How to check for debts when buying Narrowboat

[dan01eb]

Hi, I'm buying a used narrowboat, ABC are the brokerage. Are there any searches/checks I can do to check for any outstanding debts/finance secured against the boat from the previous owner? Thanks

[Tony Brooks]

No, and as marine mortgages are rarer for canal, boats they are far less likely to have a debt secured against them Most of those bought o credit are done with a personal loan, so any debt stays with the person who took the loan out.

 

All you can do is look at any records the vendor has like a string of mooring invoices, servicing bills, insurance payments and for the CaRT licence. Then check the name and address against the vendor's photo ID if he has any.  On older boats there just might be a weird "pay the actual owner £5 a week to use the boat so you eventually pay for it" agreement in place, but I doubt ABC would broker that sort of boat.

 

[Tracy D'arth]

Only accept a receipt with a guaranteed free from all encumbrances clause. Make sure you know who you are dealing with, their ID and address, plus as many personal details as you can get, along with photographs of them.

 

Ensure that you are buying an individual's boat and not brokers stock if that is what is advertised. Buying stock gives you some legal leverage but only if you are aware.

[Alan de Enfield]

41 minutes ago, dan01eb said:

Hi, I'm buying a used narrowboat, ABC are the brokerage. Are there any searches/checks I can do to check for any outstanding debts/finance secured against the boat from the previous owner? Thanks

 

No, nothing in reality.

 

All you can do is ensure that the contract signed by you and the seller includes the clause (something to the effect) "there is no outstanding debts or liens and the seller is free to sell the boat"

 

This does not stop the seller lying, but in the worse case scenario it does stop you from being charged with knowlingly receiving stolen goods

 

Edit to add - this is the typical BMF clause :

 

1.1. The Seller agrees to sell and the Purchaser agrees to purchase the Vessel free from all debts, claims and charges of every kind subject to the terms of this Agreement for the sum of £xx,xxx (pounds sterling xxxxxxxxx) (“the Purchase Price”)  together with all the gear and equipment bought for and belonging to the Vessel as detailed in the attached inventory but excluding provisions and the Seller’s personal effects. 

 

 

You should also be aware that when buying from a private seller (even via a broker) you are waiving all rights as detauled in the next clause :

 

1.1.1. If the Seller is selling the Vessel in a private capacity  and not in the course of, or for the purpose of a business then, subject to these rights of inspection, survey and sea trial and the other terms of this Agreement (in particular Clause 3.3) the Purchaser waives all rights relating to the condition, quality, description and fitness for purpose of the Vessel, its gear and equipment, and the Purchaser agrees to buy the Vessel, its gear and equipment with all defects and faults of description without any allowance whatsoever.

 

This is what Tracy was warning you about

Edited October 12, 2023 by Alan de Enfield

[Guest]

When we bought our boat back in 2010 I know the broker (rugby boat sales) could check with the very limited number of marine mortgage companies to see if the boat had a marine mortgage secured against it when he took it on to his books.

 

But things may have changed in that time, and a marine mortgage company is as rare as hen's teeth these days though that doesn't mean a company that is no longer dealing in marine mortgages won't still have an interest in a boat.

[dan01eb]

 

1 hour ago, Tracy D'arth said:

Only accept a receipt with a guaranteed free from all encumbrances clause. Make sure you know who you are dealing with, their ID and address, plus as many personal details as you can get, along with photographs of them.

 

Ensure that you are buying an individual's boat and not brokers stock if that is what is advertised. Buying stock gives you some legal leverage but only if you are aware.

On the conditional agreement is says the following. Would this be sufficient providing it's also on the completion documents?..

 

Subject to the terms of this agreement the purchaser agrees to purchase the vessel together with all the gear and equipment belonging to the vessel as listed in the sale details, free from all liens, charges, claims, mortgages and encumbrances of any kind, for the purchase price. The sale shall exclude any provisions or any of the sellers personal effects on board the vessel.

Edited October 12, 2023 by dan01eb

[Tracy D'arth]

30 minutes ago, dan01eb said:

 

On the conditional agreement is says the following. Would this be sufficient providing it's also on the completion documents?..

 

Subject to the terms of this agreement the purchaser agrees to purchase the vessel together with all the gear and equipment belonging to the vessel as listed in the sale details, free from all liens, charges, claims, mortgages and encumbrances of any kind, for the purchase price. The sale shall exclude any provisions or any of the sellers personal effects on board the vessel.

That sounds sufficient to me, I have bought and sold boats with a similar clause, both parties read and sign with a signed witness in attendance.

[Stilllearning]

Yes don't forget to have witnesses to sign too.

[Alan de Enfield]

2 hours ago, dan01eb said:

 

On the conditional agreement is says the following. Would this be sufficient providing it's also on the completion documents?..

 

Subject to the terms of this agreement the purchaser agrees to purchase the vessel together with all the gear and equipment belonging to the vessel as listed in the sale details, free from all liens, charges, claims, mortgages and encumbrances of any kind, for the purchase price. The sale shall exclude any provisions or any of the sellers personal effects on board the vessel.

 

 

Exactly as I posted (a few posts earlier)

That us the norm and the 'best you'll get'.

 

A couple of clauses later you'll see the one about waiveing all rights as to fit fpr pupose, condition etc etc.

[Tacet]

3 hours ago, dan01eb said:

 

On the conditional agreement is says the following. Would this be sufficient providing it's also on the completion documents?..

 

Subject to the terms of this agreement the purchaser agrees to purchase the vessel together with all the gear and equipment belonging to the vessel as listed in the sale details, free from all liens, charges, claims, mortgages and encumbrances of any kind, for the purchase price. The sale shall exclude any provisions or any of the sellers personal effects on board the vessel.

This wording better suits a conditional agreement for sale than the final transfer.

[dan01eb]

I've checked and the boat is 16 years old, the current owners purchased 13 years ago and there's a bill of sale in the current owners name on file. The current owners are also known buy the marina as they have done a lot of work for them over the last 10 years (engine services, blacking, painting and new fit out etc).

[MtB]

5 hours ago, Stilllearning said:

Yes don't forget to have witnesses to sign too.

 

Why does one need witnesses? 

 

I asked my solicitor back in the mists of time and he said (something like, and IIRC) one only needs witnesses for the signing of a deed. Whatever that is. 

[MtB]

23 hours ago, Stilllearning said:

Yes don't forget to have witnesses to sign too.

 

How does that help, if the seller turns out to be a fraudster?

 

 

[DandV]

 Brokerage businesses are very largely built on reputation. And a good reputation is hard earned but easily lost with missteps. 

Sales going wrong are very damaging to reputation, so there is a very considerable incentive on reputable brokerages to minimise the risk of them being a party in any fraudulent transaction.

So by buying through a reputable broker you are already taking a significant step in reducing the risk of the boat being a security registered  against a debt. 

And if you have asked the right questions reduced the risk of buying a dud. 

 

[MtB]

10 hours ago, DandV said:

 Brokerage businesses are very largely built on reputation. And a good reputation is hard earned but easily lost with missteps. 

Sales going wrong are very damaging to reputation, so there is a very considerable incentive on reputable brokerages to minimise the risk of them being a party in any fraudulent transaction.

So by buying through a reputable broker you are already taking a significant step in reducing the risk of the boat being a security registered  against a debt. 

And if you have asked the right questions reduced the risk of buying a dud. 

 

 

I don't really buy that. 

 

What steps do brokers take to check "to minimise the risk of them being a party in any fraudulent transaction"?

 

And why can the private buyer not take those same steps themselves?  And is this not the same question the OP is asking?

[Alan de Enfield]

1 hour ago, MtB said:

 

I don't really buy that. 

 

What steps do brokers take to check "to minimise the risk of them being a party in any fraudulent transaction"?

 

And why can the private buyer not take those same steps themselves?  And is this not the same question the OP is asking?

 

As the boats are not registered and no one knows who owns a boat, and hence have no record of any debts against the boat the Broker can do nothing more than an individual can.

 

Whilst inland boats are not normally listed on the UK Ships Register, it used to be (maybe still is) a requirement of having a marine mortgage that the boat was part 1 listed, and then you could search the records and find out if there was a debt against the boat.

 

Part 1 registration - commercial or pleasure boats

You can use Part 1 of the register if you have either:

• a commercial boat, unless you plan to use it for fishing
• a ‘pleasure vessel’ - this means you do not make any money from it

Registering your boat on Part 1 of the register means you’ll be able to:

• get a marine mortgage against your boat
• spend more than 6 months outside the UK

It costs £153 to register for 5 years.

You’ll be sent a renewal notice when it’s time to renew. It costs £72 to renew your registration for another 5 years.

Edited October 14, 2023 by Alan de Enfield

[dan01eb]

12 hours ago, DandV said:

And if you have asked the right questions reduced the risk of buying a dud.

I guess I'm trying to find out what the right questions are?

 

So far I've found out the boat was built in 2007 and the current owners purchased it in 2010 (there is a bill of sale from 2010 in the current owners name) but I don't know anything about the owners from 2007 to 2010. 

The current owners are well known by the marina/brokerage as they have done a lot of work on the boat for them over the last 10 years but they didn't moor at the marina.

The boat does have a valid BSS and it was last blackened and engine serviced a couple of years ago. It has also had a new partial fit out within the last couple of years.Thanks

10 minutes ago, Alan de Enfield said:

 

As the boats are not registered and no one knows who owns a boat, and hence have no record of any debts against the boat the Broker can do nothing more than an individual can.

 

Whilst inland boats are not normally listed on the UK Ships Register, it used to be (maybe still is) a requirement of having a marine mortgage that the boat was part 1 listed, and then you could search the records and find out if there was a debt against the boat.

 

Part 1 registration - commercial or pleasure boats

You can use Part 1 of the register if you have either:

• a commercial boat, unless you plan to use it for fishing
• a ‘pleasure vessel’ - this means you do not make any money from it

Registering your boat on Part 1 of the register means you’ll be able to:

• get a marine mortgage against your boat
• spend more than 6 months outside the UK

It costs £153 to register for 5 years.

You’ll be sent a renewal notice when it’s time to renew. It costs £72 to renew your registration for another 5 years.

I've heard of part 1 registration but how can I search to find out if the boat is already registered? Or is it a case of registering and then it will display any existing registration? Thanks

Edited October 14, 2023 by dan01eb

[Alan de Enfield]

5 minutes ago, dan01eb said:

I guess I'm trying to find out what the right questions are?

 

So far I've found out the boat was built in 2007 and the current owners purchased it in 2010 (there is a bill of sale from 2010 in the current owners name) but I don't know anything about the owners from 2007 to 2010. 

The current owners are well known by the marina/brokerage as they have done a lot of work on the boat for them over the last 10 years but they didn't moor at the marina.

The boat does have a valid BSS and it was last blackened and engine serviced a couple of years ago. It has also had a new partial fit out within the last couple of years.

Thanks

I've heard of part 1 registration but how can I search to find out if the boat is already registered? Or is a case of registering and then it will display any existing registration? Thanks

 

It is almost guaranteed not to be Pt 1 registered - but if it is it will have the number on the side of the boat.

 

My (SSR = Small Ships Register) numbers look like :

 

[ditchcrawler]

6 hours ago, Alan de Enfield said:

 

As the boats are not registered and no one knows who owns a boat, and hence have no record of any debts against the boat the Broker can do nothing more than an individual can.

 

Whilst inland boats are not normally listed on the UK Ships Register, it used to be (maybe still is) a requirement of having a marine mortgage that the boat was part 1 listed, and then you could search the records and find out if there was a debt against the boat.

 

Part 1 registration - commercial or pleasure boats

You can use Part 1 of the register if you have either:

• a commercial boat, unless you plan to use it for fishing
• a ‘pleasure vessel’ - this means you do not make any money from it

Registering your boat on Part 1 of the register means you’ll be able to:

• get a marine mortgage against your boat
• spend more than 6 months outside the UK

It costs £153 to register for 5 years.

You’ll be sent a renewal notice when it’s time to renew. It costs £72 to renew your registration for another 5 years.

How do I prove its mine to register, sons a handy selling aid 

[Alan de Enfield]

8 minutes ago, ditchcrawler said:

How do I prove its mine to register, sons a handy selling aid 

 

There is a list of evidence that you must provide

 

You’ll need:

the dimensions of your boat

the previous registration details of the boat (if it’s been registered before)

the bill of sale

the radio signal detail - including your UK radio call sign, Maritime Mobile Service Identity (MMSI) number and International Maritime Organization (IMO) number (If applicable)

the builders certificate

a certificate of survey for tonnage and measurement

an international tonnage certificate (ITC69)

safety certificates

 

And the owner will need to be :

 

 

The following persons are qualified to be the owners of ships to be registered on Part 1 the Register:

* UK citizen

* British dependant territories citizen

* British overseas citizen

* company incorporated in one of the European Economic Area (EEA) countries

* citizen of a EU member state exercising your rights under articles 48 or 52 of the EU Treaty in the UK

* company incorporated in any British overseas possession which has its principal place of business in the UK or those possessions

* company in an European Economic Interest Grouping (EEIG)

* Commonwealth citizens

* citizens listed in Schedule 6 (http://www.legislation.gov.uk/uksi/2019/509/contents/made)

* non-United Kingdom nationals who are settled in the United Kingdom

* bodies corporate incorporated in a Commonwealth state

* bodies corporate incorporated in a country listed in Schedule 6 (http://www.legislation.gov.uk/uksi/2019/509/contents/made)

If none of the qualified owners are resident in the UK, a representative must be appointed who is either of the following:

* an individual resident in the UK

* a company incorporated in one of the EEA countries with a place of business in t

Edited October 14, 2023 by Alan de Enfield

[MtB]

On 12/10/2023 at 11:39, dan01eb said:

Hi, I'm buying a used narrowboat, ABC are the brokerage. Are there any searches/checks I can do to check for any outstanding debts/finance secured against the boat from the previous owner? Thanks

 

I don't think anyone has actually explained in the thread yet that most boats purchased with a loan are not attached in any way to the loan or to the lender. The boat buyer obtains a personal loan to buy the boat and once purchased, he or she is free to sell the boat if they wish and just carry on paying the loan off. If the loan payments stop the loan company have no rights over the boat, they pursue the borrower defaulting on the loan. So accidentally buying a boat previously bought on finance which has not been settled almost certainly will have no negative consequences for you.

 

This scenario does not apply with a marine mortgage however, as the boat is put up as security for the mortgage. But vanishingly few narrowboat purchases are funded with marine mortgages.

[Richard10002]

2 hours ago, MtB said:

 

I don't think anyone has actually explained in the thread yet that most boats purchased with a loan are not attached in any way to the loan or to the lender. The boat buyer obtains a personal loan to buy the boat and once purchased, he or she is free to sell the boat if they wish and just carry on paying the loan off. If the loan payments stop the loan company have no rights over the boat, they pursue the borrower defaulting on the loan. So accidentally buying a boat previously bought on finance which has not been settled almost certainly will have no negative consequences for you.

 

This scenario does not apply with a marine mortgage however, as the boat is put up as security for the mortgage. But vanishingly few narrowboat purchases are funded with marine mortgages.

 

But:

 

It looks like any boat on which a mortgage has been secured, will have been required to be Part 1 registered by the lender. Thus, if the register is searched, and the boat is not found, it significantly lessens the risk of a loan being secured against it.

 

I have no idea how to search the register to find out if a boat has a loan secured against it, or not - any ideas?

[David Mack]

If the vendor has owned this boat since 2010, and a marine mortgage was used to fund the purchase back then, it is more than likely that any 5 year SSR registration will not have been renewed, so searching the register might not find anything anyway.

 

If the boat has good provenance back to 2010 how likely is it that anybody else will turn up claiming title to it? 

[MtB]

11 minutes ago, David Mack said:

If the boat has good provenance back to 2010 how likely is it that anybody else will turn up claiming title to it? 

 

And is it possible to claim title to a chattel anyway? I thought the term applied to estates in land. 

 

By the way, never take legal advice from a gas technician.