mvdservice

As a new Commercial Member to the Forum, I would like to help with questions related to Coast Guard Documentation and titling of a vessel. My goal is to use this thread as a learning tool and as a reference guide for people who have questions about the process. However, I ask that costs for services available by our company not be discussed in this thread. You may contact us directly.
I have been asked many times what the difference is between documentation and titling, and which is the better method to use when transferring ownership of a boat. I am here to help explain the differences and how they are used.

Coast Guard Documentation is a “Federal” means to transfer ownership, whereas titling is a “State” means to transfer ownership, which can vary by State as to the procedure. There are tax implications to be considered, which can greatly affect a person’s decision to choose one method over another. Additionally, if there is a loan on a boat, most lenders will require the boat to be Coast Guard documented because it is the most effective way to secure their lien on the boat. Coast Guard documented boats are assigned a one-time Official Number, which is typically displayed in the engine compartment and stays with the boat indefinitely. Titled boats generally have a State issued number that is affixed to the front bow of the boat.

Registration of a boat is separate from documentation or titling. Registration is required by most states, regardless if the boat is documented or titled. Registration is a state-imposed use fee where the boat is generally kept, and fee schedule renewals can vary by State. Registration of a boat includes a State decal that is placed on the bow of the boat. A Coast Guard documented boat can be registered in any State, whereas a titled boat needs to be registered in the title issuing State.

Ask away with any questions you may have.

bck

What is the procedure for transferring ownership of a documented boat when the proof of ownership is solely the coast guard documentation?

mvdservice

When you say solely "coast guard documentation", are you referring to a Coast Guard Certificate of Documentation? If so, transferring ownership can be accomplished by assigning to an individual on the backside of the Certificate. Along with that document, an application and fees would need to be submitted to the Coast Guard for completing the transfer. This is assuming there are no outstanding liens against the vessel.

bck

Yes, the current Coast Guard Certificate of Documentation. If there was a lien on the boat that had been paid off then the lien release from the bank would simply be submitted as well or is there more to it? Thanks for the info.

mvdservice

The Coast Guard requires a document called a Satisfaction of Mortgage in order to release a lien on a vessel. A "lien release" will not be accepted. Reason why, is that when a Preferred Ship Mortgage is filed with the Coast Guard, the mortgage is filed with a document ID and a batch number. The Satisfaction of Mortgage provides this information whereas a lien release does not.

noli

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is Florida a titled vessel state?





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Wildman_grafix

Yes they have titles here for the boats but not trailers. But as a person with a documented boat you will not have a title. Like the OP stated. I just register it here.

I will say we used to have a loan on our boat through my credit union. They did not understand the whole "preferred ship mortgage", and finally gave up asking me for a title. They never filed one with the coast guard, sort of funny.

Wildman_grafix

Is that true in Florida? i was told by the state here that if I keep the boat here and use it here more then 6 months I had to register it in FL?

bck

good to know, thank you.

mvdservice

Our experience with credit unions in general, along with smaller financial institutions that lend on boats, do not understand the process of a Ship Mortgage. They typically have a third party prepare this document for them. However, when it comes time to satisfy the lien against the boat, they are familiar with issuing a Lien Release rather than a Satisfaction of Mortgage. And, therefore, does not go through the proper process to release their lien with the Coast Guard.

As for the 6 month timeline to register a boat in Florida, that is probably true. Each state has their timeline requirements for registering a boat. We have to remember that just because a boat is Coast Guard documented, doesn't mean they don't have to be registered with a State.