HTo legally write a vessel bill of sale for a documented vessel, the seller must draft and execute an official Bill of Sale (Form CG-1340) featuring notarized seller signatures, exact ownership interest transferred, official vessel identification details, and consideration.
The buyer then submits Form CG-1340 alongside an Application for Exchange or Transfer of Documentation (Form CG-1258) to the National Vessel Documentation Center (NVDC) or an authorized e-portal to issue an updated Certificate of Documentation (CG-1270).
boat bill of sale example
Legal Requirements for Executing USCG Form CG-1340
Transferring title to a federally documented maritime vessel requires strict adherence to federal maritime law under 46 CFR Part 67. Generic state-level bills of sale or casual contracts are legally insufficient for updating records with the National Vessel Documentation Center (NVDC) in Martinsburg, West Virginia. Instead, vessel owners must prepare and submit USCG Form CG-1340 (Bill of Sale).
Precision in drafting this federal instrument is essential. Administrative omissions or discrepancies between the current Certificate of Documentation (CG-1270) and Form CG-1340 result in immediate rejection, clouding the vessel’s title and disrupting operation in local coastal environments, whether navigating heavy marine traffic in Puget Sound, enduring hyper-local corrosive salt spray in the Florida Keys, or managing seasonal haul-out requirements along the Maine coast.
Mandatory Data Elements on Form CG-1340
- Complete Grantor Details: Full legal names and physical addresses (P.O. Boxes are disallowed without a physical address) of all recorded owners selling their interest.
- Complete Grantee Details: Full legal names, physical addresses, and specified ownership percentages for all incoming buyers.
- Vessel Identification Signals: The exact vessel name as registered on the Certificate of Documentation, the assigned Official Vessel Number (6- or 7-digit ON), and the 12-character Hull Identification Number (HIN).
- Consideration Statement: The exact monetary amount, value, or trade terms exchanged ($1.00 and other valuable considerations is legally permissible if designated).
- Interest Transferred: Explicit statement defining the percentage of interest conveyed (e.g., 100% sole ownership, 50% tenancy in common, or joint tenancy with rights of survivorship).
- Notary Acknowledgment: Formal notarization with official seal, state/county venue, notary signature, and commission expiration date verifying every seller’s execution of the instrument.
Summary of Maritime Documentation Instruments & Forms
| Form / Instrument | Primary Purpose | Required Entity Signatures | Key Legal/Regulatory Reference |
|---|---|---|---|
| USCG Form CG-1340 | Transfers legal title/ownership interest between parties[cite: 12] | Seller(s) only (Must be notarized)[cite: 12] | 46 CFR § 67.99[cite: 12] |
| USCG Form CG-1258 | Applies for Initial, Exchange, Transfer, or Re-documentation[cite: 12] | Buyer / Managing Owner (U.S. Citizen)[cite: 12] | 46 CFR § 67.141[cite: 12] |
| USCG Form CG-1356 | Satisfaction / Release of Preferred Marine Mortgage[cite: 12] | Lender / Mortgagee (Must be notarized)[cite: 12] | 46 U.S.C. § 31325[cite: 12] |
| Abstract of Title (CG-1332) | Displays full chain of title, active mortgages, and liens[cite: 12] | Issued by NVDC / E-Portal[cite: 12] | 46 CFR § 67.301[cite: 12] |
Discharging Recorded Preferred Marine Mortgages and Liens
A signed Bill of Sale cannot successfully convey clear, unencumbered title if an outstanding Preferred Marine Mortgage or Notice of Claim of Lien remains recorded against the vessel. Under federal maritime law, preferred marine mortgages hold a super-priority status and follow the hull regardless of possessory changes.
Before completing settlement, buyers must request an official Abstract of Title (Form CG-1332) from the NVDC. This document reflects the complete historical chain of title and
Steps to Clear Encumbrances Prior to Transfer
- Perform Abstract Audit: Review the official Abstract of Title to identify all recorded financial obligations, lenders, and lienholders.
- Obtain Form CG-1356: Ensure the lending institution executes an official Satisfaction or Release of Preferred Marine Mortgage (Form CG-1356) upon full payoff.
- Record Mortgage Release: Submit the original notarized satisfaction form to the NVDC or through an official secure portal prior to or concurrently with the ownership transfer.
- Resolve Maritime Liens: Confirm that any pending mechanic’s liens, unpaid slip fees from regional marinas (e.g., San Diego Harbor, Chesapeake Bay, or Long Island Sound), or maritime tort claims have been formally released in writing.
Submitting Form CG-1258 and Obtaining Re-Documentation
Once Form CG-1340 is fully executed and all recorded encumbrances are cleared, the buyer must apply for an updated Certificate of Documentation (Form CG-1270). The vehicle for this request is USCG Form CG-1258 (Application for Initial, Exchange, or Transfer of Documentation).
Operational Endorsement Categories
- Recreational: For private pleasure vessels operating in domestic and international waters.
- Coastwise: Mandatory for vessels engaging in commercial passenger transport or freight trade between U.S. ports (subject to Jones Act compliance and U.S. build requirements).
- Fishery: Required for commercial fishing, harvesting, or processing operations within the U.S. Exclusive Economic Zone (EEZ).
- Registry: Designated for vessels engaging in foreign trade.
Citizenship & Entity Verification to Consider When You Write a Vessel Bill of Sale
To maintain federal documentation eligibility, the vessel must be owned by U.S. citizens. For individual buyers, citizenship is affirmed on Form CG-1258. For corporate entities, LLCs, or partnerships:
- LLCs & Partnerships: At least 75% of equity interest and voting power must be owned by U.S. citizens for Coastwise or Fishery endorsements (51% for Recreational or Registry).
- Corporations: The CEO, Chairman of the Board, and a supermajority of directors must be U.S. citizens, with controlling equity held by domestic citizens.
Frequently Asked Questions About How to Write a Vessel Bill of Sale
A valid federal bill of sale (USCG Form CG-1340) must specify the registered vessel name, assigned Official Vessel Number, Hull Identification Number (HIN), full legal names and physical addresses of all grantors and grantees, exact purchase price consideration, exact percentage of ownership interest conveyed, and notarized seller signatures.
What specific information must be included on a USCG bill of sale?
A valid federal bill of sale (Form CG-1340) requires:
- Full legal names and physical addresses of all sellers (grantors) and buyers (grantees).
- The vessel’s registered name, official number (ON), and hull identification number (HIN).
- The exact purchase price or consideration exchanged.
- The specific percentage of ownership interest being transferred.
- Notarized signatures of all current recorded owners.
Yes, the USCG strict compliance policy under 46 CFR § 67.99 dictates that all seller signatures on Form CG-1340 must be officially notarized by a licensed Notary Public before the NVDC will process an ownership transfer or issue an updated Certificate of Documentation.
Does a vessel bill of sale need to be notarized to transfer Coast Guard documentation?
Yes. Federal regulations explicitly state that all seller (grantor) signatures on Form CG-1340 must be acknowledged before a licensed Notary Public. If multiple co-owners exist, each seller signature must be notarized. However, individual acknowledgments may be attached if executed in different locations or jurisdictions.
To complete a documentation transfer, the buyer must submit the original notarized Form CG-1340, a completed Application for Exchange (Form CG-1258), proof of U.S. citizenship, and the required administrative fees to the National Vessel Documentation Center or an authorized documentation portal.
How does a buyer complete the transfer of USCG documentation after obtaining a bill of sale?
After obtaining the notarized bill of sale, the buyer must:
- Verify that all outstanding preferred marine mortgages are discharged with Form CG-1356.
- Complete USCG Form CG-1258, selecting appropriate operational endorsements (Recreational, Coastwise, Fishery, Registry) and designating an official hailing port.
- Submit Form CG-1340, Form CG-1258, citizenship proof, and federal processing fees to the NVDC or through an authorized secure online platform.
- Maintain a copy of the submitted transfer application aboard the vessel as temporary proof of operational authority until the new Certificate of Documentation (CG-1270) is issued.