Marine mortgages: Is your paperwork up to date?

Sales of boats are being delayed in the UK because cleared mortgages continue to show up as outstanding on the UK Ship Register, according to the Association of Brokers & Yacht Agents

A row of boats in a boat yard which are available to buy with marine mortgages
If an outstanding mortgage is still registered on the UK Ship Register, a yacht can only be sold if a declaration is completed on the MCA Bill of Sale to confirm the new owner is aware of the outstanding mortgage

Boat owners who took out marine mortgages and paid them off are being advised to check their paperwork is up to date with the UK Ship Register or risk delays when selling their boat.

The Association of Brokers & Yacht Agents (ABYA) has dealt with a number of cases where cleared mortgages continue to show up as outstanding on Part 1 of the register, preventing the sale from going ahead.

ABYA chairman, Peter Norris said the closure of marine mortgage departments by high street banks has meant some mortgages are still listed as outstanding when they have been paid off, and tracking down the paperwork is difficult.

Norris would like to see measures in place so there are checks to make sure paperwork is up to date before marine mortgage departments are closed.

The Financial Conduct Authority said any bank closing their marine lending business needed to make sure staff were able to deal with the administrative aspects of any loans, so that consumers were ‘not disadvantaged’, including ‘de-registering any charges with the UK Ship Register.’

The UK Ship Register falls under the remit of the Maritime and Coastguard Agency (MCA).

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A spokesperson said for a fee, a Transcript of Registry can be purchased to confirm if a mortgage is registered against a boat. All personal information where GDPR considerations comes into play will be redacted.

A vessel can be sold or transferred whilst a mortgage is still registered, but a declaration needs to be completed on the MCA Bill of Sale to confirm the new owner is aware of the mortgage.

To remove a mortgage, the MCA needs a copy or the original mortgage deed with discharge details from the mortgagee.

The lender then needs to instruct the removal of the mortgage from the register, and send in the original mortgage deed.

Once this has been received, the MCA aim to remove the mortgage from the register within 48 hours.

The MCA said it was aware that some mortgages were still listed on the register, despite being cleared.

‘As the UK Ship Register only records mortgages on the vessel registration, we are unable to insist that a mortgagee submits a discharged mortgage deed to be removed from the Register, however we work with all involved parties to try and help wherever we can to help resolve all queries including mortgage related ones,’ said the spokesperson.


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Source: https://www.yachtingmonthly.com/news/marine-mortgages-is-your-paperwork-up-to-date-88372