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8 minutes read
27 Jan, 2021
Boat Buying , Boating
By Adam CoxThe Paperwork
Our ongoing series of blogs addressing the question: "Which boat do I buy?" has now reached Part 4. Buying your new boat is a fun exercise which has many parts to it, but it has not been purchased and cannot be delivered to you until this last part of the process has been completed. As the saying goes: “It’s not over until the fat lady sings.” In this case the fat lady is the pile of paperwork.
There are some interesting claims to the origins of this saying. The most popular is that this refers to the pleasantly plump lady opera singer who sings the last aria of the performance. Apparently Al Capone enjoyed opera and made this comment to two of his “goons” when they prematurely got up to leave a show that he attended. Another claim is that it refers to the large lady, Kate Smith, who sang the national anthem at the end of American football games in the fifties. And lastly, but one that we will certainly not give any credence to in the context of boat buying, is that the saying is actually a mis-quote and should be: “it’s not over until the fat lady sinks” this being a reference to the black number 8 ball in snooker, called the fat lady, the last ball to be sunk.
This is most often the part of the buying process that is left to the last minute, or avoided, because it is dead boring, can be irritating, and takes time. Unfortunately though, this simply has to be done; parts of the paperwork process are legally required to be completed, and those others that could possibly be left out should still be given due consideration and diligence.
This blog aims to provide you with an overall view of the bits of paper that could and should be completed and secured by you when buying your boat. These documents are all important but to ensure that you do get off to a good start, and since caveat emptor applies, take note of this starting point.
Which Boat Do I Buy: Getting the Paperwork Done
Your first step, especially in the case of a used boat, is to ensure the seller actually owns the boat and that there are no outstanding encumbrances such as unpaid marine mortgages, boatyard charges or mooring fees. Ensure that the vendor is knowledgeable about the boat and has sufficient documentation to support his claim of ownership.
Boat Title Documentation – it is important to see these documents that transfer the legal title in a boat, the Bills of Sale. These original Bills of Sale, with original signatures, should ideally show a complete audit trail back to the original builder’s certificate. It is possible that for older boats this complete set of documents might be missing. But the owner should still be able to provide his own bill of sale for purchasing the boat, as well as other receipts showing his usage of the boat over time, such as moorings, boatyards, and maintenance. If a company, other than a Yacht Dealer, owns the boat please take extra care to ensure those signing the Contract and Bill of Sale are legally entitled to sell the boat. Supporting documents are required, to confirm the sale.
Boat Registration Certificates – it is actually not compulsory to register leisure craft in the UK, nevertheless a fair proportion of boats are registered. This is because registration is needed should you wish to take your boat abroad, either by water or by trailer on a ferry, or for marine finance purposes. There are four different parts to the Central Register of British Ships as described in detail here: https://www.gov.uk/register-a-boat/the-uk-ship-register and a fifth option that is advisable to use, as described briefly below:
- Part 1 - commercial or pleasure boats. Private yachts and power boats bought with a marine mortgage are required to be registered here by most finance companies.
- Part 2 - fishing boats.
- Part 3 - small boats. It is advisable but not mandatory to register a pleasure boat up to 24 metres long with the Small Ships Register. This register, however, does not prove ownership.
- Part 4 - charter boats.
- Safety Identification Scheme - By registering your boat with the UK coastguard your details will be available to Maritime Rescue Co-ordination Centres throughout the UK.
Here's the link to the British Ship Register's website: https://www.ukshipregister.co.uk/
The main differences between part 1 and part 3 of the registers are the eligibility requirements and the proof needed to register. Part I of the Register is more of a title register and proof of ownership, which can also record details of any mortgages on the boat, whereas the SSR is more of a passport for your boat to enable you to go overseas.
Builder’s Certificate – this confirms the name and address of the first owner, the selling dealer, the HIN (Hull Identification Number), year built and often a yard number so that later in the boat’s life, its age and origin can be proven. If you Part 1 register a boat, the original Builder’s Certificate is normally kept by the registrar.
Recreational Craft Directive – (RCD) these regulations apply to all craft between 2.5 and 24 metres in hull length, regardless of the means of propulsion and came into effect from 1996. This means that in the European Economic Area (EEA) boat owners have a legal obligation to ensure that their boat meets the relevant requirements and have a CE marking.
These requirements ensure sustainable development from an economic, social and environmental perspective, as well as safety, and refer to the design and construction of the craft with specific limits for exhaust and noise emissions as well as for some components.
RCD requires that manufacturers keep a technical file of all relevant data and officially declare the conformity of their products. A CE marking must be affixed to the product and users must be provided with detailed information about safety and maintenance.
Note: CE certificates will remain valid in the UK until the end of 2021. From 1 January 2022, CE marked goods shall obtain a UKCA (United Kingdom Conformity Assessment) mark in order to be placed on the market in the UK.
If you wish to read more in-depth detail about this directive please go here: https://www.imci.org/22
VAT Status – there are certain exceptions but in the main privately owned boats used by EU and UK residents within the EU and UK are required to be VAT paid. In other EU countries you may be asked to provide evidence that VAT has been paid. Ensure the boat is accompanied by a VAT invoice, showing the VAT paid and when. Ideally the invoice should be to a private individual. If the VAT Invoice is to a business, then that business must then invoice the boat out of the business, either zero rating the VAT or charging it out at the applicable rate.
Since Brexit there will have been changes and as you can imagine many details still need to be finalised. That which is available can be found HERE. For example: The location of your boat at 11pm UTC on 31st December 2020 will determine its future VAT and customs status. It is recommended that you obtain and retain documentation which can be used to demonstrate the vessel's location at the time of the end of the transition period.
Boat Cruising Licence – to sail your boat on canals and rivers you need this cruising licence. Licenses and prices can be obtained from the relevant navigation authority, and a Gold Licence allows you access to all Canal & River Trust and Waterway Agency waterways.
Boat Safety Scheme Certificate – in order to obtain the above Boat Cruising Licence you will need to first obtain a Boat Safety Scheme Certificate. This functions in a similar way to obtaining an MOT for your car, and lasts for four years. Its purpose is to help minimise the risk of boat fires, explosions, or pollution harming visitors to the inland waterways, the waterways' workforce and any other users.
Boat Insurance - There is not actually a legal requirement in the UK for boats to be insured. However, to obtain a cruising license navigation authorities for the waterways, and marina and harbour operators, usually insist upon at least third-party insurance. Without this you’ll be unable to use your boat on the waterways and be unable to obtain a mooring agreement for it.
Contract – Although not at the top of this list of documents it is nevertheless crucial that a written contract is drawn up when buying your boat, laying out all the relevant terms and conditions. There are a few templates that can be used provided by Royal Yachting Association (RYA), or one from the Association of Brokers and Yacht Agents (ABYA), which also sets out the duties of the broker acting on behalf of both the buyer and seller.
Which Boat Do I Buy: Boat Broker
Our list of documents is not yet complete, but this is an ideal place to insert a reminder and suggestion. By now you may well be feeling swamped and overwhelmed by this list of documentation requirements. This will all be far easier for you if you were to use the services of a Boat Broker. Here at Burton Waters our brokers are familiar with all of the paperwork needed to check that the boat has a clean and unencumbered title and is a safe purchase. We are also members of the UK’s Boat Retailers and Brokers Association (BRBA) and Association of Brokers and Yacht Agents (ABYA), and as such have a code of practice to which we must adhere. Furthermore, another essential stipulation that you should require of your boat broker, as per RYA guidelines, and which we certainly abide by is that we hold all client monies in a bona fide Client Trust Account.
Competence and Qualifications - If you wish to use your boat outside UK waters you are in many cases required by law to have a minimum level of competence: the International Certificate for Operators of Pleasure Craft (ICC) being the most common requirement throughout most of Europe, for example. Insurance companies may also sometimes require a level of experience for a boat owner, as well as to possibly qualify for a discount on premiums should you hold, for example, a full boating qualification from the Royal Yachting Association (RYA), including both the Theory and Practical aspects.
Which Boat Do I Buy: Short Summary
In closing, here is a short summary provided by the RYA (https://www.rya.org.uk):
Ideally you will want to see the following original documentation:
- A Certificate of Registry (if the boat is registered);
- Bills of Sale tracing ownership from the very first owner of the vessel to the current Vendor;
- Builder’s certificate;
- Builder’s invoices;
- Original / copy VAT invoice;
- Evidence of date of arrival in the European Community;
- Confirmation of RCD compliance in the form of an owner’s manual (which should include a written Declaration of Conformity), (the manufacturer should have a technical file); or details of RCD exemption;
- An express written declaration from the Vendor that the boat is free of all debts, claims and charges of any kind at all;
- Any other documents in the Vendor’s possession relating to his acquisition of the boat, which may include:
- Equipment manuals;
- Service records;
- Receipts for repair work;
- Racing Certificates;
- Mooring charges;
- Harbour dues.
