do I need a Marine Documentation Agent?

[Robin3]

Originally Posted by Brooderman

The paperwork may be easy - that's not my biggest concern. If the previous owner, or the one before him, and so on (up to a statute of limitation time limit and even old liens can be renewed. Varies from state to state) has a judgement or tax lien, those liens attach to the boat when that person owns it. If the person already owns the boat and gets a judgement or tax lien it attaches as well. When said person sells the liens don't get removed - you buy the boat with the liens attached too.

So my big worry isn't paperwork - it's a clear title. That's why on houses there is title insurance (among other reasons like being sure the house is really on the land you purchased.

I'd want whoever was searching the past history of liens, judgments, and mortgages to located in the area the transactions takes place - not in another state where the laws may be different.

I don't know if there's even such a thing as title insurance on a boat - but I'd buy it if there was. The older the boat, the more owners there have been, the greater the exposure for this kind of problem.

I've been shopping for a boat and came close to an accepted offer then discovered the owner had only owned the boat for a month before putting it up for sale and then didn't record any transfer documents.

It felt like the perfect scenario for a title problem. So I didn't complete the sale.

To me, the paperwork is the minor issue - clear title is the major issue and with boats costing as much as houses and even treated as such for some tax purposes it seems like there must be title insurance available.



So... who has that answer?

We have bought two documented boats and both times used an agent. In the 2nd instance, our current boat, there was a mortgage recorded but although paid off by the previous owner years before was still showing on the documentation. It took the agent some time and skill to sort this out with the lender recorded and delayed completion several days, might have been much harder/longer if we had tried it ourselves. I guess it depends on the amounts of money involved, ours was a cash purchase, no mortgage. and the fee was small relative to the purchase cost overall.

[Cheechako]

It may depend on your confidence that all is right with the current situation, no liens etc. A boatyard can file a lien on your boat, the PO may not even know there is one. Your number seems high to me. You can find your own agent, so you might want to compare $. I have done it myself or done it thru an agency. One nice thing about an agent is you can tie final payment on the boat to the title search.

[reed1v]

Originally Posted by vjm

If your boat was documented before you purchased then the two week turn around time to transfer documentation is pretty normal (AFAIK) and not a function of using an agent. Documenting for the first time is a much longer wait.

Not much longer. We documented our Grand Banks about six years ago. First time, did it on the website. got the documentation and stamp in about two months. Easy process. They had a backlog so everyone was waiting.

[wrwakefield]

Originally Posted by Brooderman

The paperwork may be easy - that's not my biggest concern. If the previous owner, or the one before him, and so on (up to a statute of limitation time limit and even old liens can be renewed. Varies from state to state) has a judgement or tax lien, those liens attach to the boat when that person owns it. If the person already owns the boat and gets a judgement or tax lien it attaches as well. When said person sells the liens don't get removed - you buy the boat with the liens attached too.

So my big worry isn't paperwork - it's a clear title. That's why on houses there is title insurance (among other reasons like being sure the house is really on the land you purchased.

I'd want whoever was searching the past history of liens, judgments, and mortgages to located in the area the transactions takes place - not in another state where the laws may be different.

I don't know if there's even such a thing as title insurance on a boat - but I'd buy it if there was. The older the boat, the more owners there have been, the greater the exposure for this kind of problem.

I've been shopping for a boat and came close to an accepted offer then discovered the owner had only owned the boat for a month before putting it up for sale and then didn't record any transfer documents.

It felt like the perfect scenario for a title problem. So I didn't complete the sale.

To me, the paperwork is the minor issue - clear title is the major issue and with boats costing as much as houses and even treated as such for some tax purposes it seems like there must be title insurance available.

So... who has that answer?

Brooderman,

I could not sum it up any better than Sea Dreaming. Our stories are the same.

Obtaining vessel documentation is only a small portion of their overall responsibilities.

Their value is increased if there is a prior loan or leans on the vessel, and again if you have a loan involved.

We paid cash, but the prior owners had a residual loan to take care of... That [and USCG documentation] all happened quickly and efficiently by the documentation agency... I think I only spoke to them twice, and the 2nd time was to arrange signing final papers and the escrow transfer...

You can shop around for your own agent so they represent you. I don't know if they need to reside in the state where you are conducting the transaction [however local knowledge may be helpful if there are any local factors...]

Depending upon the amount of the transaction, the agent fees are likely small a fraction of a percentage of the overall, perhaps making the decision easier. [i.e., Risk for many increases proportionally (or sometimes inverse-proportionally...) depending upon the impact of the purchase on one's overall finances.]

If the transaction is small enough that the agent's fee is a significant percentage of the overall purchase, then it may be time to re-examine your risk tolerance and possibly skip the agent since you wouldn't be taking a large financial risk in this case. [i.e., If the purchase price is small enough that the agent fees are a factor, can you afford to walk away leaving your money on the table?...]

Best wishes with your decision and acquisition.

Cheers!

Bill

[Cheechako]

.... and don't assume the agent is doing their job either, ask questions. I've asked title questions in real estate closings that they hadn't checked.

[jmschmidt]

A lien search on the national Vessel Registry costs 25 bucks. Coast Guard docs are free and the schedule of filing fees are on their website. We purchased a French flag yacht so what they call a deflag/reflag was necessary. Even this is pretty simple but the seller had trouble producing a builders certificate with a signature it so we turned it over to a documentation service. Still only cost $400.

[bruce v]

Sorry guys but documentation is only as good as the paper it is written on. And, agents are only as good as their past reputation (do some sincere online review work if you are set on using one. This should be a mater between you and the buyer, the locale at which the vessel is stationed i.e. marina and you. That being said, because you are in Florida, it is best you check with their rules as they tend to change from year to year (sometimes day to day. A lot of good advice might be well intentioned but you will know if you are in your comfort zone. You can do as much research as most agents do on your own and save yourself a chunk of change. Your own inspection and criteria for concerns seems to address the potential problems that concern you. Again, I would trust myself more than agents or the government. If you go through the documentation process with the USCG (as you have done before) the remainder is going to be speculative at best. Good luck with the process.

[Cotemar]

Coast Guard Documentation is a very easy DIY process.

Just go to the National Vessel Documentation Center online website for forms needed.

The (FAQ)Frequently Asked Questions will point you to the forms you may need.

USCG National Vessel Documentation Center, Home Page

[puffcard]

I would use one in buying an out of state boat especially in Fla. It cuts down a ton of head aches on what can be a very stressful situation. Nice to get there have the travel papers in hand and you're ready to go. I've bought a boat with and without using documention services.

[Smokeys Kitchen]

We used one on both of the large sailboat transactions we did (not on the little runabout when bought or sold) and we were glad we did both times.

The first time we bought a Canadian boat and imported it to the US. The Documentation Agent worked closely with the Import Broker to make sure all the fees were paid and the paperwork was in order with CBP. Worked out great; took less than 15 minutes to import the boat/clear Customs in Bellingham when we brought it down from Vancouver.

The second time, we had a 3 way sale/purchase and the Documentation Agent helped out a lot to make sure the 1031 exchange (i.e. getting credit for the tax on the old boat we sold to some else) went smoothly. Again - it really helped out a lot.

Neither boat was financed, but since they both involved a significant amount of money, we felt good about getting all the I's dotted and T's crossed. The first instance was @ $700 and the second one was @ $900.

[Cadence]

Originally Posted by SoundWave

Found an ideal boat for our use in Miami (We're in NC)
Flew down and inspected it, looked good. Put in an offer, it was accepted!

We are getting ALL the surveys, and we have engaged a buyers broker to facilitate the transaction.
This is our first brokered boat, each previous purchase has been between individuals.

Both the selling broker and our buying broker ask if we're going to use a documentation agent. (the boat is USCG documented, and we will do same)

-=-
Their value proposition:

• "Our USCG package price is $695.00 and includes:
• Lien searches on the vessel – with its registry as well as the local DMV if in a tax state
• Lien searches on the seller – UCC & public record searches for liens, bankruptcy, divorce, etc.
• Prepare all buyer & seller documents
• Seller documents include a separate Warranty of Title instrument that is expanded language (vs. the few lines on a standard bill of sale) to cover unrecorded liens, duty, taxes, etc.
• If there is a current mortgage on the vessel we obtain the payoff letter with wiring instructions for the broker. After closing we go after the bank for the satisfaction of mortgage instrument for discharge & record it
• Transfer USCG Documentation – change of name & hailing port if needed
• Provide a temporary running package after closing
• Loads of little items –
• Confirm good standing & incumbency of all companies, trusts, estates, powers of attorney;
• Make sure we have a Bill of Sale with price for certain states requiring this;
• For vessels in Florida we assist with reporting removal of the vessel to the Dept of Revenue."

-=-

It kind of feels like a title company in a real estate transaction.

Now, I dislike dealing with govt. agencies as much as the next person, and I am surely prone to a mistake or an oversight being busily employed and out-of-state. So I guess this is akin to the DIY or hire a pro question.

Q: Is a Marine Documentation Agent something you used when you bought?

Being in NC I guess you are referring to title insurance from heirs property.

I am not sure I see that there. Even at that, heirs only covers the purchase price.

I would guess it is the extent of the documentation hang ups and your purchase price. It could simplify the process. Try making that expense a condition of the sale taken from the purchase price. It would seem the responsibility of a clean title is upon the seller?

For that amount the seller has a bird in hand not waiting for the one in the bush.

[jmschmidt]

The Bill of Sale must be on Coast Guard Form CG-1340. Any lien to be perfected must be on a Preferred Ship Mortgage for a loan or similar Lien form for trades-persons or shipyards and filed with the CG. These will show up on a CG Abstract of Title ($25 the last time I did one).

[rthompsona]

We have done it both ways. Our first cruising boat was purchased at inland marina. The marina owner was the original owner, and knew the entire chain of people that had owned it. Because of that we were not worried about the title.
We purchased the boat and did all the paperwork ourselves. Since we were planning to take it to the ocean, we filed to reactivate the documentation number. It did not take long to handle the paper work.

Our current boat was purchased through a brokerage. We knew very little about the history. For her, we used a documentation service provided by the brokerage phone. They did the title search and handled both the registration and the documentation.

As it turned out, we learned that we had actually made a mistake on our first boat. It was registered in Florida and then we reactivated the documentation. We now know that we should have re-registered it using the documentation number.

I do not think doing it ourselves was that hard, but if you do not know/trust the PO, you never know what will come up.

[jpstevens]

Save the money. It's a bit tedious, but not at all hard to do. We did it for ours, and spent only modest fees to the USCG.

[SoundWave]

Thank you for sharing your recommendations and experiences, good info.

Yep, I can do the USCG paperwork no problem, it's not hard.

Brooderman raised the deciding point, the more important goal is investigating and trying to ensure a clean title.

We're going to hire the Marine Documentation Agent, let them handle everything paperwork, for peace of mind and also convenience.

Appreciate all the help!