Lien Search - Ontario

[r.j.dawg]

A buddy of mine is up at his marina today doing some work before he splashes this weekend. He just sent me a text that Bailiff's just showed up and repo'd a boat. The owner was there and was told the PO didn't pay off the bank when he sold the boat two years ago.:wow:
Does anyone know how you do a lien search on a boat in Ontario?:huh:

 

[tdschafer]

Holy crap!!! That sucks!! I guess when he bought the boat he should have made out seperate checks? One for the bank and one for the crook that sold it to him!

 

[mvoellinger]

Here in the US the lien would be recorded on the title, and a title can't be transferred without the lien being released. Did he have a clear title?

 

[chuck1]

Here in the US the lien would be recorded on the title, and a title can't be transferred without the lien being released. Did he have a clear title?

Only if it is a boat title state. Not all are. GA is not a title state. Would have to search the UCC filings.

 

[r.j.dawg]

If I remember correctly, when I bought my last boat, all I needed was the bill of sale with the PO's signature and the Transport Canada application for license transfer form. Nothing was on it about liens that I remember. When I got the new copy back in the mail showing me as the owner, I took a copy to the bank that I got the loan from. Mind you, this was back in the early 80's. Things may have changed now.

 

[mvoellinger]

Only if it is a boat title state. Not all are. GA is not a title state. Would have to search the UCC filings.

Ah, did not know there were states that didn't title boats.

Here in FL there wont give me a paper title if it has a lien on it. I just paid off my truck a few months ago and have to wait for them to mail it, or go to the DMV and request title and pay a fee

 

[Henry Boyd]

Boat liens are a complicated issue. Besides being created as under a personal property debt, they are also covered by Admiralty Law. I can't speck to Canadian personal property law, but I have picked up a few things related to Admiralty Law. Admiralty Law is uniform from country to country by international treaty, so the following would apply. The distinction between the two is that under personal property, the debtor pledges the boat as collateral for the debt. Under Admiralty Law, the boat itself is considered the debtor. Any and all debts or financial obligations incurred for a vessel are subject to a maritime lien; mortgage, repairs, dockage, fuel etc. At the time the debt or obligation is created there is no lien filing, or recording. So even doing a title search can miss a pre-existing obligation. There are different levels of maritime lien based on the type of obligation that afford the bank, or vendor different levels of recourse in the event of default. However they all share one common trait. The bank, or vendor need only go to the Admiralty court and make a claim that a debt is owed. Depending on the type of debt, the court will then issue an order to either secure the vessel ("Arrest"), or to secure some other tangible asset. The court is not adjudicating the claim, just taking steps to insure that the debtor does not move any assets out of the court's jurisdiction before the matter can be heard. At that point the power of the lien kicks in. The only way to stop this is for either the claimant to drop the demand, or the claim to go all the way through the court. In any event as long as the claim is in place the vessel, or other assets are frozen.

Since the vessel is considered the debtor, this effectively allows the claimant to hold the boat for ransom. In RJ Dawg's dockmate's case he may well be asked to pay off the bank ad pursue the PO for re-payment.

All boats are covered by Admiralty Law. Non Documented boats included, but there can be a jurisdictional squabble. Documented vessels are under Admiralty Law by definition. That's why banks want to larger boats Documented; they can go into any maritime nation on the planet (with a functioning court system) and retrieve a vessel.

Henry

 

[Old Vet]

"Does anyone know how you do a lien search on a boat in Ontario?"

I think a bank might be a good place to ask this question.

If someone is buying a boat and has to finance it.....I would think the bank would want to know there were no liens on it before carrying on with financing. So they would/should obviously know how boat lien searches are done.

I have no idea but that's the route I'd try. :huh:

 

[northern]

Based on the boats I have bought in Canada there is no mention of liens on title. If you purchase through a boker you could state on the sale the vessel is free and clear of leins, that might make the broker look for you. I bought a boat in Washington and before it was transfered to me there was a state document coving that the boat was free and clear of leins. I think there was a cost for it.
This is something in Canada we never think of. I supose he could go after the person who sold it to him and if there was a broker him also.
I have never financed a boat perhaps other Canadian who have could comment.

 

[r.j.dawg]

Well this whole situation has me concerned. I am buying the 290 through a dealer here on Lake Simcoe. They are a reputable dealer but my intention is to pay in cash. I have been Googling this all day and there doesn't seem to be any mechanisim in place here to protect a boat purchaser. I could purchase a $200,000 house and have all the protections around between lawyers, land transfer agents and the like. But buy a $200,000 boat and it seems to be buyer beware. Not that I am spending that much on my boat but I really don't want to be out $23,000 if a Bailiff can just come and seize my boat and there is nothing in place so I can protect my interest.

 

[Henry Boyd]

I believe there is insurance that can be purchased to protect a boat buyer from having a maritime lien claim placed on the purchase. Let me put it this way, I know it is written, whether it would make economic sense might be another thing. You might check with an insurance agency that specializes in marine insurance. You might try Global Marine. They may not be able to sell you the insurance, but certainly could tell you what firms write it.

Henry

 

[Creekwood]

In Canada most liens on title are done through PPSA registration. For a small fee you can do a search and get the information sent to you.

Here is the link

http://www.ppsa.ca/ppsaca/

I did it when I bought my last boat. No perfect guarantee, but better than doing nothing, and its a drop in the bucket in terms of total cost of buying.

 

[Jimmy Buoy]

I purchased my current boat from an Ontario used boat dealer and he took my previous boat in on trade. It is my understanding that the dealer MUST check for leins before being able to sell the boat. It is part of being a licenced dealer. The dealer also collects sales tax and it is his responsibility to forward the tax to the Canadian Government.

If it is a brokered boat, in my opinion you are still really purchasing the boat from the owner. I'm not sure if the broker has a responsibility to ensure "clear title", but I would doubt it. He's just acting as a go between for the seller and purchaser (much like a real estate agent). If I was buying a $200G boat this way, I would be getting a lawyer to complete the deal just like purchasing a home. They should safeguard against undeclared leins.

Private sale? I would still use a lawyer for a sizeable purchase, although my previous two boats were purchased privately (one for $25G and one for approx. $40G) - no lawyer. I did some investigating myself and was satisfied that all was on the level. Fortunately I wasn't duped either time!

In Ontario you do not get anything to prove ownership other than your receipt of purchase and the Customs Registration Paper with your name and boat information hand written on it but with an official "stamp". No title document. No deed. A bit odd - don't you think?

A boat loan is treated the same as a car loan here. The lender registers a lein and renews it each year with a Provincial office. There is a fee for each year's registration built into the loan figures. A visit to your local court house should result in getting the lein information that you need. Just make sure that you have the hull serial number (the one on the starboard transom that starts with SER... for Sea Ray) for them to complete the search.

I'm no expert, but that's my read on the topic! :huh:

Best of luck!