Yacht documentation is a form of registration. It is conclusive evidence of nationality. And if you are buying or selling your boat, this documentation will make the process a lot easier. But what if the vessel has outstanding liens? What will happen to the boat?
Outstanding Liens and Yacht Documentation
If there are outstanding liens or encumbrances on a vessel, it may not be possible to transfer ownership or sell the vessel until the debts are settled. When you purchase a vessel, you expect to receive a clear title, free from any liens or encumbrances that could impact your ownership rights. If the boat has liens or encumbrances, it means that other parties have a legal claim against the vessel. It can create complications for the buyer and seller.
If you are buying a boat, you will conduct a title search on the vessel before you complete the purchase to ensure that there are no outstanding liens or encumbrances. If encumbrances are found, you may ask the seller to resolve these issues before the sale is completed. It can involve negotiating with the creditors to settle the debt or paying off the debt to release the encumbrance.
Collateral for a Loan
Some boat owners use their vessels as collateral for a loan. If you are purchasing a boat that is used as collateral, the creditor may have a security interest in the vessel. In this case, you and the seller would have to work with the creditor to ensure that the lien is released before the sale can be completed. It is vital to note that a vessel may be seized and sold by the creditor to recover the outstanding debt if the debtor defaults on the loan.
Selling or Transferring Ownership
Outstanding liens on a vessel can make it difficult to sell or transfer ownership. It is vital to resolve these issues before attempting to sell the vessel to avoid complications and legal disputes. If you talk to us, our team can assist in resolving any outstanding liens or encumbrances on a boat as part of the vessel documentation process.
Documenting Your Vessel
Now, if the boat has no outstanding liens or encumbrances, it will be a lot easier to purchase the vessel and transfer the title to your name. Do you wish to document it? Documenting it is a vital step in ensuring its legality and compliance with state and federal regulations.
To be eligible for vessel documentation, the boat must be at least 5 net tons in size and you must be a US citizen. You will also need to provide various documents, including a bill of sale or builder’s certificate, proof of ownership, and proof of US citizenship or legal presence. Once you have gathered the vital documents, you can complete the application for documentation, either online or through the mail. Along with the completed application, you will need to submit the required fees for processing and issuing the documentation.
Making the Process Faster
You can process the yacht documentation on your own. But if you want the faster way, then make sure to use our forms.