Title Search, Liens, etc

F

frank2644

Member
Aug 16, 2008
77
Long Island, NY
Boat Info
270 Sundancer 1995
Engines
454 Mercruiser Bravo II
I may buy another boat and I am concerned that there may be liens against it.

How can I discover any liens?

I spoke to NY State MV and they will not give me any lien information unless I own the boat.

Is there any such thing as title insurance like there is when you buy a home?

Thanks.
 
Are you getting a loan on this boat? If you are, every time I got a loan on a boat the agent of the bank did this as part of his services. I don't know how to do it on your own.
 
In NY the lienholder is listed on the title that the DMV issues. The seller should be able to show you the title and you can check it yourself.
If the seller had a loan and satisfied it they will get a letter from the lender that they can forward to the DMV with their title, and the DMV will issue a new title with no lienholder listed on it.
Very often the owner will neglect to send the letter and title to the DMV. Many times they don't do it because the NYS DMV charges a fee to issue the new title. In these cases the title and letter are good enough to transfer to the new buyer. In these cases, a smart buyer will contact the lender to verify the authenticity of the letter.
 
Thanks for all the replies.

I am not getting a loan on the boat itself, I am using a home equity loan.

I think the seller has an open loan on the boat so there will be a lien. How is that handled? Does the lien holder have to be involved in the transaction? Also, I think the outstanding loan balance is greater than the sale price of the boat. I would guess that may cause some problems.

In any case, I would like to get title insurance, but where do I go to get it?

Thanks again.
 
frank2644 said:
Thanks for all the replies.

I am not getting a loan on the boat itself, I am using a home equity loan.

I think the seller has an open loan on the boat so there will be a lien. How is that handled? Does the lien holder have to be involved in the transaction? Also, I think the outstanding loan balance is greater than the sale price of the boat. I would guess that may cause some problems.

In any case, I would like to get title insurance, but where do I go to get it?

Thanks again.
Click to expand...

I went thru this with a car purchase.... I met the seller at his bank (lien holder) we sat down with a banker, the seller presented his cashiers check, I present mine and the banker signed the title over to me.... rules may very from state to state. You could contact a yacht broker and ask who they use as an escrow agent and they would have some type title insurance available...?
 
douglee25 said:
Check with Boat US. I think they may be able to help or at least point you in the right direction.

Doug

Edit: I knew I had read something before. They have a settlement service. Here is the ticket.

http://www.boatus.com/boatloans/service/default.asp
Click to expand...
Interesting link, thanks.

That link led me to the USCG site which seems to offer "Abstract of Title" and other related docs at a reasonable price. I assume these docs would show any liens, etc.

If my purchase of a new boat gets serious I'll pursue this.
 
There will be no 'title' if the boat is Federally Documented. The documentation record provides that function.

Regardless of documentation, you need to keep in mind that all boats are subject to Maritime Liens. A maritime lien is created every time the boat owner incurres a debt related to the boat. The other nasty feature is that the boat is not collateral for the debt, the boat is actually considered to be the debtor. Thus if person A creates a debt for his boat and then sells the boat to person B, the debt holder does not need to chase Person A, he can go to B and re-possess the boat (arrest is the term).

These things are expensive to pursue, but if the boat is also expensive and if the the debt is large enough, someone might come back at you. I have been told by Admiralty lawyers I have worked with that there is insurance for this situation. You might contact a law firm that practices admiralty law if you are buyinga big ticket boat.

Henry
 
In NYS, the seller needs to satisfy the loan before he gets a "Lien Release" from the bank. Once he has the "Lien Release", he can sell you the boat.
I wouldn't fork over any money until you see the "Lien Release".
 
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