Using a Broker to Buy or Sell a Boat - Everything You Should Know
Role of the Broker
The broker will help in selling the ship by signing the “Buying Contract” signed by the seller and buyer. The broker brings the buyer and seller together. He does not take possession of the ship nor does he becomes its owner. A broker is not personally liable for the contracts concluded.
Normally the broker is informed about a ship to be sold and he publishes the information about it in his listings. The person willing to buy it contacts the broker and it is arranged to have the potential buyer make visual inspection of the ship. The broker will then help the buyer to proceed in signing a buying contract stating the date of purchase and the fund transfer procedure.
As soon as the buying contract is signed by the buyer, seller, and broker, the person is eligible to carry out a thorough inspection on the ship. If he finds himself unsatisfied with the hull condition, structures should be rectified if possible to keep the buying contract active. If the seller refuses to rectify the problems, the buyer has full rights to cancel the contract. If the seller agrees to rectify the defects mentioned by the buyer and the buyer still refuses to buy the ship, he has to pay compensation to the seller as declared in the contract and compensation for the broker for delaying the sale of the ship.
During the transfer, any problems that arise will be handled by the brokers and any delay in fund transfer will also be considered. Not only they help in arranging the buying contract, but they also look after the documentation work for the registry alteration, change of ship’s name, registry anew, transfer of registry, and transfer of ship.
Changing the Ship’s Name
The principal act lays down that a ship shall not be described by any name other than its registered name which cannot be changed without the consent of the department. To change the name of a ship requires an application in writing and such notice published as the department may require. Notice of a proposed change is usually published in Lloyd’s List and other shipping papers and is displayed in Mercantile Marine Offices and Custom Houses. The notice will include a request that any objection to the proposed name should be notified to the Registrar-General of shipping and seaman at Cardiff.
When permission is given, the name must be changed forthwith on bow and stern of the ship and in the ship certificate of registry. A ship have once been registered may not be re-registered under any name other than her original registered name without previous written permission from the department.
The Registry and Transfer Process
If the particulars of the ship’s tonnage and description which appear in the register are altered, the owner must apply for registration of alteration, or for renewal of registry. If the ownership of a ship is changed, the new owner may have the ship registered anew, but this is not essential. However, renewal of registry would be necessary if ship reappeared which has been presumed lost and had her original registry closed in consequence.
Transfer of Registry
If an owner wishes to transfer the registry of a ship from one port of registry to another, he must first obtain the approval of the department. Subject to such approval, registry may be transferred from one port in U.K to another port mentioned on the application to the registrar of the existing port of registry made by a declaration in writing of all the persons appearing in the register to be interested as owner or mortgagees (without affecting the rights of those persons).
The ship’s certificate of registry must be delivered up to the registrar either of the existing or intended port of registry. On receipt of the documents mentioned, the registrar of the intended port of registry is required to enter in the registrar all particulars and names transmitted to him and grant a fresh certificate of registry. The ship then considered registered at the new port and the name of that port must be substituted for the former name on the stern and bow of the ship.
Transfer of Ships
When the ownership of ship changes as a result of some voluntary act such as sale or deed of gift, the ownership is said to be “transferred.” Transfers of ship which are required to be registered can only be made by bill of sale. The function of this recording document is similar to the function of a title deed of real property, and it provides the evidence of entitlement on which a registrar can act. The bill of sale must be shown the names of the parties, the consideration paid together with a receipt, and description of the identity of the ship conforming to the information contained in the certificate of registry and the surveyor’s certificate. It must also show that the vendor covenants with vendee that he has power of transfer the ship and its equipment, and that the ship is free from encumbrances other than those, if any, which appear by the registry of the ship.
Summary
The selling and buying of ships can be a complicated affair with many steps involved. Although some buyers and sellers may be comfortable and competent with the extended process and legal requirements, most buyers and sellers will benefit from accepting the services of a professional broker.
