SailNet Community banner
  • SailNet is a forum community dedicated to Sailing enthusiasts. Come join the discussion about sailing, modifications, classifieds, troubleshooting, repairs, reviews, maintenance, and more!

My friend is buying a boat, previous owner owes slip fees so...

4963 Views 56 Replies 18 Participants Last post by  bwaherne
My question is, if my friend buys the boat, is it now his responsibility to pay those slip fees that the previous owner owes? Or is that between the previous owner and the marina?
1 - 7 of 57 Posts
Include all three parties in the discussion. The goal should be to make everyone satisfied. The seller might negotiate with the marina to accept less than the full amount of rent. The marina might accept less if they get it out of the sale proceeds. The seller might be satisfied to receive most of the purchase price. If your friend gets the boat he expects for a price he considers reasonable, he should be satisfied. Your friend should proceed with caution in dealing with any person who is in financial distress.
A lien can attach to an item of property in two ways. The owner can pledge the property as security for a debt, or a lien can attach to an item of property by operation of law. In the latter case, there doesn't have to be a written agreement between the parties, in order to create the lien. The lien attaches because a state statute says a lien exists. An example of the latter is a mechanic's or materialman's lien. State law says that, whenever a person repairs the property of another, or provides materials to be used for it's repair, a lien attaches until the mechanic or materialman is paid for his parts and service. A search of public records will disclose the former types of liens. Mechanic's and materialmen's liens cannot generally be found by searching public records. A buyer needs to protect himself from unrecorded liens by his contract with the seller.
  • Helpful
Reactions: 1
As I said in my previous post, you can't check the public records to find all the liens that might exist. Some liens are created by operation of law, without any recorded document. Mechanic's and materialmen's liens are an example. If you have your car repaired by a mechanic, he has a lien on it for the cost of his services, and he doesn't have to record a document. He has a legal right to keep your car until he is paid. Eventually, he can foreclose on his lien, even if someone else bought it. Whenever you buy a house or car or boat, you need to require the seller to warrant that the title is free and clear of all liens, recorded or unrecorded. If the item had an undisclosed lien against it, you will have to pay it off to get clear title to the property, but you then have a right to recover it from the seller. Tempest is correct in his posts above. Checking for recorded liens is not enough to protect you when you buy property.
So what is? If you are correct, it's never possible to know for sure.

That's right. That's why you require the seller to warrant that the title is free and clear of all liens. By doing so, the seller guarantees that there are no liens. If one is later discovered, you can sue him for breach of his warranty and recover it from him.
  • Like
Reactions: 2
Check with an attorney in your state so you know what happens in your jurisdiction:

I am an attorney in my state. I have been for 55 years.
  • Like
Reactions: 1
You mean, you can't do that without the warrant? I doubt that. I suppose it makes it easier...
Remember the principle, "Let the buyer beware." If you buy the boat or car or property without a warranty, you buy it as it is, and subject to any liens or defects in the title. That's why you buy real estate with a warranty deed, and not a quit-claim deed. You want the seller's warranty that there are no outstanding liens or legal claims against the property.
  • Like
Reactions: 3
In general, the mortgage company requires you to buy title insurance to protect against any defects in the title.
At the outset of my career I was a title attorney for a major title insurance company. At that time, banks and other mortgage lending companies required buyers of real estate to buy title insurance to protect the banks and mortgage lenders against any defects in the title. However, that did not protect the buyers of the property. If the buyers wished to be protected against undiscovered defects in the title, they had to pay an additional premium. At that time, title insurance companies did not insure against unrecorded liens, such as some mechanics' and materialmens' liens. Even when liens are recorded, a search of the records might not disclose them. Experienced title examiners can fail to notice a recorded lien. People make mistakes. Some commit fraud.

Vessel title insurance is available for boats.

Law, BOATINGLAW.COM Vessel Title Insurance
Vessel Title Insurance Helps Protect Assets
1 - 7 of 57 Posts