In the United States, registration of properties can be done in several ways. And real properties are titled accordingly – cars at the DMV, and airplanes are registered with the FAA.
Among the real properties, registration of boats is unique. They can either be registered with the local state agency or federally with the U.S Coast Guard. In both cases, the owner will receive a title bundle that is similar to that of a car. The local agency is often same as the one that registers cars, but sometimes, it is an entirely different agency. A good example is the Department of Natural Resources.
Generally, boats from 25 feet can be documented with the Coast Guard as long as it owned by a U.S citizen, regardless of the weight. And within the Coast Guard, the National Vessel Documentation Center (NVDC) is the only agency that handles such vessel documentation.
Vessel documentation is simply referred to as “a national form of registration”. It provides evidence of nationality for international needs and admits vessels to certain limited trades. It also provides for unhindered commerce between the states
What then is the Vessel’s Abstract of Title?
An Abstract of Title is one of the most important documents that must be obtained in a vessel transaction.
When a vessel is first documented, the Coast Guard creates an electronic record called the “Abstract of Title”. All transactions such as the transfers of ownership, mortgages, and claims of lien are recorded therein. Abstracts may also contain notational data about a vessel’s documentation status.
Vessel Information
Abstracts usually contain data such as the previous and current vessel names. They don’t usually include the hailing ports, vessel’s dimensions and model year (except if they were provided by an applicant). Meanwhile, new abstracts may contain vessel hull identification numbers, unlike the old vessel abstracts.
The official Coast Guard documentation number will certainly be indicated as this is regarded as a vessel's primary identifier. However, Trade endorsements are not indicated on the Abstract of Title, they’re shown only on the Certificate of Documentation.
Owner Information
The current ownership is a must indicated data on the vessel’s Abstract of Title. Such data may consist of individual owners, a group of people, and entities under law such as corporations, or partnerships. The Abstract will also display the method of ownership and the manner in which parties involved wish to hold tenancy. In addition, it shows any ownership transfer which may have taken place since the last time the document was issued.
Chain of Ownership
If a vessel has been documented since it was built, the abstract will display a complete Chain of Transfer even to the current owner. This will definitely increase the value of the boat since documentation is a form of an authentication of ownership. However, it should be noted that not all Vessel Abstracts show a complete chain of ownership. This is because vessels can be documented from the subsequent owners.
Mortgages & Liens
The mortgages & liens is just a form used to transfer the rights of ownership. They are issued by recording a successful transaction on the abstract.
Recording Details
Like we highlighted, Abstract of Title usually consist of recording entries displaying ownership transfers, lien claims, vessel mortgages, and supplements. It also indicates if the filing was terminated due to recording deficiencies, or not.
Data Entry Methods
Abstracts are now recorded via an electronic database, unlike the obsolete hard copy entry.
Interpreting an Abstract
Interpreting various data entries requires a level of expertise. You may consider outsourcing the vessel abstracts to an expert if you’re not so familiar with such factors. The expert will help you with interpreting the abstract, as well as providing the summary.
Errors & Omissions
Errors, omissions, or inconsistencies are inevitable in a data entry activity. One must carefully observe and identify the source of such errors. Eventually, the Coast Guard will make corrections as well if warranted and issue a revised abstract.
Some Facts about Documented Vessels
Documentation makes it simple to travel the coast of the U.S. This is so because federal documented vessels are allowed in most states without registration in such state.
However, you may be required to register in a state you plan visiting if it is for a short duration. You’re to check the state you plan to keep your vessel as laws that govern each state differ from another.
Once you document the vessel, any new owner would have to update its details along with a fee. The Coast Guard requires that every vessel makes an annual documentation update – a notice will be sent 45 days prior to. Meanwhile, it is not compulsory for new owners to document the vessel as long as was documented before purchase.
Upon securing an abstract for your boat, we recommend that you do the following:
Properly check the abstract for accuracy before commencing the interpretation
Make a summary of the interpretation, properly displaying data of the current owner
and any outstanding liens or mortgages.
Ensure you eliminate errors and omissions you encounter
Secure the data properly.
FAQs
Q: What is a Documented Vessel?
A documented vessel is a boat that has an authentic document issued by the U.S Coast Guard. And documenting a boat provides:
-Evidence of nationality for foreign travel
-Permit to engage in open trade for inter states.
Q: What Vessels may be Documented?
For a vessel to be documented, it must measure about 5 tons and must be owned by a U.S citizen.
Q: Is it compulsory that I Document my Vessel?
You must document your vessel if it weighs 5 tons. Not just that, vessels used in fishing activities either in the U.S or in the Exclusive Economic Zone (EEZ) must be documented. Additionally, if your vessel is used in coastwise trade, it must be documented unless such vessel is exempted from documentation.
Q: What does Coastwise trade mean?
Coastwise trade simply means the transportation of goods or travelers between points in the U.S or the EEZ.
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