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In the Northwest, most boat clos-
ings are facilitated through a third-party
closer. An agent who, independent from
the broker or lender, completes the necessary
research; prepares the appropriate
releases, transfer documents and new titling
forms; and coordinates the collection
and disbursement of funds. This is, typically,
a maritime title company.
Upon first contact with the title
company, you will be asked a series of questions. Most will be
somewhat familiar and can be answered with little effort, but
some may seem strange and, possibly, a little perplexing.
The title company will begin by getting the specifics of
the transaction; broker, type of boat, lender, date of closing, etc.
None of which will cause much difficulty.
The big question comes next, do you plan on documenting
the vessel with the Coast Guard or titling it with the State?
The exchange usually goes something like this:
“Eh, excuse me? Do I plan on doing what with whom?”
“Well,” explains the title agent, “there are different meth-
ods to title a vessel. While many states offer a title similar to
what is issued for an automobile, if a vessel meets certain requirements,
it is eligible for a Certificate of Documentation issued
by the U.S. Coast Guard. “
By Molly Holden
Managing Member of Pacific Maritime Title, LLC.
COAST GUARD
DOCUMENTATION 101
Itʼs your first big boat purchase. All of the essentials are in place: the
price is agreed upon; the survey is complete; the financing is lined up. You
are referred by either your broker or lender to a maritime title company to
complete the transaction. What does this mean? What happens now?
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“Wow. That sounds impressive,
but, uh, why would I need it?,” you
ask.
“People choose documentation
for many different reasons: your
lender may require it for your loan; you
may be planning on a commercial usage
that requires documentation; you
may be planning on going into foreign
ports or international waters and want
the protection of the Document; or, maybe you just donʼt want
to put those little state registration numbers on your nice, big,
new boat.”
“Let me explain a little further. A vessel must meet certain
requirements to be allowed to be documented with the
Coast Guard. The requirements are dependent upon the desired
usage of the vessel. All documented vessels must be at
least five net tons in volume (approximately 26ʼ or larger in
length), and all owners must be United States citizens. These
are the only requirements for a vessel that will be used for
recreational purposes.”
“Vessels purchased for commercial usages (i.e. carrying
freight or passengers, fishing etc.) have additional requirements.
For example, acceptable evidence must be submitted
to the Coast Guard showing that the vessel and its component
parts were manufactured and built in the United States.