Buying or selling a vessel isn’t as simple as transferring ownership paperwork. Maritime liens can complicate the process. Understanding how maritime liens affect ownership transfers is crucial for both buyers and sellers.
What are maritime liens?
Maritime liens are unique to maritime law. They are claims that attach to the vessel itself, not just the owner. This means if a ship owes money for repairs or services, the lien follows the vessel, not the individual who incurred the debt. The buyer may not know about the liens during a sale, which could cause problems for new owners.
Liens complicate the sale process
Maritime liens can delay or even derail a vessel sale if not resolved before the transaction. Sellers need to clear any outstanding liens to avoid legal disputes or cancellations, ensuring a smoother transfer of ownership. Failure to address these liens may also lower the vessel’s market value, making it harder to attract serious buyers.
Protecting yourself during a vessel transfer
Before buying a vessel, conduct a thorough search for maritime liens. This can be done through federal databases or by consulting with a maritime attorney who understands maritime laws. Including a warranty of title in the sale contract can protect both parties by guaranteeing that the vessel is free of any encumbrances.
Minimize risk in ownership transfers
Maritime liens introduce complexities that both buyers and sellers must address to avoid disruptions. Understanding how these liens work is key to preventing issues during the transfer of ownership. By handling liens early, the process becomes more efficient and less risky for all parties involved.
