Boat Sale Closings

Or how not to get sued after taking possession of your new boat.

Too often some of the details get passed over in the excitement of finally taking possession of your new yacht. You have done your due diligence and had the boat surveyed and taken her for a sea trial. You know that any issues that were raised have been addressed to your satisfaction either through repair or a negotiated price reduction. You take delivery and your family enjoys the boat for a year.

Then you get sued for $50,000 by a creditor for work performed on the boat for which they were never paid. But the work was done over two years ago! This was a year before you had even heard of this boat let alone taken ownership of it. Your attorney gives you the bad news that you are indeed liable for the outstanding bill.

The unpaid vendor applied a lien on the boat for the amount of the outstanding debt. No one bothered to let you know about this lien nor did anyone tell you that the lien goes with the boat and not the previous owner. That debt will follow the boat anywhere in the world. That is maritime law. This even applies to you if you are not a citizen of the United States of America and have the boat exported to your home country.

This scenario could have been prevented by following the many steps necessary to close the sale of a boat. Following these well established procedures should prevent this type of unnecessary surprise after you take possession.

Reputable yacht brokers usually have a person on staff that will take you through all the steps. If they do not have anyone onboard who can perform all the necessary documentation they must refer you to a documentation company who will handle these matters for you for a minimal fee. If you are financing the purchase using a bank that specializes in boat loans this service may be provided to you in house again for a fee.

The documentation required should include but is not limited to the following; a signed sale agreement, a signed acceptance of vessel, an original copy of the title or boat registration, identification for the buyer and seller, an Abstract of Title, a signed Bill of Sale, a loan approval, bank and wire information, a Removal Affidavit if you will not be paying sales taxes, insurance, possible removal from a foreign registry and more. This must be replicated if there is a tender, dinghy and other toys involved in the sale. Many of these documents will have to be notarized.

When exporting the boat from the United States to another country you will need a Manufacturer’s Statement of Origin, a Builder’s Certificate and several other documents which I will talk about in another article.

Call me at (954) 614-1663 if you need some guidance or have any questions. You can also reach me by email by addressing it to david@oasisyachts.com. If you found this article to be helpful I encourage you to subscribe to this site. Use the subscribe button in the upper right hand column of this page for more informative articles on buying a yacht.

2 thoughts on “Boat Sale Closings”

  1. David,

    I am looking for a yacht (25 – 35 footer). I am looking for a “deal”. I have never owned a boat before, but I have a place in the Maryland area where I can store it. I am willing to travel to Florida to purchase. I have heard that people are bringing boats to FL and leaving them. I am sure some of them have problems, if that is true. I don’t know what deals are out there like real estate (30 – 40 cents on the dollar). Do you know of any good deals on boats/yachts that sleeps anywhere from 4 – 8?

    Thanks,

    Sebastian

  2. Sebastian:

    I suggest that you look in your local newspapers for bank foreclosures. Shipping a 25 – 30-foot boat from Florida to the NE will cost from $5,000 – $12,000. A great deal in Florida might not be such a good deal by the time you get her home. If you have exhausted all local sources for a “deal” then please contact me.

    The news media loves a good story. It is not true that people are bringing their boats all the way to Florida to abandon them. Don’t believe everything you read or see on TV.

    Incidentally, if you do find a great deal you had better take advantage of it in a hurry. Boat builders are not building new boats because dealers cannot get the financing to take new inventory. Once the aged new inventory is gone (another 3 – 4 months) used boat prices will get back to normal market values.

    Good luck in your search, and fair winds!
    David

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