To begin with a disclaimer, this post is not regarding the sourcing or implementation of Marine Finance for your own vessel, a process which we have in fact found really simple and actually invaluable in the living narrow dream. No this post is about something all the more sinister, how can you ever know whether your boat has outstanding finance against it?
Well it would seem that you can only ever prove that beyond reasonable doubt there is no finance outstanding on your vessel. Which to be honest terrified me. So to give you the background let’s start where this all began.
As part of the purchasing process our finance company received All Bills of Sale related to the vessel … easy peasy right? Wrong, problem is the current vendor could only provide a copy of this, which for our finance company raised concerns on whether he in fact has any finance against the boat.
No problem I thought, and hopped onto the almighty Google to find a database that would solve all my woes … no such luck, Google delivered a plethora of results of people who have been stung in this way. Sailing away on their beautiful Narrow Boat, only to have a bank rapping on the door two months later claiming the right over it. Well thank you Google for compounding my fear further!
Surely there must be an easy answer to this!? Well, rather unfortunately, it would seem not. Cue sleepless worry filled nights for me.
So how on earth can you get round this, well firstly we cannot commend enough the help of the finance company, who we will be writing about in a later post. They have really gone above and beyond with this, and highlighted things which would never of crossed our minds. They in the end requested a copy of the bank statements of the vendor to show the cash purchase, which was happily provided in a very short space of time, giving the finance company confidence in this.
On top of this, we also requested the documents from the Broker we are buying with, to show the Vendor had signed to say the vessel was free from any mortgages/hire purchase, duties, taxes, debts and liens of any kind. Sounds official right? Well really it is just a document with their signature on, and honestly we didn’t know how much this was really worth.
That’s when I had a bit of a brainwave! I know from the steps we have had to take for our finance company that most lenders who have a right over the boat will request that they are mentioned on the insurance policy. A quick call to the company we are looking to use for insurance and they were able to tell us (Rightly or wrongly considering data protection!) that the boat had been insured with them previously, with no mention of finance.
Beyond this we really can’t see that there is much more that we can do. We have looked into the boat as much as possible and hopefully have limited our risk as far as is possible. So you’ll be seeing us on the next series of Dragon’s Den pitching the much needed Boaters HPI database!
James & Kirsty