[boatpoker]

I think some of you are making this unnecessarily complicated. The previous owner -- not the boat -- has a legal obligation to the marina. The new owner has no relationship with the marina. Inanimate objects cannot enter into contracts, only people, or in the case of a corporation an "artificial person," can sign a contract.

The primary issue the new owner faces is the possible lien on the asset (the boat). The secondary issue could be a desire to carry on doing business with the existing marina.

A marine lien placed by the marina on the boat follows the boat regardless of the owner. I've been involved with several such cases and will be testifying (as to condition & valuation) in one such case this summer. So yes, the buyer could buy the boat then lose it to the lien holder(s).

 

[tempest]

PDFfiller

www.dochub.com

Above is a sample form of a Warranty of Title. The form is signed by the seller and notarized.
Even if the Marina gets paid, I'd still have your friend obtain a document like this from the seller.
They are easy enough to find online.

He can also find sample purchase and sales agreements. Or ask a local broker.

 

[Sailormon6]

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.

 

[MikeOReilly]

A marine lien placed by the marina on the boat follows the boat regardless of the owner. I've been involved with several such cases and will be testifying (as to condition & valuation) in one such case this summer. So yes, the buyer could buy the boat then lose it to the lien holder(s).

Yes, that's why I mentioned (twice) the issue of a lien, but the debt is owed by the PO, not the new owner; not unless the sale agreement specifically includes past encumbrances (which should be a HUGE red flag). A lien is made against an asset as a form of surety. The marina can foreclose on the asset to recoup their loss, but the debt is still the PO's.

A lien must be registered, so it's relatively easy to check whether one exists. There is also a process for registering one -- it's not a slam-dunk -- and there's usually a small cost involved.

I'd search the public registry of the jurisdiction to check regarding a lien. If there is none, then the new potential owner is good to go.

 

[OntarioTheLake]

If there's any risk of a lien, aside from having the seller sign that nice document, I'd get the boat out of the area ASAP.

I watched a lien train wreck once on a 65', it ended up with a chain being installed around the prop, an extremely heated multi-party argument on the dock (purportedly with armed parties), and finally a bunch of expensive court hearings. As soon as one court ordered the chain removed poof the boat disappeared.

Kinda like a couple divorce boats I knew- the wives' lawyers had people crawling all over every port in the area to find those boats. None were ever located until after the divorce, after which they miraculously reappeared.

 

[vbiz59]

Make no mistake, the marina will be made whole. Contact the marina manager. I recently did the same and I paid the marina fees directly and the balance to the PO.
Pretty simple to cover your arse.

 

[OntarioTheLake]

Yes, that's why I mentioned (twice) the issue of a lien, but the debt is owed by the PO, not the new owner; not unless the sale agreement specifically includes past encumbrances (which should be a HUGE red flag). A lien is made against an asset as a form of surety. The marina can foreclose on the asset to recoup their loss, but the debt is still the PO's.

A lien must be registered, so it's relatively easy to check whether one exists. There is also a process for registering one -- it's not a slam-dunk -- and there's usually a small cost involved.

I'd search the public registry of the jurisdiction to check regarding a lien. If there is none, then the new potential owner is good to go.

In some US jurisdictions liens are still recorded on paper and not available online. And, a lien can be issued in Sacramento for a boat in Niagara Falls, and wouldn't show up in NY records (they really aren't supposed to do this, but it happens all the time.) IF the marina has a lien, that means they already had a judgement, and leveraged that to get the lien, all of which is court approved. That then is stuck like glue to the boat, and would follow the sale and be passed on to the new owner. Go search up Carvana and the problems that have happened with their customers buying cars with "surprise" liens.

 

[MikeOReilly]

In some US jurisdictions liens are still recorded on paper and not available online. And, a lien can be issued in Sacramento for a boat in Niagara Falls, and wouldn't show up in NY records (they really aren't supposed to do this, but it happens all the time.) IF the marina has a lien, that means they already had a judgement, and leveraged that to get the lien, all of which is court approved. That then is stuck like glue to the boat, and would follow the sale and be passed on to the new owner. Go search up Carvana and the problems that have happened with their customers buying cars with "surprise" liens.

The lien is still publicly available, is it not? It is possible to find out. The potential new owner could also try and ask the marina. This might produce an answer.

All this discussion of liens, and debts owed, would really make me question buying this boat. If the owner owes money to the marina, what else is going on?

 

[sailguy40]

Thanks for all the responses here folks, good to know. My friend did contact marina, they said there isn't any lien on the boat. Turns out there's also an agreement between the marina and the seller. Once the boat is sold, they'll be paid what's owed which is under a couple thousand which is what the seller originally said. So turns out at least the seller was being honest about it. The marina had good to say about the guy (he was there for years) so no bad ties there either. Plan is, he sells the boat minus what's owed from the price. However, my bud found a couple other boats he likes better so I doubt he's buying the boat (btw a Catalina 27) I mentioned here anyway. I was just trying to look out for him since I was seeing red flags at first, so i told him I'd ask here to see what people thought.

 

[MikeOReilly]

Thanks for all the responses here folks, good to know. My friend did contact marina, they said there isn't any lien on the boat. Turns out there's also an agreement between the marina and the seller. Once the boat is sold, they'll be paid what's owed which is under a couple thousand which is what the seller originally said. So turns out at least the seller was being honest about it. The marina had good to say about the guy (he was there for years) so no bad ties there either. Plan is, he sells the boat minus what's owed from the price. However, my bud found a couple other boats he likes better so I doubt he's buying the boat (btw a Catalina 27) I mentioned here anyway. I was just trying to look out for him since I was seeing red flags at first, so i told him I'd ask here to see what people thought.

Sounds like what I suggested could happen earlier, with the sale money paying off any debt. And good on your friend for simply asking the marina about any lien. Isn't it great when people talk to each other, instead of spinning themselves up into a tizzy.

 

[tempest]

Sailguy, Thanks for the Update. We appreciate that. We often never find out the outcomes of questions like this. So thanks for the follow up.

That said, the link I posted to a Sample, Warrantee of Title should be SOP in any boat purchase of that sort.

Your friend will also likely need to have a survey performed in order to obtain insurance. It may be possible that an insurance company would accept a "recent" survey, if one could be obtained. It's best to run that by the ins. co. first though.

 

[Sailormon6]

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.

 

[MikeOReilly]

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.

 

[Sailormon6]

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.

 

[Ineptune]

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.

I don't know what state you are in, but that is not the case in my state and, without trying to be a dick, what you are saying doesn't make sense. The entire point of a lien is not only to secure a debt, but to put the public on notice. In NC you don't have a perfected mechanic's or materialman's lien until you file it and you'd better file it on time. And then you'd better sue on it on time.

Here'sa little primer from the NC Bar. Check with an attorney in your state so you know what happens in your jurisdiction:

https://www.ncbar.org/wp-content/uploads/2021/07/Claims-of-Lien-Step-by-Step-Guide.pdf

 

[Sailormon6]

Check with an attorney in your state so you know what happens in your jurisdiction:

https://www.ncbar.org/wp-content/uploads/2021/07/Claims-of-Lien-Step-by-Step-Guide.pdf

I am an attorney in my state. I have been for 55 years.

 

[MikeOReilly]

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.

You mean, you can't do that without the warrant? I doubt that. I suppose it makes it easier...

This all makes no sense. A lien is a public document. It has to be certified by an authority, usually the courts. There is no value in trying to hide it, unless you are trying to act surreptitiously, in which case we're into something completely different.

 

[MikeOReilly]

I don't know what state you are in, but that is not the case in my state and, without trying to be a dick, what you are saying doesn't make sense. The entire point of a lien is not only to secure a debt, but to put the public on notice. In NC you don't have a perfected mechanic's or materialman's lien until you file it and you'd better file it on time. And then you'd better sue on it on time.

Here'sa little primer from the NC Bar. Check with an attorney in your state so you know what happens in your jurisdiction:

https://www.ncbar.org/wp-content/uploads/2021/07/Claims-of-Lien-Step-by-Step-Guide.pdf

I've never heard it working SM's way in any jurisdiction. Which state do you operate in SM? People should know so they can protect themselves.

 

[MikeOReilly]

Editing mistake

 

[OntarioTheLake]

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.

Good luck with that. In USA the court doesn't give you money, you get a Judgement against offending party. I have $10,000 in Judgements I'll sell you for $2000.

If the other party (against which you have a judgement) doesn't own anything of value you can't do a damned thing. If they own [not lease] a car, you have to take the judgement back to the court and get permission to grab the offender's car. Then take it to the local cops, who may or may not elect to tow it to impound. Then the debtor might pay to get the car; if they can't or won't, you can then have the car sold. This all costs money and time and overall has a low rate of success.