Question: A customer won’t pay for work I did on his documented boat. Do I have a lien, and is it worth anything?
Answer: This is the question I am asked more than any other, and it has two answers. The short one is yes — you have a lien, you got it the moment you finished the work, and you did not have to file anything to get it. The longer one is that whether the lien is worth anything turns on a single date, and you can find out that date for twenty-five dollars.
Start with the lien. Federal law gives a maritime lien against a vessel to anyone who furnishes “necessaries” to it on the order of the owner or someone the owner authorized. Repairs are necessaries. So are supplies, towage, and the use of a dry dock or marine railway. The lien attaches to the boat itself rather than to the person who owes you money, and it arises automatically when the work is done. There is no form to file, no office to visit, no fee to pay and no deadline to beat.
That surprises people, because every other lien most of us have dealt with works the opposite way. A contractor who remodels a kitchen has to record a claim and then sue within ninety days or lose it. A boat is not a kitchen. The lien is already yours.
Now the part that decides whether it is worth having.
Most boats worth repairing have a loan on them, and if the boat is documented with the Coast Guard, that loan has probably been recorded as a preferred ship mortgage. When the owner stops paying everyone — you and the bank — the question becomes: “Who stands where in line?”
Here is the rule, and it is not the one most people assume. Your repair lien outranks the bank’s mortgage only if your lien arose before the mortgage was filed.
In other words, your repair lien is most likely subordinate to the mortgage. Federal law defines a “preferred maritime lien” to include a lien arising before a preferred mortgage was filed. A lien that arose after the mortgage was filed does not make that cut. It sits behind the bank, and on most boats there is nothing left behind the bank.
So two yards can do the identical job, on the identical boat, for the identical money, and one of them is first in line while the other is last. The only thing separating them is whether the bank got there first.
You can find out before you pick up a wrench. The Coast Guard’s National Vessel Documentation Center will sell you an Abstract of Title for any documented vessel — form CG-1332, twenty-five dollars. It lists the instruments recorded against that boat and the date each one was recorded. If there is a preferred mortgage on her from 2019 and you are quoting a repower today, you now know you are behind the bank, and you can decide what to do about it: take a deposit, bill in progress payments, or price the risk into the job. If the abstract comes back clean, you are in an entirely different position, and you should know that too.
Twenty-five dollars, and the answer arrives before you have a dollar of your own money in the boat.
Two cautions.
The first is that an abstract shows you what has been recorded. It does not show unrecorded maritime liens — and since maritime liens require no recording, most of them are invisible. The crew that went unpaid last season, the yard down the coast still waiting on an invoice, the fuel dock: none of that has to appear anywhere. The abstract tells you where you stand against the bank. It does not tell you where you stand against everyone.
The second is that all of this is the analysis for a Coast Guard documented vessel — and you can tell one from the dock. A documented boat carries no registration numbers on her bow at all. Her name and hailing port are lettered on the transom, and her official number is cut or plated into a structural member inside the hull, often a beam or bulkhead below, in figures at least three inches high and fixed so that removing them would do visible damage. If instead there are numbers painted on both bows beginning with the letters CF, she is registered with the California DMV, and a different body of law applies — including California’s Boater’s Lien Law, which documented vessels are expressly excluded from, and which carries deadlines of its own. That is a subject for another column, and it is worth one.
If you are owed money on a boat, the date on that abstract is the first fact to establish, and an experienced maritime attorney should be consulted before you rely on a lien or take any step to enforce one.
Christopher M. Brainard is a California attorney practicing maritime, business and injury law in Los Angeles, and is senior counsel to the California Yacht Brokers Association. He is a licensed yacht broker and sails out of Marina del Rey. Questions for this column may be sent to the editor at The Log, or to Mr. Brainard at [email protected] or LawBrainard.com.
The information in this column is general in nature, is not legal advice, and does not create an attorney-client relationship. Readers should not act on it without consulting an attorney.
