Ask a Maritime Attorney
USCG Documentation vs. DMV Registration: What Are the Differences?
When I bought my boat nearly 20 years ago, it was registered with the California Department of Motor Vehicles. The boat has a six-digit number engraved on a bulkhead in the engine room, and I am informed that this is probably an old Coast Guard documentation number that must have been used by a prior owner. I have applied for a loan that will be secured by the boat, and the finance company has indicated that it will require the boat to be Coast Guard documented. I am a little confused by this process, and I am hoping that you can shed some light on it. First, why is the lender requiring Coast Guard documentation? Are there any advantages or disadvantages to Coast Guard documentation? If the boat is re-documented, what needs to be done with the California registration paperwork? Will this cause the county to reassess the value of the boat for property tax purposes? What about sales or use tax assessed by the state?
Buying a Boat vs. Buying the LLC That Currently Owns It
I am a yacht broker representing both the buyer and seller in a transaction involving a boat that is titled into a Delaware limited liability corporation (LLC). The buyer has completed the sea trial and survey, and the parties are preparing to close, pursuant to the provisions of the vessel purchase agreement. The buyer is also considering the purchase of the LLC itself, to avoid payment of California sales or use tax and to continue the liability protections that are available through LLC ownership. Can you offer some guidance as to the significant issues that we should be aware of in this type of transaction?
Can My Marina Legally Charge Another Boater a Much Lower Slip Fee?
I keep my boat at a small marina on a lake in Arizona. It recently came to my attention that a fellow boat owner was paying $200 per month less than other tenants for the same size boat and the same type of slip, and he had been renting under this arrangement for more than five years. I asked the marina manager about it and was told simply that the rent for the boat in question was being increased. That’s great, but the tenant received a windfall compared to the rest of us, amounting to more than $13,000 over a five-year period. The marina has offered to reduce my rent by 10 percent for a one-year period, but that’s a fraction of the amount I was overcharged. Do I have any rights in a case like this, for being discriminated against?
Can a Race Protest Committee Legally Determine Fault in a Collision?
I own a racing sailboat, and I was involved in a collision with another competitor during a race. The protest committee determined that we were at fault, and the owner of the other boat is asking for my insurance company to cover the damage. I think the protest committee made the wrong call in finding that we were at fault. I know the racing rules provide for an appeals process within the racing community, but what are my legal rights if I want to pursue this through the legal system?
Supreme Court Ruling on Floating Homes vs. Boats Proves Perplexing
I recall a discussion in your column last year about a marina eviction case that made it all the way to the U.S. Supreme Court. Last month, I read an article about recent Supreme Court activity and I noticed a case on the list about a houseboat. Is this the case that you wrote about? I live aboard a houseboat in Northern California, and I am interested in whether this will affect my rights as a marina tenant.
If a Boater Signs Agreements with 2 Brokers, Which One is Enforceable?
I am a California-licensed yacht broker. A client listed his boat with me for sale under an “open” listing agreement that required him to give me 30 days written notice if he wanted to cancel the agreement. Several days ago, I received a phone call from another yacht broker who said that the client had just listed the boat with him under an “exclusive” listing agreement and he demanded that I cancel my listing immediately. I usually wouldn’t make a big deal about this, but I had just shown the boat to a prospective buyer who is ready to make a full price offer to purchase the boat. The new broker insists that I need to present the offer through him -- which would, of course, require me to split the commission with him. I don’t think I should be required to do that, since the boat owner failed to give me the required cancellation notice. What are my rights in a case like this?
Can I Hold a Buyer to His Verbal Agreement to Buy My Boat?
I advertised my boat for sale last year through an online service. I was contacted by someone who appeared to be a serious and qualified buyer. We exchanged a few emails and arranged for him to inspect the boat. After the inspection he made me a verbal offer to buy the boat for $30,000, subject to sea trial, and I accepted his offer. The surveyor found the boat to be in excellent condition. But a week or so after the surveyor completed his report, the buyer started to get cold feet -- and he informed me last week that he is backing out of the deal. I am now stuck with paying slip fees, insurance and maintenance until I can find a new buyer. This was a verbal agreement, but he failed to live up to his obligation to buy the boat -- and it seems to me that I should be able to sue him to recover my expenses until I find a new buyer. Alternatively, is there any way I can force him to buy the boat?
Can I Hold My Captain Liable for Negligent Engine Damage?
I purchased a 40-foot trawler yacht a few months ago and, since I am a novice boater, my insurance company required me to hire a captain to run the boat while I get a little more experience under my belt. The general manager of my marina suggested that I hire the marina dockmaster, who has a captain’s license and who apparently has a lot of experience with boats like mine. He took us out on a recent trip to Catalina and we, unfortunately, ran into a significant mechanical problem during the trip. The engine started to overheat after a couple of hours, and the captain continued to run the boat without checking anything. We picked up a mooring in Avalon, and he told us that the engine would cool down while we were ashore having lunch, and everything would be fine after that. While we were ashore, we assumed that he would look for the source of the problem -- but we were wrong. We returned to the boat and started our return voyage, but the engine seized halfway across and we had to be towed back to our dock. The engine is a total loss, and we are now looking at a huge estimate to repower the boat. It seems to us that this whole thing could have been avoided if the captain had fixed the overheating problem when it first arose. Can we hold the captain and the marina liable for the damage?
Is a Yacht Seller Required to Disclose Past Fire Damage to a Buyer?
I bought a 50-foot motoryacht six months ago and have had nothing but problems from Day 1. Most of the problems are related to the boat’s generator and electrical system. I was referred to a very good boat electrician, who finally figured out that the boat had suffered a serious fire at some point before it was sold to me, and that most of the problems I have experienced are related to the fire. I conducted a little research to see whether I might have a legal claim against the previous owner or my broker, and I ran across an article you wrote in 2011 concerning a new law that would require disclosure on a vessel’s title of any serious damage suffered in the vessel’s past. It seems to me that a fire would fall under that law, but there was no disclosure made to me on the title or anywhere else about the fire. What are my options in a case like this?
Must a Foreclosure Occur Before a Bank Sells a Repossessed Boat?
We are in the process of buying a boat that is a bank repo, and we would like to know a little about the process. We were advised that the boat is Coast Guard-documented, so we asked the broker to obtain a title history for us. It now appears that title is still in the name of the previous owner and that the bank never foreclosed on its mortgage. Is this a proper method for the sale of a repossessed boat? We had always understood that a foreclosure sale of a documented vessel must be conducted through a U.S. Marshals’ auction.
How Can I Get Clear Title to a Boat with a Debt in Its Distant Past?
I am in the process of purchasing a boat from my father. He bought the boat almost 30 years ago and it was DMV-registered (rather than being documented through the Coast Guard) throughout the time that he owned it. I am taking out a loan to buy the boat and the bank requires the boat to be Coast Guard-documented. When we contacted the Coast Guard, we were shocked to learn that the boat had been documented prior to the time that it was sold to my Dad, and that an unsatisfied mortgage to a private party lender was recorded on the Coast Guard title history. The Coast Guard has advised us that we are not able to document the boat until the mortgage is satisfied. How can this happen? To make matters worse, we learned after a considerable research that the prior owner and the lender are both deceased. What can we do?
What Rights Do Legal Liveaboards Have in Marina Evictions?
I moved onto my boat as a “legal” liveaboard a few months ago. The marina manager required me to sign an agreement and pay a security deposit, along with the first and last months’ rent. Three weeks after I signed the agreement, I found a notice taped to the boat advising that I was being evicted and that I had 30 days to remove my boat from the marina. I was unable to find a new slip, so I refused to leave -- and they responded by cutting off the power to my slip. They gave no reason for the eviction, but I am concerned that it may be a form of unfair discrimination against liveaboard boaters -- and when they cut the power, it became clear that they want to hassle me until I give up and leave. Is there anything I can do to protect my rights?
Can My Former Partner Claim a Maritime Lien Against the Boat?
I am in the middle of a complicated dispute with a former friend over a boat that we owned as “equal” partners for a few years. The partnership arrangement called for us to split the cost of the purchase and share equally in all expenses, but it wasn’t long before I was paying all of the overhead expenses myself. To make matters worse, he eventually moved aboard the boat without telling me. We eventually went our separate ways and he left me with the boat -- but after he left he recorded a Notice of Claim of Lien against the boat to recover his share of the purchase price. I’m sorry to burden you with my soap opera, but I wanted give you a little background before asking a couple of specific questions. So, first question: In one of your previous articles, you mentioned that a dispute over a boat sale transaction will never give rise to a maritime lien. Can you explain the reasoning behind this rule and perhaps point me to a statute or case law to support that conclusion? Second, I ran across a federal statute that provides for the expiration of a claim of lien after three years, but I have also heard that maritime liens are not subject to any statute of limitations. Can you clear up that confusion for me?
Can I Dispute My Damage Settlement from Another Boater’s Insurer?
Last month, my boat was struck by another boat while in the slip. The damage was substantial, and the repair estimate prepared by the boatyard came in at around $50,000. The adjuster for the other boat’s insurance company sent out an investigator, and they came back with a proposal to pay $11,000 for the repairs. They wanted to repair many of the items that the yard said needed to be replaced, and they listed depreciated values for some of the items, like the swim platform. This amounts to extremely small compensation that won’t come close to restoring the boat to its original condition. What are my rights against the insurance company? Am I entitled to compensation for my loss of use of the boat?
How Could a So-called ‘Samaritan’ Arrest an America’s Cup Boat?
I have been reading about an incident in September where a French America’s Cup catamaran broke loose from its mooring in San Francisco and was rescued by a guy in a Boston Whaler. He has filed a lawsuit claiming $200,000 in salvage fees, and he had the boat arrested to enforce his claim. Can you explain how he could be entitled to such a large reward? Also, the arrest procedure seems a little heavy-handed. Was that really necessary?
