LISTING A BOAT – IS IT LEGALLY READY TO GO ON THE MARKET?
When you decide to sell a boat, getting it ready for the market is not a simple matter of tossing out the clutter, giving the vessel a deep clean, and fixing any mechanical issues. There are also certain legal requirements that you will have to comply with. When overlooked or left unaddressed, issues like those listed below can render your boat illegal for sale in the United States and create problems for you, and even the buyer, later on.
Boat Registration Was Not Renewed
All motor-powered boats must be registered through the tax collector’s office in the county where you live or where the vessel will be kept. The registration, which requires annual renewal, should always remain onboard, ready for inspection, whenever you operate the boat. If you did not renew or failed to register the yacht in the first place, selling it can present regulatory issues.
No Proof of Ownership
When you sell a yacht, you must provide the buyer with proof of ownership, such as a bill of sale or USCG certificate of documentation. If you cannot provide this paperwork (e.g. it was lost or destroyed), the buyer must contact their local tax collector, provide your boat’s state registration number, and request the name and address of the titled owner. Some agencies will cooperate with these requests, but others may refuse to provide such information to the public. If this happens, the seller cannot legally take title until they receive a court order to issue a title in their name.
Customs Duty Was Not Paid
If your yacht is foreign-flagged, you cannot sell it in the U.S. unless it was entered through Customs and any applicable duty was paid. If it was built in the U.S., it may be entered duty-free as returned goods, but duty must be paid on the value of any foreign improvements. Similarly, if the vessel was brought into the country under a Temporary Importation Bond, duty payment is required before the boat is offered for sale. The only exception to this rule is if you plan to only take offers from non-U.S. residents.
Liens on the Vessel
If a contractor or other professional provides service or materials to your boat and gets a judgment against you for nonpayment, they may file a lien against the vessel. This prevents its title from being transferred to a new owner until the debt has been paid in full. If a lien has been filed against your boat, a buyer cannot take title to it until you pay the amount owed and the funds officially clear.
If you want to sell your yacht in the U.S. to U.S. residents but have concerns about titling or customs issues, you should contact a qualified title agent and/or custom’s broker to sort through these issues.