In case you are not aware, USCG documentation is an official form of identification throughout the country. Using recorded boats as collateral for preferred mortgages has been a common practice in the maritime industry since the twentieth century.
USCG documentation opens up more possibilities for financing and enhances your ability to obtain a loan. Your business is more respected and given financial credibility, as demonstrated by registration under the U.S. government.
There are numerous benefits of USCG documentation, which are not available with state registration.
Registering your vessel under USCG jurisdiction will give you access to the most desirable foreclosed vessels and vessels owned by wealthy individuals that have decided to sell their yacht or boat for any number of reasons.
Benefits of USCG Documentation for Businesses
Financing
Most lenders who look for a strong collateral position and lien protection prefer to see a USCG documented vessel.
If the lender does not require USCG documentation, they may still provide better terms if you agree to document the boat with the Coast Guard.
According to federalregister.gov, documentation with the Coast Guard provides public notice that your vessel has been seized and attached by security interests.
The National Vessel Documentation Center (NVDC), which maintains records on behalf of the Coast Guard, is authorized to conduct a marine survey on your behalf when applying for documentation.
Cruising Foreign Waters
When cruising some of the world’s most remote and beautiful regions, it helps to travel in “greener” waters, minimizing unnecessary inconvenience and fueling costs due to the demand for Chilean or Singaporean fuel versus their American counterpart.
Cruising in foreign waters is a great way to experience new countries and cultures . . . and with the proper documentation, it’s also possible without undue stress or complications.
Title Assurance
Title assurance is designed to eliminate the unpaid borrower, lienholder, and preference claims against maritime liens.
Because the legal title of a documented vessel will be guaranteed, if the boat is stolen during transit but recovered afterward, the rightful owner can file ownership of the boat with the USCG and transfer ownership to them, rather than have to fight through all of the legal issues.
Documentation saves time, expense, and court time when transferring vessels for resale or refinances since a documented vessel has a proven and unquestioned history of transfer through its chain of title.
Marking the Vessel
The U.S. Coast Guard documentation process is a long and essential step when purchasing a boat.
The documentation number is required by law to be accessible upon request by the coast guard and any other law enforcement agency.
The majority of people who want to register their boats with the USCG choose one identification number which remains with the boat throughout its entire life.
Marking the hull’s interior can be done in various ways. Still, it is essential to choose a method that lasts so that you and anyone who owns your vessel in the future will also be able to locate the official number quickly.
What Are The Citizenship Requirements?
With citizenship requirements as they are, only a U.S. citizen has all the rights, obligations, and prerogatives of vessel ownership and operation.
For others, there is quite a bit that the United States government and so much more to be considered denies.
There are many reasons to seek a vessel Citizenship, legal or de facto. The Federal Government is increasingly looking to root out non-Americans (foreign persons) who own or operate a U.S. vessel for commercial ventures.
It is also becoming increasingly complex and burdensome to comply with all the citizenship/foreign ownership requirements and restrictions of operating a U.S.-flag vessel in the United States.
Can A Boat Be Both Titled And Documented?
This is a question that some boaters may not know the answer to. State agencies vary in their responses, but as a general rule, NO.
A state may not title a documented vessel. A boat may only be titled or documented in others, not both.
And in most states, an owner may not title a vessel if it is currently registered as a documented vessel with the U.S. Coast Guard.
Remember that the laws about documented vessels are complex and vary from state to state.
Before purchasing a boat, make sure you understand your state’s requirements and how they differ from federal registration requirements.
Furthermore, if the yacht is listed under USCG documentation, it can be sold to the public easier since many trust the United States Government more than they do a state or country.
Registration under the USCG establishes the recognition and can cause a vessel to hold value above 10% rather than a few percent from state registration. If you are looking for stability and growth in your business, investing in documentation should give you that foundation.
However, if you choose to register your vessel under state registration, you will be forever limited to only buying vessels in that state’s registry. Contact us today for more information on the ideal USCG documentation choice for your business!
