Documenting your Vessel

March 8, 2022
Documenting Your Vessel

Should you be documenting your vessel?

When going into the purchase of a vessel, lots of owners ask whether or not they should Document with the U.S. Coast Guard.  Sometimes it is simply a preference of the buyer.  On the other hand, it might be a requirement to proceed with the purchase.  Documentation is a form of registration through the US Coast Guard. This is a title for the vessel on the national (federal) level, as opposed to state titling. The Coast Guard’s National Vessel Documentation Center grants Certificates of Documentation to eligible vessels.

Reasons people decide to Document their vessels.

One, you plan to use your boat in international waters.

If you are operating in international waters, the owner should absolutely obtain USCG Documentation for their vessel.  Documentation offers a further protection from the United States to vessels as they move through international waters.  In other words, state titling verses USCG Documentation for a vessel is like comparing a driver’s license to the passport.

Two, you do not want to display State Registration numbers.

One of the most common reason Documentation is appealing to owners is that they do not need to display the state registration numbers on the vessel.   Indeed, the case when you document your vessel with the US Coast Guard.  This reason is purely for aesthetics, but many owners prefer the clean look of their vessel without the block letter displaying registration information.

Three, the bank requires it for financing.

Oftentimes, lenders will require Documentation when providing a loan for a boat.  Whereas, if an owner is financing a portion of their purchase of a vessel, the bank may require USCG Documentation.  Moreover, they’ll use this as a way to secure their lien at the federal level.

When can a vessel qualify and apply for Documentation?
To consider documenting your vessel, the vessel must measure at least five net tons.   This generally equates to vessels that are about 35 feet or longer.  Ultimately it depends on the tonnage of the vessel.  The owner must be a US Citizens in order to apply for Documentation.

An owner of a vessel eligible can apply for Documentation at any time they are the owner of the vessel.  Most individuals choose to Document the boat right after they purchase a vessel for convenience.  Subsequently, an owner can Document the vessel at any time during their ownership.

Can my boat be titled and documented?

After documenting your vessel with the US Coast Guard titling is invalidated and superseded by Coast Guard Documentation.  The registration depends on the requirements of the state where the owner primarily keeps the vessel.  Moreover, where the taxes are paid.  Some states require vessels to maintain registration along with the Documentation.  Others do not.  Above all, Documentation with the US Coast Guard DOES NOT exempt an owner from paying taxes to their respective state.

Why Title your Vessel?

Vessel Titling is a record-keeping system that provides ownership protection to vessel owners, going beyond the Vessel Registration system.  Firstly it also protects the interests of financial institutions or individuals that provide loans on vessels.  Secondly, lenders often require that a vessel be titled as a condition for granting a loan.  The title will document the owner of a vessel, their address, and the vessel description.  It also records the names and addresses of lienholders against the vessel.  As a result, all this information appears on the Title Certificate

Unlike vessel registration, which has a one-year or three-year term.  A Title Certificate remains in force for as long as a person owns a vessel.  When an owner desires to sell a titled vessel, the “Assignment of Title” section of the Title Certificate is filled out and notarized.  The Title Certificate is then given to the purchaser.  Finally, the purchaser must turn in the previous owner’s Title Certificate.

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To learn more about Documentation please visit:  Vessel Documentation | Maritime Documentation Center