Ask a Maritime Attorney
I am buying a yacht in California from a private party without a broker, and the seller’s attorney drafted a two-page purchase agreement. I am a little concerned about whether the agreement adequately addresses the issues that are relevant in this kind of transaction since the agreements that are used by yacht brokers are typically six or seven pages long. I am sure that a lot of the provisions in the longer contracts are designed to protect the broker, but what are some of the issues that I should be looking for in a shorter contract? Also, the seller has asked that I pay a deposit, but he wants to hold the deposit himself rather than depositing the funds in an escrow account. That idea makes me a little nervous since the deposit would need to be returned to me if I reject the boat after it is surveyed. Is there some way that I can protect those funds?
I sold my boat almost a year ago. I signed and notarized a bill of sale on the official Coast Guard form and exchanged the bill of sale for a cashier’s check when we closed the deal. It came to my attention when I received the annual documentation renewal form from the Coast Guard that the buyer never recorded the bill of sale, and the boat is still in my name. I tried to contact him, but I have been unable to reach him. What kind of liability am I facing by allowing someone to operate a boat that is still registered in my name? How can I get the bill of sale recorded?
I am researching the services offered by commercial assistance towing companies (such as SeaTow or Vessel Assist), and I am a little confused about the interaction between these services and the U.S. Coast Guard. Under what circumstances will the Coast Guard respond to a call rather than deferring to a commercial service? And, does the U.S. Coast Guard ever charge a fee for responding to a distress call?
My boat was out of the water last week for some bottom work and an insurance survey. My marine surveyor told me something about marine insurance coverage that did not make any sense. We were talking about insurance claims that arise from equipment failures. He said that a boat owner who knows about a problem and ignores it may have more success with the claim than a boat owner who has no information at all about the problem. This seems counter intuitive.
I am buying a boat through a yacht broker and the sea trial and survey will be completed next week. In the interim I asked my broker and the documentation company to start the title search, but I quickly learned that the title search process for a yacht is a lot different than it is for a house. For example, the documentation service has ordered an Abstract of Title from the Coast Guard, but they advised that they cannot confirm that the boat has a clear title even after reviewing the Abstract. Can you shed some light on the maritime title search process and the role of a vessel documentation service?
My boat is listed for sale through a California broker and I recently accepted an offer from a prospective buyer. The offer is contingent on a sea trial and survey, which will require the boat to be hauled out of the water at a local shipyard. Unfortunately my broker warned me that the fine print on the yard’s contract will probably include language which absolves them from liability for damage which may be caused by their negligence. Is this enforceable?
I am in the process of buying a 40 foot motor yacht that was a bank repo. The broker disclosed that the previous owner was a couple years behind on his property tax payments, and I am concerned that the county may assert a lien against the boat or take some kind of action against the boat after I take title. In a normal purchase I could probably get the seller to pay the back taxes but the bank won’t negotiate. What are my legal rights in a case like this?
We are interested in starting a charter business with the purchase of a 50 foot sportfishing yacht that is currently located and registered in Mexico. I have done some research and I understand that a boat must be built and registered in the United States to legally carry passengers for hire. The boat we are buying was built in the U.S., but it was taken to Mexico when it was first sold and has always been Mexican flagged. Assuming we transfer the boat to U.S. documentation after we take delivery, would there be any legal restrictions against operating the boat in a charter business?
I work as a chef aboard large motor yachts, mostly in the Caribbean. I have a job lined up for three months aboard an American flagged yacht, but I am a little concerned about the owner’s track record when it comes to paying crewmembers on time and withholding tips. Can I do anything to prevent this from happening? What can I do if he fails to pay me when I leave the boat?
Q: I made an offer to buy a boat several months ago but we had to back out of the deal before closing. My mortgage broker conducted a title search and determined that the boat’s Hull Identification Number was a duplicate of another boat and the boat I was looking at was stolen. I obviously withdrew my offer but I am out several thousand dollars in expenses for surveys, travel and time off to attend the surveys. The purchase agreement was a standard form contract from the California Yacht Brokers Association and it includes a provision for the buyer to recover reasonable expenses if the seller defaults. We believe the failure to provide clear title to us is a default and have demanded that the seller pay our expenses but he refuses to respond. Before we pursue this any further can you confirm for us that this was a default under the contract?
Q. My boat sank a couple of months ago due to the negligence of boat mechanic and I’m looking for advice on how to recover at least a part of my loss from him. He was working in my engine room and he apparently broke a through-hull fitting for an old knotmeter. The fitting did not have a valve, and when it broke the old sending unit was dislodged, allowing water to enter the engine room. The boat sank very slowly and nobody noticed that it was low in the water until it was too late. The marine surveyor who investigated the loss found the broken fitting but he did not really say anything as to how or why it happened, and he did not place any blame. I spent a little over $30,000 to repair the boat, and I am now considering a lawsuit against the mechanic to recover my loss. Since this is a maritime case, would the lawsuit need to be filed in federal court? What is the federal statute of limitations for a claim such as this? What are the other significant issues that I should look out for?
I have read a couple of your articles in recent issues of The Log about the private repossession and sale of boats, where the procedure is completed without judicial oversight. I have a preferred ship mortgage recorded against a documented boat and I am preparing to repossess the boat, but I want to be sure that I don’t overlook anything. Can you provide a general overview of the procedure?
I bought a 41 foot power boat two years ago with the help of a friend who loaned me the money for 80 percent of the purchase price. He funded the transaction by taking out a home equity loan, and our arrangement called for me to make the payments on his loan. Unfortunately he never showed me his loan paperwork and I recently discovered that the amount of his home equity loan was substantially more than the amount that he gave to me for the boat purchase. This entire deal was done on a handshake and at this point I have no idea how much I owe him. He refused to give me a detailed accounting of my payments or of his home equity loan, so I stopped making my payments to him. He responded by putting a lien on my boat through the Coast Guard. What are my legal rights at this point?
I own a deep draft racing sailboat and several weeks ago the boat ran aground at high speed in shallow water near a harbor entrance. The force of the impact caused the rig to fail and the mast fell overboard in two ugly pieces. We had to cut it loose to be towed to safety and the rig and part of the destroyed mainsail remain at the site of the grounding. Yesterday I was contacted by the harbor patrol and advised that I had to retrieve the rig and dispose of it immediately. What are my legal obligations under a circumstance like this? I should note that my insurance company concluded that the rig failed because several key components showed signs of extensive corrosion so they denied my insurance claim.