Putting A Lien On A Boat: What You Need To Know

If you are looking to put a lien on a boat, there are a few things you need to know. Firstly, it is important to understand the difference between a state-registered vessel and a documented vessel. For a state-registered vessel, you will need to check with the relevant state agency, as the process may vary depending on the state. On the other hand, if the boat is documented and subject to national registration, you will need to check the title through the National Vessel Documentation Center, which is a branch of the Coast Guard. This process will require the boat's official number. Additionally, it is worth noting that maritime liens are a unique part of the legal system and there are specific requirements for them to be enforceable.

Maritime liens are claims against a vessel that can be enforced by seizing the property

Maritime liens are a crucial aspect of maritime law, providing security to creditors and promoting commerce. They are legal claims against a vessel or its cargo, allowing creditors to seek payment for debts or obligations incurred in connection with maritime activities. Maritime liens are unique as they attach directly to the vessel itself, giving lienholders the right to seize and sell the vessel to satisfy the debt. This right is known as the right of arrest.

To initiate the process of claiming a maritime lien, one must have a legal claim against the vessel owner. This could include unpaid repairs, storage fees, or other debts. Once a valid claim is established, the lienholder can file a notice of lien with the appropriate authority, such as the county recorder's office or the Department of State, Division of Corporations, depending on the location and nature of the lien.

It is important to note that maritime liens are not static and can be extinguished or waived under certain circumstances. For example, a clear record of the sale by the seller can terminate the lien. Additionally, maritime liens can be waived by agreement or implication, but courts require clear evidence of an intention to waive the lien.

In the context of purchasing a used boat, it is essential to conduct a thorough inspection and check for any existing liens. This can be done by reviewing the abstract of the title, which details the vessel's sales history, liens, name and home port changes, among other pertinent information.

When enforcing a maritime lien, legal proceedings must be initiated to ensure due process. The lienholder may file a suit in rem against the vessel, and the court may order the arrest of the vessel to secure the claim. The arrest of the vessel is a crucial step in enforcing the lien, providing security for the claimant's interests.

A preferred ship mortgage is a lien recorded against a vessel documented with the US Coast Guard

A preferred ship mortgage is a type of mortgage that protects the lender. It is a lien recorded against a vessel documented with the United States Coast Guard and is safeguarded under the Ship's Mortgage Act of 1920. This type of mortgage takes precedence over all other liens, except for preferred maritime liens. It secures the first note and any future extensions or advances on the vessel.

As the mortgagee, you may withhold disbursements until the documentation on the ship is complete and correct, and acceptable inspection documents are filed with the Coast Guard. The mortgage must cover the total value of the boat and cannot be approved unless the vessel has a valid certificate of documentation or an Application for Initial, Exchange, or Replacement on file with the lender. The mortgage form includes signatures from each party's owners and their respective addresses.

The preferred ship mortgage has several advantages. It provides priority over all other liens against the vessel, and the US Coast Guard cannot make certain modifications to the vessel's documents without the lender's permission. Additionally, the bank will not release the money to the documentation agent, and the ship will not be burdened by inadequate insurance.

To search for liens on a boat, you can use the CGMIX Coast Guard Port State Information Exchange to search for Coast Guard-documented vessels by name, Hull Identification Number, or Official Number. You can also request a USCG Abstract of Title to find current liens, encumbrances, or mortgages recorded on a documented vessel. This report costs $75 and generally takes 2-3 business days to produce.

A lien arises at the time a written statement of lien is sent to the vessel owner

A lien is a claim or legal right to a debtor's property or other assets, typically used as collateral to back a loan. It serves to guarantee that the underlying obligation will be satisfied. If not, the creditor can seize and sell the assets in question. Liens can be invoked by the creditor if the debtor fails to meet their obligations.

In the case of a boat lien, a lien arises at the time a written statement of lien is sent to the vessel owner. This is known as a mechanic's lien, and it can be attached to the boat if the owner fails to pay for services rendered. If the debtor never pays, the lienholder could go to court and get a judgment ordering that the boat be auctioned off.

The process of placing a lien on a vessel can vary depending on the state and local laws. In Florida, for example, a marina can put a maritime lien on a vessel for unpaid costs, storage charges, or dockage fees. The lien attaches at the time the services or goods are provided to the vessel. If the owner does not pay, the lien can be "perfected" by following a few additional steps outlined in the state statutes.

To initiate the process, a lien form must be filed with the appropriate state agency, such as the Florida Department of Highway Safety and Motor Vehicles. This serves as official notice to the owner of the vessel. It's important to note that the requirements and procedures for filing a lien may differ based on the specific circumstances and the state in which the vessel is located.

After the lien form is filed, there is typically a waiting period to allow the vessel owner to satisfy the lien. If the owner fails to pay within the specified time frame, the lienholder can then proceed with the sale of the vessel to recoup the amounts owed, along with any associated interest and costs.

A lien may be placed on a boat for compensation for making repairs, performing labour, or storing the vessel

To enforce the lien, one must file a suit against the vessel. The lien can be recorded so that any potential buyer is aware that the boat has a lien on it, but this is not required. If the debt is less than a certain amount (for example, $8,000), suing the vessel owner in Small Claims Court may be the best option. For larger amounts, suing the vessel itself "in rem" and asking a federal district court to have the U.S. Marshal arrest the vessel is a more complicated and expensive option that requires the assistance of an attorney well-versed in Admiralty and Maritime Law.

In the state of California, the Department of Motor Vehicles outlines specific procedures for vessel liens. Every person has a lien (dependent upon possession) for compensation for making repairs, performing labour, storing, or safekeeping of the vessel. The lien arises when a written statement of lien (bill) specifying the charges for services and/or storage is sent to the vessel owner(s). A fair market value statement, completed by a licensed yacht and ship broker, must be sent along with the Notice of Pending Lien Sale to the DMV headquarters.

To check for liens on a boat, one can perform a lien search on a Coast Guard Documented Vessel through the CGMIX Coast Guard Port State Information Exchange. Additionally, a USCG Abstract of Title can be requested from the National Vessel Documentation Center for a fee of $75.

A lien can be placed on a boat for unpaid crew wages

Maritime liens can be the result of contracts or torts, including unpaid crew wages, freight charges, damage caused by the boat, personal injury, and breach of charter, among other circumstances. Any potential lien holder has the right to file a claim of a lien on a vessel. The first step is to send a notice to the owner of the boat, alerting them to the intention to file the lien. This notice should also be sent to any co-owners of the boat, as well as to any other person or entity with a lien against the vessel. If payment is not received, the next step is to file the claim of lien with the Vessel Registrar Center.

The claim document should also be sent to others with a lien and co-owners of the boat. It will then appear on the boat's abstract of title, which makes it easier for prospective buyers to see if there is a lien on the boat. Refusal from the owner to pay the lien can result in the seizure of the vessel. This involves taking action in federal court, which places the boat under a maritime lien. The vessel can then be subject to an arrest warrant that allows a United States marshal to seize the watercraft. This is typically only done with high-value vessels but can happen with any kind of boat, depending on the court's decision.

It is important to note that foreclosing on a maritime lien can be extremely expensive, and the cost may easily exceed the amount claimed against the vessel. The foreclosure process requires the filing of a lawsuit in a U.S. District Court, seeking a warrant for the civil arrest of the vessel by U.S. Marshals. The Marshals require a deposit of $5,000 to $20,000, depending on the type of boat and the rules of the district. After the arrest, the Marshals will transfer custody of the vessel to a commercial custodian, who will require a significant deposit and submit monthly bills for their services. Additionally, there will be attorney's fees, which can be significant, especially if the claim is disputed.

Therefore, it is essential to consider the costs and benefits of foreclosing on a maritime lien for unpaid crew wages. While it is a legal right to secure payment for services provided to the vessel, there may be other options for recovering unpaid wages, such as filing a lawsuit against the owners in state court for breach of contract.

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