Quick CYA advice on buying used

[pfunk42]

I'm closing in on buying a used boat and looking for any quick cover my xxx type of advice. I'm buying in a state that does not require titles on either boat or trailer. Current plan for the transaction (other boat inspection type things already taken care of) would be

- Seller currently still has a loan that needs to be paid off, bank who he has the loan from is not local (across country)
- Seller would give me certificates of origin for boat/trailer
- We would complete a notarized bill of sale at a local bank/notary.
- My check to him to pay off loan. Bank doesn't have a title since none required but would then send confirmation of loan being paid off.

I already plan on triple checking certificates and bill of sale to make sure everything lines up (hull ids/serials/etc).

Given my current dealings with the seller and some other types of inquiries I don't really have any reason to think there's something fishy going on, but when making this sort of large purchase you're always wanting to make sure. The only thing I have concern about would be the last step.

If the certificates and bill of sale are handed off and notarized is there anything else I'd be missing that could cause me to be out of money without a boat to show for it?

If I did own the boat but he never paid the bank, is there anything that would cause me to own a boat plus carry responsibility for his loan (ie pay for it twice?).

Should I instead try to get his loan contact information and talk to his loan holder and sort it out with them? (ie, give him a check at the transaction that's made out to the bank instead of him?).

 

[Knightgang]

Re: Quick CYA advice on buying used

If it were me, knowing there was a lien on the boat, I would pay the bank directly. If you were financing the boat, that is what your lending agency would do, then they would write a check to the seller for any remaing balance due to him over the payoff amount.

As far as the title, Cert of Origin. Since the boat is in a No Title state for boats (as am I) the Cert of Origin along with a notorized BOS should be plenty to register/title the boat in your state. A memo on bank letterhead showing the loan has been paid off would not hurt either...

 

[BTMCB]

Re: Quick CYA advice on buying used

Good idea to take all measures to CYA. I will do the same..... I am NO expert, NO attorney and live in a state that requires title and registration for both boat and trailer. Having said that, if it were me, I would surely ask to see his loan document / purchase agreement. If it was a "secured" loan (boat is the security), bank has to be holding some "paper" / "lien" over his head that would need to be "released' / "signed off". I would also consider contacting his lender together, get pay off, go to your bank, wire the money (exact payoff) to his lender, pay him the balance (after bank acknowledges loan is paid) - all after the Bill of Sale / Certificates of Ownership, etc. have been signed and notarized and YOU have the boat / trailer in YOUR possesion and him clearly in your site! Also, might consult an attorney / buddy's attorney before doing anything but that's just me. Might also want to ask to see his insurance policy. Can't see a bank loaning money without demanding he carry insurance naming them as loss payee. Good luck. Hope it all works out for you!