Boat purchase in Florida from owner, no broker.

[duetto]

Hello, I have found a sailboat in Florida I want to purchase that is For Sale By Owner. I am not living in or a resident of Florida. I have met the owner and seen the boat. Boat is USCG documented and checks out when I searched her documentation number. We have agreed upon a price. We agree a deposit is required to move forward and then a survey and sea trial which I will be present for. We understand the sale is contingent on the survey. I intend to stay in Florida on the boat in a live aboard friendly marina once the boat is purchased and Florida taxes will be paid.

The question is how to proceed with the paperwork so we are both protected?
Also, I am not familiar with Florida's boat title process and closing the transaction.

Thank you for your time and responses.

[Capt Clark]

Duetto,

The first document you need is a purchase and sales agreement. That will be your meeting of the minds. It should describe the vessel and all aspects about the transaction including dates. After the sale, you will need 2 documents from the owner. A signed and notarized Bill of Sale (CG1340) and the signed Certificate of Documentation(COD).

At this point, you can be titled in Florida or continue the federal documentation. The COD is used when you want to be federally documented and the vessel is titled with the US government. You would then register (not title) your boat with the state of Florida.

[Montanan]

FYI:

As to Florida Boat Titling and Registration & Sales Tax.

https://www.flhsmv.gov/motor-vehicle...registrations/

All motorized vessels operating on Florida’s public waterways must be titled and registered. Chapter 328, Florida Statutes, designates that FLHSMV is responsible for issuing vessel registrations and titles. Applications for titles and registrations must be filed at a county tax collector or license plate agent office. Owners have the option of registering their vessel for either one year or two years.

A purchaser of a new or used vessel has 30 days to title and register that vessel. During this 30 day period, the owner must have proof of the date of purchase aboard the vessel. Operating an unregistered vessel after 30 days is a second-degree misdemeanor.

Florida exempts boats from State titling if the boat is documented with the USCG. Determine if you wish to keep your vessel as a US documented vessel or a State titled vessel. Your choice.

If you keep your vessel documented with the USCG then it will be subject to State registration only.

If purchased via a Dealer they will collect the sale tax and remit it. If purchased via a private seller then sales/use tax will be due upon titling/registration.

[hlev00]

You can contact Marie at Admiralty Insurance. Don't be scared by "Insurance" in their name. Part of their business is Insurance. Another is boat documentation. They did my purchase for what I considered a reasonable fee and took care of all the paperwork. I had a broker, but I am sure they handle transactions without brokers as well. They are a small firm in Massachusetts but handle transactions all over the country. It is at least worth a quick call to them, explain the situation and see what they suggest.



Consider getting it surveyed, or at least make a conscious decision not to.


Harry

[Thumbs Up]

You can use a generic purchase agreement or even write your own. If you want to save on the taxes it might be in your interest to work it out so that half of the payment is "unofficial". That would require some trust. If you think that the person is untrustworthy, then you shouldn't buy his boat anyway. All that is required is that the seller gives you a bill of sale for less than the true purchase amount (tax benefit for both parties). Some will say that is fraudulent but I think that the amount of money they want you to pay in taxes is more fraudulent. If you are not worried about saving money then hire an agent or a broker and use their escrow service.

[dennismenace111]

Originally Posted by Thumbs Up

You can use a generic purchase agreement or even write your own. If you want to save on the taxes it might be in your interest to work it out so that half of the payment is "unofficial". That would require some trust. If you think that the person is untrustworthy, then you shouldn't buy his boat anyway. All that is required is that the seller gives you a bill of sale for less than the true purchase amount (tax benefit for both parties). Some will say that is fraudulent but I think that the amount of money they want you to pay in taxes is more fraudulent. If you are not worried about saving money then hire an agent or a broker and use their escrow service.

Making half the purchase UNOFFICIAL can get you in big trouble with the State of Florida. It used to be that you could register a boat for $100 and other valuable considerations.... That doesnt fly too well in Florida anymore. You will have to provide an affidavit describing those other valuable considerations.

Instead, look to separate any additional equipment from the boat...like... is there a dinghy and outboard involved? It will have to be titled and registered separately...so dont include them in the purchase price of the big boat. They are a completely separate transaction.

How old is the boat? If its more than 30 years old, it qualifies as an antique and the registration fee is quite low. I pay $7.00 to register my 33 year old sailboat, and $35 a year to register a 20 year old Boston Whaler.

[Cheechako]

Use a documentation service in Florida. They can escrow that deposit also. I did that when selling a US boat that was located in the Caribe and it all went smooth.
A couple things:
1) Do you have a purchase and sale agreement form?
2) Have a specified deadline/date every major step on your contract; "buyer will reject or accept the survey by : (X date)" etc.
3) Don't give a big deposit. Buying through Brokers I have given as little as a $1000 on a $250k boat. The seller just needs to know you are serious.
4) Always have the option of rejecting the boat after survey and trial. I've seen contracts written so you have to take the boat if the seller fixes the things on the survey, or pay the brokers commission anyway.

[RigBig]

You may be able to avoid Fl. registration by keeping the COD but I bet you a dime to the dollar that the Coast Guard will send the new buyer information to the county and you'll have to pay that counties sales and use tax if you stay in Fl.

Just my 1.5 cents worth.

[Ms J-37]

Originally Posted by dennismenace111

Making half the purchase UNOFFICIAL can get you in big trouble with the State of Florida. It used to be that you could register a boat for $100 and other valuable considerations.... That doesnt fly too well in Florida anymore. You will have to provide an affidavit describing those other valuable considerations.

Instead, look to separate any additional equipment from the boat...like... is there a dinghy and outboard involved? It will have to be titled and registered separately...so dont include them in the purchase price of the big boat. They are a completely separate transaction.

How old is the boat? If its more than 30 years old, it qualifies as an antique and the registration fee is quite low. I pay $7.00 to register my 33 year old sailboat, and $35 a year to register a 20 year old Boston Whaler.

Thanks for the info about "Antique" registration. I currently own a 1989 Boston Whaler.
But to the writer who talked about having an UNOFFICIAL purchase price for the purpose of registration ("Artificial") and about "trust" in the Buyer who wishes to do that-- trust is definitely the wrong word. I don't trust someone who cheats on their taxes, whatever the amount or whatever the purpose. How can you trust a regular person who will cheat by hundreds or thousands of dollars any more than you would trust a fat cat government person who cheats the rest of us by millions. I guess some Floridians consider it normal, at least for one particular Palm Beach resident that I can think of.
Signed, fairly new Florida resident (Cocoa Beach)

[jmschmidt]

You just said it "checks out when I searched her documentation number." Just searching the doc number will not tell you if there are any current and/or unsatisfied maritime liens on the boat.

You didn't mention that you pulled an "Abstract of Title" from the National Vessel Documentation Center, cost $25. The only liens that are valid and enforceable on a USCG documented vessel are those filed with this agency. Local civil beefs or debts do not attach to the title of the vessel unless filed with the agency and should have no effect on you if you acquired the vessel with a clean title.

[Dave22q]

It is very simple. You take your bill of sale, check for sales tax and signed registration transfer to the DMV. They will issue new registration on the spot and give you new date stickers. They will charge you for 1 or 2 years registration/ your choice. It takes maybe 10 minutes not including waiting on line. If you want Florida title, tell them and they will mail one in a few months. If you want to maintain USCG documentation, there will be additional paperwork for them.

WARNING- attempting to minimize sales tax with a phony sales price is probably not worth the risk. It will be taken as a serious matter and a lawyer might cost you many multiples of the "savings". I think it was Willie Sutton who said ' never steal small'.

[Montanan]

Originally Posted by jmschmidt

You just said it "checks out when I searched her documentation number." Just searching the doc number will not tell you if there are any current and/or unsatisfied maritime liens on the boat.

You didn't mention that you pulled an "Abstract of Title" from the National Vessel Documentation Center, cost $25. The only liens that are valid and enforceable on a USCG documented vessel are those filed with this agency. Local civil beefs or debts do not attach to the title of the vessel unless filed with the agency and should have no effect on you if you acquired the vessel with a clean title.

A Coast Guard Abstract of Title is a record of all of the documents submitted to the Coast Guard for a particular boat and accepted for recording by the Coast Guard. An Abstract is available for all Coast Guard documented vessels, either through a vessel documentation service or directly from the Coast Guard’s National Vessel Documentation Center (uscg.mil/hq/cg5/nvdc/).

Many people view an Abstract as a vessel title history, but this is not exactly correct. The distinction is due mostly to the fact that the recording of a lien with the Coast Guard is optional. As such, a valid lien may not be listed on the Abstract, and a claim that is listed on the Abstract may not be a valid lien. The instrument is therefore referred to as a Notice of Claim of Lien (rather than an actual “lien”), and the recording of the instrument has no legal effect other than to notify the world that someone claims to have a lien. We should note that this treatment is different for a mortgage, which in fact must be recorded to be valid.

With the notable exception of liens that arise from a personal injury claim against a vessel, there is no statute of limitations on a valid maritime lien. Instead, Federal law (Title 46 US Code, section 31343) provides for the expiration of a recorded Notice of Claim of Lien after three years. The expiration of the “notice” has no effect on the underlying lien itself (assuming the lien is valid). This is basically a minor administrative “housekeeping” statute, and the sole consequence of the statute is to relieve new lien claimants of the requirement for them to notify old lien claimants of their new lien claim, when the old claims are more than three years old.

Most maritime liens are not subject to any statute of limitations, they are instead subject to a legal principle known as “laches.” The laches principle basically says that if you sit on your rights for a long period of time, and as a consequence of that passage of time other people are somehow harmed by your failure to act, you may lose those rights. It’s a very vague principle but it does provide incentive for a lien claimant to move things along, and it could provide a defense for our reader if the mechanic is located and then claims that the lien is valid.

The Coast Guard will not record a lien satisfaction without a signed and notarized release from the lien claimant unless a court order instructs the Coast Guard to do so. So if there is an old lien, which may have been satisfied but not released the owner either before the sale, or the new owner who purchased the vessel with notice of a maritime or mortgage lien may need to file a lawsuit.

A lawsuit to clear a disputed or invalid claim against a boat or other property is known as a “quiet title” lawsuit. The suit may be filed in federal court if the boat is taken into custody by the U.S. Marshals, or it may be filed in state court against the individual who is asserting the contested claim. If the claimant cannot be located, the court may allow the lawsuit to be served by publication in a newspaper.

A quiet title lawsuit may be effective to dispose of an old or disputed claim, but it will be time consuming and it may be costly, and is not a speedy solution that will help one quickly sell the boat. One may need to consider reducing the sale price of the boat by the amount of the claim, but in any case one should seek the advice of a qualified maritime attorney for more specific information.

FYI. A State Titling document or a USCG documentation is a recordation of title, it is not proof of ownership. Proof of ownership is an adjudicatable matter that the courts can determine.

MARITIME LIENS FOLLOW THE VESSEL WHEN SOLD

“Unlike most land-based liens, a maritime lien is unrecorded and arises from the moment the supply or service, which is the basis of the lien, is provided to the vessel. The security is the vessel itself and the lien can be enforced by an action against the vessel in which the vessel is arrested. An action to arrest the vessel is usually available wherever the vessel can be found. This includes the United States as well as many foreign jurisdictions. Note also that the lien follows the vessel, even when it is sold, such that you may recover for your goods or services even if the party who hired you no longer owns the vessel.” Pacific Maritime Magazine, October 1996, Arresting a Ship: Actions In Rem

MARITIME LIEN IS NONCONSENSUAL AND UNRECORDED

A maritime lien is non-consensual and unrecorded; it also follows the vessel into the hands of even a good faith purchaser. Admiralty and Maritime Law 3rd Ed., Thomas J. Schoenbaum, Vol. 1, pg. 504; United States v. Z. P. Chandon, 889 F. 2d. 1990 (9th Cir. 1989)

MARITIME LIENS CAN BE SECRET AND OPERATE TO THE PREJUDICE OF CREDITORS AND PURCHASERS

“The maritime ‘privilege’ or lien is adopted from the civil law, and imports a tacit hypothecation of the subject of it. …It accompanies the property into the hands of a bona fide purchaser. It can be executed and divested only by a proceeding in rem. …(T)his privilege or lien, though adhering to the vessel, is a secret one; it may operate to the prejudice of general creditors and purchasers without notice." The Yankee Blade, 19 How. 82 (1857)

[JCCharles]

I recently bought a documented boat in South Carolina without using a broker. I used a Marine Documentation company, to handle all the paperwork. I will be moving it to my home in Florida. She contacted the owner and sent us all the paperwork needing to be signed. Since she’s not a broker and can’t handle the financial aspects, I had to make a wire transfer to his bank To close out the loan (that was our agreement), she had a Power Of Attorney For the bank from the owner so that all banking paperwork was sent to her And she could send the lien release to the Coast Guard. She Also paid all the Florida sales taxes and did the Florida Registration (even documented boats need a Florida registration, though the Documentation # becomes the registration number). All this for less then $400 plus Florida State taxes. Best money I’ve spent on the boat so far!!!

[Thumbs Up]

Originally Posted by Ms J-37

Thanks for the info about "Antique" registration. I currently own a 1989 Boston Whaler.
But to the writer who talked about having an UNOFFICIAL purchase price for the purpose of registration ("Artificial") and about "trust" in the Buyer who wishes to do that-- trust is definitely the wrong word. I don't trust someone who cheats on their taxes, whatever the amount or whatever the purpose. How can you trust a regular person who will cheat by hundreds or thousands of dollars any more than you would trust a fat cat government person who cheats the rest of us by millions. I guess some Floridians consider it normal, at least for one particular Palm Beach resident that I can think of.
Signed, fairly new Florida resident (Cocoa Beach)

You probably don't call loopholes cheating. It is easier to claim the moral high ground when you are financially flush. Why should Florida make you pay 6% if you could barely scrape up enough to buy the boat in the first place. You are better off spending that 6% on safety gear or insurance. I bought my boat in Florida and left the country without paying sales tax one day after the grace period and that would make me a tax cheat (by your criteria) and therefore would be unworthy of your trust. Why should such a morally and financially bankrupt person even be allowed to have a boat?

[Sailshabby]

Originally Posted by Thumbs Up

You probably don't call loopholes cheating. It is easier to claim the moral high ground when you are financially flush. Why should Florida make you pay 6% if you could barely scrape up enough to buy the boat in the first place. You are better off spending that 6% on safety gear or insurance. I bought my boat in Florida and left the country without paying sales tax one day after the grace period and that would make me a tax cheat (by your criteria) and therefore would be unworthy of your trust. Why should such a morally and financially bankrupt person even be allowed to have a boat?

“Moral high ground”? Priceless, mate! Run your story past the state authorities and see just how valid your opinion is. By your own admission, you bought a boat and didn’t pay the required tax you yourself said you owed. Orange your favorite color?