat with finance outstanding against it, the finance company would be within their rights to re-possess it and give you Zilch as you don't own it (they do).

However, I would think that the finance company would rather have the money than the boat , so, rather then lose the boat you may decide to offer them the outstanding amount.

[Detling]

Best plan is try to ensure you have a forwarding contact point for the owner/seller i.e.their address as well as phone number, if possible bank account although people are getting touchy on that one now, maybe bank and full name +sort code but not account no. Check address and phone before parting with your money. Any reasonable seller should be happy to recieve a letter and answer the phone.

[Mike Todd]

2 hours ago, The Happy Nomad said:

If that is what happens then yes fine.

 

But if the seller doesnt do that and also ceases to repay the finance then the lender will eventually be allowed to repossess the boat. And regardless of who now thinks they own it they stll can.

 

The buyer then loses both their payment for the boat and the boat itself. Pretty rare but certainly possible. Lose, Lose.

But they do have to convince a court that their paper is better than yours.

 

It is just possible that they borrower did repay the mortgage but the lender 'mislaid' the paperwork.