Potential problem of proof of ownership, and, has the boat a mortgage over it ?

[Alan de Enfield]

 

It is a not-infrequent question from folks buying a used boat - "how can I find out if there is any mortgage on it  and, what you expect to receive as proof of ownership ?"

 

Whilst rooting thru my 'stuff' this afternoon I came across guidance that may help.

 

I'm aware that very few Canal/River boats are registered, but the information also includes 'non-registered boats'

 

What should be concerning is the section in colour RED

 

We recommend carrying out title checks when purchasing either a secondhand boat or a new boat even if buying from an apparently well-established marine company.
We list below some of the checks that you should conduct prior to handing over any money on the purchase of a boat. However, this list is not exhaustive and if you are able to come up with more checks then by all means run them.
If a substantial amount of money is involved in your purchase then you may wish to consider using a specialist Marine Solicitor to carry out a title check.

PART I REGISTERED VESSEL:

If the boat is Part I Registered then we recommend that you apply to the UK Ship Register (RSS) for a Transcript of the Register which will show evidence of any mortgages on the boat. If there is a period of time between obtaining a Transcript and completing the purchase, you should consider obtaining a second Transcript immediately before completion.
When a Finance House grants a mortgage over a boat it will usually insist that the vessel is put on Part I of the Register when lending £75,000 or more. If it does not do so and you make enquiries of the Finance Houses and either receive no response, or confirmation that there is no mortgage, should it come to light at a later date that one of the Finance Houses you made enquiries of does in fact have a mortgage over the boat, a Court of Law may require the Finance House to accept some level of responsibility for failing to warn you of the situation. However, no such case has yet to be decided by a Court, so the position at law is not absolutely certain.

PART III REGISTERED VESSEL (SSR):

If the boat is Part III Registered (SSR) you should again apply for a Transcript however this will not provide any mortgage details but will give you some evidence as to claimed ownership over the period for which the Transcript relates.
If there is a mortgage on a Part III registered or unregistered vessel, despite there being no official record of it on the Register, the Finance House will have a first charge over the vessel which is enforceable against subsequent owners. In the High Court case of The Shizelle (1992) it was held that an unregistered mortgage on an unregistered boat was valid not only against the original borrow but also against any subsequent owner whether or not he knew of the mortgage. Given that a number of leading Finance Houses lend considerable sums of money on the basis of unregistered mortgages, this creates an obvious danger for buyers. We therefore recommend that a buyer carries out the checks below.

IF THE BOAT IS NOT PART I REGISTERED YOU MAY WISH TO MAKE ENQUIRIES OF:

 The Finance Houses – in writing to ascertain if they have any outstanding mortgage on the boat;
 The Vendor’s insurance company – in writing to obtain copy insurance certificates going back 5 years;
 The Vendor’s Yacht Club – in writing for a reference on the Vendor e.g. how long he has been a member/how long he has had the boat;
 The Vendor’s Mooring Company – in writing, to obtain copy receipts for mooring charges during the period the Vendor states he has owned the boat;
 You may also carry out a due diligence check on the Vendor by consulting the electoral roll.

IDEALLY YOU WILL WANT TO SEE THE FOLLOWING ORIGINAL DOCUMENTATION (FOR BOTH PART I AND PART III REGISTERED VESSELS):

 A Certificate of Registry (if the boat is registered);
 Bills of Sale tracing ownership from the very first owner of the vessel to the current Vendor;
 Builder’s certificate;
 Builder’s invoices;
 Original / copy VAT invoice;
 Confirmation of RCD compliance in the form of an owner’s manual (which should include a written Declaration of Conformity), (the manufacturer should have a technical file); or details of RCD exemption;
 An express written declaration from the Vendor that the boat is free of all debts, claims and charges of any kind at all;
 Any other documents in the Vendor’s possession relating to his acquisition of the boat, which may include:
o Equipment manuals;
o Service records;
o Receipts for repair work;
o Racing Certificates;
o Mooring charges;
o Harbour dues.
 

 

 

[magnetman]

"Sold free of encumbrances'

Signature.

 

[ditchcrawler]

26 minutes ago, magnetman said:

"Sold free of encumbrances'

Signature.

 

And that will protect you when the finance company comes to take it back 

[MtB]

1 hour ago, ditchcrawler said:

And that will protect you when the finance company comes to take it back 

 

 

I'd suspect at best it allows the current owner to sue the person they bought the boat from. 

 

If they can find them and if they have any assets. 

 

 

[LadyG]

Before I travelled 400 miles to look at my boat i made sure he owned the boat.

There was a paper trail from first purchase, several BSC, recent bills, things that are easy to send via email. Yes they could be faked, but if you persevere you will find the truth.

I once phoned a mooring owner, who told me about one boat, money outstanding.

The next one the owner wanted me to send money to a Mr Khan, I declined.

If you Google a phone number red flags may appear.

Ask for a copy of driving licence and address, if you hear no more, you have avoided a problem.

I told my boat owner that he would need to sign a Bill of Sale, download from RYA, and witnessed, with full names, and addresses. I sent a deposit, with an email explaining that was a deposit on the boat which was part payment. I mentioned the total cost and the terms and conditions.

He must have been rather fed up, not to say annoyed, once he got the money he was never seen again. He bought a grp in the same marina. He should have a receipt for the boat, and for things he has bought. 

The Bill of Sale is a contract stating boat is free of encumbrances.

Most money loans will be personal, its rare that finance (a lien), would involve a leisure boat.

You have to arrange with your bank if you want to transfer large amounts of money. Make sure you run a small test , ask him how much it is rather than asking if he got your £1.42.

You should avoid losing money to a fraudster, there are plenty of people who would be happy to take few hundred in cash to "do you a favour"

They could show you a boat that just happens to be on loan, hired, or not currently attended by an owner!

A few boats are stolen every year, so you want to be sure this is not one of them.

Edited January 10 by LadyG

[Alan de Enfield]

1 hour ago, LadyG said:

The Bill of Sale is a contract stating boat is free of encumbrances.

 

But is meaningless - as the above referenced  Crown court decison makes clear.

Any unpaid mortgage stays with the boat, irrespective of a new owner, or the owners knowlege of any such debt.

[magnetman]

I wonder how often this turns out to be a problem. 

 

It is the sort of thing which would usually be sorted out at the transaction phase.

 

One would hope that the person buying a relatively high value article (£10k+) would gain a general understanding at the point of sale as to whether the vendor was a blatantly dodgy geyser who is likely known to the local constabulary. 

 

Be careful about the weather. Warm summer days and beers could lower the guard. 

 

 

 

[MrsM]

I have no legal knowledge, but if I was in your shoes .... I would ask the broker if they could share a copy of the previous survey. If they can't (and I doubt they will) I would ask them for information about any issues or problems that were reportedly noted in the survey. I would ask the same of the vendor. Do you know who carried out the last survey? It is little reassurance, but if you can evidence that information that you requested was withheld you might have some recourse, perhaps?

[ditchcrawler]

18 minutes ago, Alan de Enfield said:

 

But is meaningless - as the above referenced  Crown court decison makes clear.

Any unpaid mortgage stays with the boat, irrespective of a new owner, or the owners knowlege of any such debt.

Same as if its stolen. Just because you have a bill of sale

 

7 minutes ago, magnetman said:

I wonder how often this turns out to be a problem. 

 

It is the sort of thing which would usually be sorted out at the transaction phase.

 

One would hope that the person buying a relatively high value article (£10k+) would gain a general understanding at the point of sale as to whether the vendor was a blatantly dodgy geyser who is likely known to the local constabulary. 

 

Be careful about the weather. Warm summer days and beers could lower the guard. 

 

 

 

Braunston Marina once bought a stolen boat 

[MtB]

1 hour ago, LadyG said:

Ask for a copy of driving licence and address, if you hear no more, you have avoided a problem.

 

Or maybe the seller just did, haha! 

 

 

 

(Just teasing, but I expect you know that  ) 

 

 

[magnetman]

18 minutes ago, ditchcrawler said:

[non specified] Marina once bought a stolen boat 

The owner is a blatantly dodgy geyser. I suppose to be fair I should have invited buyers as well as sellers into this domain. 

 

It would be quite rude in some regards to assume that the only dodgy geysers were the vendors .

 

In fact the most dodgiest of all the geysers in this area are clearly performing both of these roles while at time masquerading as gentlemen.

 

 

[MtB]

8 minutes ago, magnetman said:

The owner is a blatantly dodgy geyser.

 

I disagree. Posh TIm is ok as long as you keep a close eye on his hands. 

 

Or did you mean the owner of the boat? 

 

 

[magnetman]

I was referring to the owner of the [non specified] Marina as displayed in my post. 

 

I can't possibly comment on people with names. 

 

 

[ditchcrawler]

Tim put matters right  Endeavour Supplement: The Case of the Stolen Narrow Boat – Baker Street Studios

 

• "The Case of the Stolen Narrow Boat": The proprietor of Braunston Marina, Tim Coghlan, once discovered that a narrowboat on brokerage might have been stolen, leading to a complex investigation that has been referenced in published stories.

Edited January 10 by ditchcrawler

[MtB]

2 minutes ago, ditchcrawler said:

Tim put matters right

 

Thanks. This aligns with my own assessment of what I'd expect him to do in the case of a dodgy boat.