Oustanding Finance on a boat...

[BlueStringPudding]

Hello all,

 

A question came to me today: How do you actually find out whether a vendor actually owns the boat he/she is selling? If a marine mortgage or loan was secured on it, then the boat is surely the property of the financial company and not the vendor.

 

Where do you begin looking for proof of ownership? And what is that proof going to be? (Receipt of previous sales, deeds of some sort, etc?)

 

Thanks.

[Gary Peacock]

Hello all,

 

A question came to me today: How do you actually find out whether a vendor actually owns the boat he/she is selling? If a marine mortgage or loan was secured on it, then the boat is surely the property of the financial company and not the vendor.

 

Where do you begin looking for proof of ownership? And what is that proof going to be? (Receipt of previous sales, deeds of some sort, etc?)

 

Thanks.

 

Basically in the UK there isn't a lot you can do other than be careful!

[BlueStringPudding]

Careful!?!?!?

[Gary Peacock]

Careful!?!?!?

 

If it's a newish boat speak to the builder, if it's changed hands recently speak to previous owners but that's about it.

 

A marine mortgage is secured against the boat but without some one chooses to tell you that you can't find out about it.

 

Unfortunately in the eyes of the law you can't buy something from someone who doesn't own it.

 

In the US dealing in boats is very much like dealing in cars a procedure is followed under law and a paper trail left.

 

You can have a look at the RYA info on the subject HERE but I think they are saying much the same!

[MasterDabber]

I guess that means you don't get any more protection buying via a Broker?

[BlueStringPudding]

Checked out the link and you're right - the RYA say much the same thing.

 

That's pantaloonies for us punters, isn't it!? What's stopping people from buying a boat with a marine mortgage or loan and flogging it for cash, then scarpering!?!? Nowt, by the sounds of things. It's a worry, really.

 

I don't fancy the idea of spending £30,000 on a boat only to have it nabbed by someone else's debt collectors. Does anyone know any cases of this actually happening?

[honey ryder]

a bill of sale, insurance documents etc... the insurance in particular will show all interested parties in the boat.

 

my insurance document shows my name, my dads name as he was a guarantor and my finance company.

 

the finance company insist you have insurance in order to get the finance in the first place.

the bill of sale is in my name only, i cant remember if it says my finance company name on it as well... im not sure it does

 

to have a licence you must have insurance.. so therefore anyone licenced will be insured and you can check that way.

 

there is always loopholes though... so if you see on the bill of sale that they bought it from a brokerage, they will have record of the sale and if the sale included finance...

[stuart]

You could ask the buyer permission to undertake a credit search in their name - although I doubt many people would like this.

[khaffra]

a bill of sale, insurance documents etc... the insurance in particular will show all interested parties in the boat.

 

my insurance document shows my name, my dads name as he was a guarantor and my finance company.

 

the finance company insist you have insurance in order to get the finance in the first place.

the bill of sale is in my name only, i cant remember if it says my finance company name on it as well... im not sure it does

 

to have a licence you must have insurance.. so therefore anyone licenced will be insured and you can check that way.

 

there is always loopholes though... so if you see on the bill of sale that they bought it from a brokerage, they will have record of the sale and if the sale included finance...

 

The brokerage we sold our last boat through got us to sign a bit of paper saying we owned the boat outright, not sure the legal implications if it turned out we didn't and who would be held to blame.

I am almost certain our insurance company have never asked whether we owned the boat outright or if it was part of a finance agreement.

Not sure how you can check if you are buying a boat privately.

[carlt]

I am almost certain our insurance company have never asked whether we owned the boat outright or if it was part of a finance agreement.

 

My insurance doesn't even have the boat's name on it.

Edited April 19, 2007 by carlt

[PeterF]

There is some limited checking you can do. We called HPI to check on the boat we bought. This is copied from their website.

 

Boats

BOATMARK is the national register of marine craft operated by HPI on the behalf of the British Marine Federation (BMIF).

 

The increased level of boat ownership in the UK has led to a rise in the number of boat related thefts and fraud. BOATMARK records the boat details, based on the Hull Identification Number (HIN) given at manufacture. When a boat is purchased, the new owner can record themselves as the keeper. This means that the boat can be tracked at every stage, from factory to dealer and from the dealer to customer.

 

Before buying a boat contact BOATMARK to check whether the boat is free from finance and that the person selling the boat has the right to do so.

 

Call BOATMARK on 01722 413346 for further information.

 

See [post=http://www.hpicheck.com/newfrontend/caravans_boats.jsp]http://www.hpicheck.com/newfrontend/caravans_boats.jsp[/post]

 

You need the Hull number - ours was prominantly welded onto the swim plate. Of course if someone has used an unsecured loan as part of the finance then ou will never track that down. My father in law nearly lost a caravan he had bought that the seller had defaulted on the unsecured loan used to buy it. He ended up settling some extra payment to the building society rather than lossing it or paying for it twice. His friend had bought a car off the same person and the same story - unsecured loans are hard to track.

 

Peter.

[Gary Peacock]

Now do you think there is any check on duplicate HIN or CIN numbers?

 

There wasn't so is there now?

[Gary Peacock]

Thinking about that even further there isn't any legal requirement to even have a hull number on a non CE marked boat!

[anhar]

...Of course if someone has used an unsecured loan as part of the finance then ou will never track that down. My father in law nearly lost a caravan he had bought that the seller had defaulted on the unsecured loan used to buy it. He ended up settling some extra payment to the building society rather than lossing it or paying for it twice. His friend had bought a car off the same person and the same story - unsecured loans are hard to track.

 

This story doesn't make sense. If the seller of a boat had an unsecured loan, then the finance company cannot repossess it in the event of default because by definition, that loan was never secured on the asset that it was used to finance and they have no direct rights over it. Thus the buyer of a boat that a seller had financed by this method has nothing to fear. The problem arises only where the finance is secured on the boat. Then the lender has the right to repo it even from an innocent buyer.

 

regards

Steve

Edited April 20, 2007 by anhar

[mikevye]

Having found out the hard way I can vouch for the fact that very few finance houses will lend secured money against the boat. The majority will lend against the individual on a personal loan basis. Royscotlarch, Barclays are the two main funders and a phone call to either will eliminate 90% of the market straight away. A victim of this problem may never know as long as the repayments are made by previous boat owner until repaid but that would be mega expensive money. We have recently been quoted 4% over a variable base rate currently 5.5% which for £30,000 would have resulted in a total repayment of £48,000 assuming the base rate didn't alter. Those lovely people at Barclays are so kind!

[PeterF]

This story doesn't make sense. If the seller of a boat had an unsecured loan, then the finance company cannot repossess it in the event of default because by definition, that loan was never secured on the asset that it was used to finance and they have no direct rights over it. Thus the buyer of a boat that a seller had financed by this method has nothing to fear. The problem arises only where the finance is secured on the boat. Then the lender has the right to repo it even from an innocent buyer.

 

regards

Steve

Steve,

You are right I was doing two things at once when I posted my note, running Canalworld whilst waiting for some on line IT help chappy in another IE window and rushed.

 

Yes, my father in law did get stung by buying a caravan that the seller should not have sold and I was wrong in stating it was an unsecured loan which it clearly was not or the lenders would not have had any call on it. The problem was that the loan did not appear on the checks even though it was secured. I do not know why but it did not, hence the checks are not infallable. So when the owner defaulted on the loan, the finance company tried to reposses said caravan to find that the owner had sold it and spent all the proceeds. Hence father in law was faced with total loss of the caravan or some compromise extra payment which was obviously better than losing it. If finance company had reposesed the caravan, then with all the fees and then trying to sell it on they would not have got much in the way of net proceeds hence they compromised. father in law still has a caravan along with signed document from lender that he now has free ttitle and they rescind all claims and instaed of the bargain he thought he had he has still paid probably slightly lesss than market price.

 

Needless to say when we were buying our boat my wife was a little nervous as the boat cost 5 to 6 times more than the caravan her dad got stung on. We also got the piece of paper from the previous boat owner stating hat he held full title to it and did not have any outstanding loans or mortgage secured on it. But as someone else said in an earlier response, if the person is bankrupt, lives in rented house and is in default on loans what can you sue him for if he was telling porkies when he signed the piece of paper.

 

Peter.

[Supermalc]

Perhaps???? there is a business idea here. Start a database of boats, owners, finance etc. If there are 90,000 boat on inland waterways (just a guess) at only £10 a time, well it's a tidy sum to have in the bank.............only outlay is a decent computer with backup.

[Maverick]

Just a thought and I know this doesnt prove proof of ownership but may help put our minds at ease. can we not contact BW to ensure the person selling the boat is actually the licenced keeper of it? Maybe when applying for insurance it is mandatory to list any finance owing on the boat. BW have a copy of this insurance.

 

They may as well use there computers to help in this way. I understand the data protection act may come into force here but if I rang them to say I was thinking of buying a boat with licence No:000000 and was it listed with them as being owned by Mr X XXX of 23 etc etc and was a 40 footer surely they could confim the info I had provided without there being an issue.