Buying and Selling a boat
In order to give some pointers as to what needs to be considered when you are buying or selling a trawler, the easiest way to do so is to look at it from the purposes of buying a boat and then highlight what is different about selling a boat.
The primary rule in any such transaction is to remember that it is ultimately about two parties coming to an agreement on a price for a boat based on its worth. The principal of ‘Buyer Beware’ which applies to property, applies here as well.
Having agreed a purchase price between the party’s, depending on the size of the boat and the amount of money involved, it may very well be worth a buyers time engaging a Marine Engineer to have a look over the boat and to make that there is nothing there which will cause great difficulties down the road.
When you are buying a boat there are a number of issues to be aware of.
- The licensing requirements.
- The change of the local registrar to date the ownership of the vessel.
- Marine mortgages.
- BIM grants.
- Registering your mortgage (where relevant).
The Sea Fishery Licensing Authority is now the authority which handles all licensing issues and is based in Clonakilty.
When purchasing a boat, it would be prudent to get an offer of a license in advance of completing the deal.
In applying for a license you must fill out the license application form and economic link questionnaire. You will of course in the course of those applications have to establish where the capacity for the new license will be coming from.
While doing this it is also imperative to ascertain precisely what the mortgage if any, is on the sea fishing vessel you intend to purchase. This can be done by contacting the local registrar and conducting a search on the Fishing Vessel. You must note that the registrar will not change the record as to who the owner of the sea fishing vessel is until such time as such the mortgage has been discharged.
The mortgage will only be dealt with when the actual bank that have the mortgage physically produce what is known as a vacate.
Subsequently, the Bill of Sale can be drawn up and upon exchanging the purchase price, both party’s will sign it. The purchaser will then apply to the registrar to have registration details altered and the vacated mortgage should be produced.
Where there is a BIM grant, it may very well be necessary to get the seller to produce a bond or indeed discharge and pay back any grant which is due to BIM.
Subsequently, once the registrar has updated the details and you have satisfied the licensing authorities conditions for an offer of a license, the license should issue.
Where you have assigned your own capacity to a boat purchase obviously that assignment note will have to be attended or in the alternative where you have bought the capacity with the boat, the vendor will have to also execute an assignment of capacity form. This should be done at the same time as the bill of sale as clearly, the physical boat is not much good with out the capacity to go with it.
In respect of selling a boat, the issues are very much as above save in relation to the mortgage, the mortgage will have to physically be redeemed from the purchase monies.
In relation to BIM that is obviously a matter as to whether you have received a grant in the first place and secondly whether or not the time between receiving the grant and selling the boat means that there is some claw back provision in the original grant.
The easiest way to ascertain this is to examine the contract entered into with BIM or in the alternative, contact BIM directly.
As a seller another point to be aware of is when you are dealing with a buyer who does not intend to use the sea fishing vessel in Irish or European waters and in fact intends to take the vessel to another country altogether.
Under the various legislation that governs this area it will be required to get the consent of the relevant Minister. The Minister can be applied to for this consent by writing to the Department of Transport. This Consent is ordinarily readily forthcoming but obviously it is a matter which should be attended to at the outset of the transaction and not at the end as quite clearly, if you are selling a boat to somebody who intend to take the boat off the register, they will need to close the certificate of registration and in order to do so that consent will be required. This could have huge implications for the buyer down the road who may find themselves unable to prove full ownership and be able to register their boat in this new jurisdiction that they may have taken it to.
Obviously, where someone is purchasing a boat and a maritime mortgage is involved a solicitor will be required but where selling a boat the only party’s that the Vendor must be aware of is BIM and any lending institution that has a mortgage on the vessel. Ultimately it is always advisable to take advice and it should not be forgotten that when you are selling a boat if for some lucky reason you are in a position to sell the boat for more than you purchased the boat, capital gains tax can apply.
contact Dermot at 0214901000 or firstname.lastname@example.org