Private purchase of sailing boat

[Katapult Mike]

Originally Posted by jzk

There is a whole class of liens called "maritime liens," and they stay with the vessel even through a purchase. They do not need to be recorded or registered in any way.

Uh yeah, counseler, I disagree with the above. Lots of people can make claims. Whther they stay with the boat through a purchase is another question. If the boat is state registered, yes, the answer will be different in every state and all kinds of things are possible. Generally, there are filing and notice requirements for mechanic's liens. But for a US Coast Guard registered vessel, the only way to perfect a lien is by a filing with the USCG. As a buyer, I would not be worried about claims from anyone who did not do that.

Originally Posted by jzk

When you sign a contract on a boat, be sure that the seller represents that there are no such liens and agrees to be responsible for them.

Now this part I wholeheartedly agree with. OP, there are lot of forms for a boat purchase available onine. You might have to edit one to remove references to a yacht broker, or pay for a form from Rocket Lawyer or something, but that is lot cheaper than hiring a lawyer.

Here is typical form:

http://www.weaverboatworks.com/wp/wp...greement-1.pdf

with language on liens at the top of Section 6.

[more]

Originally Posted by HansTony

Hello,
We’re from the Uk and I’m looking at a boat in the north east near New Haven. We've never purchase a boat of this value before and definitely not in another country. I’ve gone through the process of vetting the boat and I’m happy to proceed with the purchase. It’s $80,000 which is a lot of money to us.
The seller is selling it privately so not through a broker. I’ve identified a document service company to raise all the paper work and check for liens and ownership, but they won’t deal with the money aspect.
The issue I have is the seller wants the money in their bank before signing the sale agreement and so I find this risky as when I transfer the funds he could say that it hasn’t arrived and won’t sign.
I can’t seem to find a bank who will issue a Cashiers Cheque unless I have an American bank account. This method would be the safest and easiest but I can’t find anyone who will produce one.
In the Uk there are reputable law firms that could handle this through an Escrow account. All the legal people here seem to be small independents and so also seems risky as they could just as easily be just as risky as paying the seller.
Appreciate that I might be been paranoid, but I just wondered if there was an alternatives to this process that gives the buyer and seller security.

Thanks in advance

good luck in buying boat. Try open bank account in some bank where seller have bank account,with help of seller. some bank office,some bank guy work with seller. seller must help if want sell boat,If you’re neither a U.S. citizen nor resident, you can still open a U.S. bank account, but your options may be more limited and you’ll likely need to go through a few more steps, including submitting extra documentation and potentially undergoing an interview. You also need to provide a U.S. address — such as seller who resides in the U.S. Normally seler must talk with bank manager and tell bank account is only for escrow money for boat,we close bank account after transaction ecc. bank manager know what to do.

[Networker]

I purchased a boat in Martinique and used this company to handle escrow, as we were also doing private seller/no brokers:

ALL YACHT REGISTRIES NAPLES, INC.

[Reeve21]

Tony, This would cause me to walk away: "The issue I have is the seller wants the money in their bank before signing the sale agreement and so I find this risky as when I transfer the funds he could say that it hasn’t arrived and won’t sign."



But if you try to work this out, here a a couple of Connecticut things to know. CT did not start issuing titles for boats until maybe 5 or 6 years ago, and only on new vessels. Prior to that a lender could file a lien with the secretary of state's office, but I doubt that happened in your case--as the boat had been documented at one point, and it is unlikely a bank would loan against a boat now worth 80k without a federally registered mortgage.


Regarding sales tax, you won't have to pay it unless/until you register the boat in CT. But if you keep it here more than 60 days (excluding any periods of winter storage) they will want the same 3 per cent as a use tax. They issue a bow decal as proof of payment, even for federally documented boats.



If I were doing this and planning on keeping the boat in the Northeast I would get the federal documentation reinstated. I would also look at keeping it in Rhode Island--no sales tax at all there.

[jzk]

Originally Posted by Katapult Mike

Uh yeah, counseler, I disagree with the above. Lots of people can make claims. Whther they stay with the boat through a purchase is another question. If the boat is state registered, yes, the answer will be different in every state and all kinds of things are possible. Generally, there are filing and notice requirements for mechanic's liens. But for a US Coast Guard registered vessel, the only way to perfect a lien is by a filing with the USCG. As a buyer, I would not be worried about claims from anyone who did not do that.



Now this part I wholeheartedly agree with. OP, there are lot of forms for a boat purchase available onine. You might have to edit one to remove references to a yacht broker, or pay for a form from Rocket Lawyer or something, but that is lot cheaper than hiring a lawyer.

Here is typical form:

http://www.weaverboatworks.com/wp/wp...greement-1.pdf

with language on liens at the top of Section 6.

Let's be very clear about what you are saying. If a US Coast Guard documented boat acquires a maritime lien that is not recorded anywhere, it is your position that the lien does not stay with the boat through a purchase?

If that is your position, you are 100% incorrect.

Maritime liens can attach in all sorts of situations. If you don't pay your crew, they have a maritime lien. If you hire a diver to clean your bottom, and you don't pay, that diver has a maritime lien.

That diver can come along years later, and file an In Rem lawsuit against the vessel to collect that debt. Whether or not it is USCG documented is irrelevant. Whether or not the boat was purchased by 10 new owners is irrelevant.

[Cheechako]

Originally Posted by HansTony

Hello,
We’re from the Uk and I’m looking at a boat in the north east near New Haven. We've never purchase a boat of this value before and definitely not in another country. I’ve gone through the process of vetting the boat and I’m happy to proceed with the purchase. It’s $80,000 which is a lot of money to us.
The seller is selling it privately so not through a broker. I’ve identified a document service company to raise all the paper work and check for liens and ownership, but they won’t deal with the money aspect.
The issue I have is the seller wants the money in their bank before signing the sale agreement and so I find this risky as when I transfer the funds he could say that it hasn’t arrived and won’t sign.
I can’t seem to find a bank who will issue a Cashiers Cheque unless I have an American bank account. This method would be the safest and easiest but I can’t find anyone who will produce one.
In the Uk there are reputable law firms that could handle this through an Escrow account. All the legal people here seem to be small independents and so also seems risky as they could just as easily be just as risky as paying the seller.
Appreciate that I might be been paranoid, but I just wondered if there was an alternatives to this process that gives the buyer and seller security.

Thanks in advance

There is no reason to provide any money unless there is a signed sales agreement. That would be insane. Walk away fast. Effectively you have no basis to get your money back or get the boat, you are simply giving him $80k.

I have used a Marine Document agency before and they handled the escrow of the money. That was in Florida though. Maybe you need to find one that will. I wonder if a real estate Title Company would do that on a boat?

[donradcliffe]

In my case the document service handled the escrow. Do not plan on a cashier's check, as there is widespread fraud with those. The best way is international wire transfer of funds, where you can also specify the currency.

For bigger deals, you can work with a big international bank to issue a standby letter of credit, where the bank holds the money until the seller provides proof of the transfer of goods. This is how we solved the problem of selling Russian uranium to the West, where the Russian government refused to export the material until they were paid, and the buyer refused to pay until the material was out of Russia.

[jzk]

Originally Posted by donradcliffe

In my case the document service handled the escrow. Do not plan on a cashier's check, as there is widespread fraud with those. The best way is international wire transfer of funds, where you can also specify the currency.

For bigger deals, you can work with a big international bank to issue a standby letter of credit, where the bank holds the money until the seller provides proof of the transfer of goods. This is how we solved the problem of selling Russian uranium to the West, where the Russian government refused to export the material until they were paid, and the buyer refused to pay until the material was out of Russia.

I did my last two boat purchases as follows. With the first one, the seller and I had the same bank, so we went to the bank, he executed the back of the USCG documentation, and I did a transfer on my phone. Instantly, he could see that he had the funds in his account, and he handed me the documentation. I guess if we couldn't be cool about that transfer of the document, we could have given it to a bank person to hold for us for that few seconds while the money was transferred.

The last one we used a document service in Ft. Lauderdale. They collect the signed documentation and other documents and then turn over to the buyer once funds hit their account.

[Montanan]

HansTony, so you are from the UK.

If a citizen or a permanent resident of the UK you should be able to flag the vessel with UK nationality.

You will need to be a Yank to document the vessel with the USCG, so that doesn't sound like a possibility. Dual citizenship, or dual residency perhaps could avail the Stars and Stripes flagging.

A State of the USA, does not convey nationality to the vessel and registration is only required with States if the State becomes the place of principal use and even then there are exemptions from registration with some States [for example, foreign flagged vessels] Again 50 States, 50 detailed sets of laws and regulations. When one wanders into a State then one needs to give consideration of the jurisdictional issues.

One never gains complete assurance that a vessel is free of encumbrances when you purchase it. One only gets degrees of comfort that it is free of encumbrances. She comes with her history and you just become the new owner.

Obtain representations, warrants and guarantees from the seller as to title being clear of all encumbrances. All three so that you can put back onto the seller for any items that arose before your title transfer, if any. And of course this is only as good as the character and capacity of the seller as to their fulfillment of such assurance.

The exchange by the seller of their executed original and notarized bill of sale and of the notice for delisting of the documentation with the USCG should be concurrent with the transfer of the funds.

All the best.

[Montanan]

You will need to have the Seller promptly notify the State of Connecticut that the vessel's ownership has changed so that it will be deregistered.

Prepare such document to be executed at the time of your purchase closing.

One can call them to find out how such is done. Usually this involves signing the declaration on the back of the registration or title document and sending it to the agency.

Reference Connecticut's online boat registration website:

https://eforms.com/bill-of-sale/ct/c...&affid=2&oid=2


All qualifying vessels must be registered with the Connecticut Department of Motor Vehicles DMV. The DMV’s services are only available through appointments made in their online portal.

Required Documents
Bill of Sale (Form H-31); The USCG Bill of Sale document should suffice in lieu of the State of Connecticut's version form H-31
Vessel Registration and Certificate of Number or Decal (Form B-148);
Manufacturer’s Certificate of Origin or Out-of-State Title/Registration;
Proof of Payment of Sales and Use Tax;
Connecticut driver’s license or valid ID; and
Registration fees[4] (rates vary depending on the vessel’s length)

[Jammer]

Hello, Tony. Welcome to CF.

Originally Posted by HansTony

It’s $80,000 which is a lot of money to us.
The seller is selling it privately so not through a broker. I’ve identified a document service company to raise all the paper work and check for liens and ownership, but they won’t deal with the money aspect.
The issue I have is the seller wants the money in their bank before signing the sale agreement and so I find this risky as when I transfer the funds he could say that it hasn’t arrived and won’t sign.

An $80,000 boat is in that sort of grey area where there's quite a lot of money at stake but where it isn't completely clear that it is worth engaging the services of attorneys, brokers, etc. given the fees.

I can’t seem to find a bank who will issue a Cashiers Cheque unless I have an American bank account. This method would be the safest and easiest but I can’t find anyone who will produce one.

So, typically, the way it works here, is that the seller produces the paperwork for your inspection, signs and notarizes it but does not give it to you, and then you wire the funds. Once the seller confirms through his bank that the wire has been received, he gives you the paperwork.


Can you the buyer get ripped off? Sure, he can throw the paperwork in the latrine and go spend your money and leave you having to take him to court to get your money back. But that's rare. Know your seller -- where does he live, how long has he been there, get a clear photo of some ID, who did he used to sail with, where does/did he work. Take a copy of the proposed but unsigned bill of sale or certificate of documentation before wiring the money. If you have all that and he flakes out you'll have no trouble finding an attorney who will get you your money back.

Appreciate that I might be been paranoid, but I just wondered if there was an alternatives to this process that gives the buyer and seller security.

The system we have is flawed and there are no good alternatives. There is not an airtight escrow process the way there is with real estate.

[Jammer]

Originally Posted by jzk

There is a whole class of liens called "maritime liens," and they stay with the vessel even through a purchase. They do not need to be recorded or registered in any way. When you sign a contract on a boat, be sure that the seller represents that there are no such liens and agrees to be responsible for them.

JZK is completely correct on this.

[Montanan]

If you are not a US citizen, or permanent resident, you and every foreigner on board the vessel will need to obtain a B1/B2 visa from the US Department of State so as to be able to enter the USA legally by private vessel.

You will need to obtain the B1/B2 visa at the US embassy or consulate in the country of your permanent residency, e.g. the UK. B1/B2 visas are processed and issued at your country of permanent residence [the country to which you will return to after your short stay in the USA]. You do NOT request and obtain a B1/B2 visa in the USA. Yes, you may need to return back to your country of permanent residence to have the interview and await the visa processing before coming back to the USA to be able to use your vessel for departing and entering ports of the USA.

The B1/B2 visas requires submission of a non-immigrant visa application and arranging for an interview appointment at the US embassy or consulate.

Depending on which country you have to make the interview with there is a lead time, that can be weeks, months or years to have scheduled the interview and then there is a length of processing time after the interview for administrative tasks.

Be sure to obtain the visas before coming to the USA if you intend to depart and arrive in the USA by your private boat, otherwise you will become stuck in a marina without the ability to relocate to a new port.

The ordinary ESTA and visa waiver program for entry to the USA apply only to arrival by commercial airplane or cruise ship and not by a private yacht.

Also, you should obtain a Federal Cruising License for your boat so as to ease somewhat your US Customs Clearance process every time you desire to move your foreign owned and operated boat from one US port to another.

US Customs and Immigration are another complexity with lots of thread discussions in particular as to private boat entry and reporting.

Lots of bureaucracy to contend with.

Welcome to America.

[MicHughV]

My question would be....why is the seller making you have to jump thru' all these hoops.
It would be to his advantage to smooth the road so to speak.
But it seems you are being made to jump thru' all the hoops.

My gut instinct is to walk away from this deal due to a number or reasons.

Don't forget the boat should get hauled for an out of the water survey, and while you will be obligated to pay for these tasks, the boat remains the property of the seller in the event something happens.
Regardless, I wouldn't be plunking any serious money down until the boat is surveyed and any items that need repairing or replacing, etc done by the seller or discounted to be covered by you.

Your offer should be contingent on the boat passing the survey....and for that matter a seatrial to ensure all is working as it should be.

You are jumping the gun here and need to rethink the matter.

[Jammer]

Originally Posted by Montanan

If you are not a US citizen, or permanent resident, you and every foreigner on board the vessel will need to obtain a B1/B2 visa from the US Department of State so as to be able to enter the USA legally by private vessel.

Whether any of this matters depends on the OP's intended use of the vessel.


If the OP intends to sail the vessel locally in the port of purchase then it may not matter much.


If the OP intends to sail coastwise in the USA, or export the vessel, then there are complexities and some good, situation-specific advice would be called for.