Wrecked boats and their status

[David]

Tim, maybe you or someone can tell me...

I was visiting a salvage auction site (http://www.usauctions.com/AuctionPastIndex.aspx) which is very interesting in and of itself. And it raised a question I have wondered about for years, Namely, how do you know, when buying a used boat, if it was wrecked, totaled, and contains poorly or substandard repairs to critical systems? I assume the surveyors amoung us will answer, "...by means of a good survey." But, is there also the equivalent of a wrecked title issued by the state, such as with cars that are totaled and rebuilt? I would think banks lending money on a boat mortgage would want to know as it would affect valuation.

I always ponder this question after a hurricane blows thru and I see some of the marine damage from one.

Thanks,

David

[Tim]

...is there also the equivalent of a wrecked title issued by the state...

The short answer is: no, not that I'm aware of. For example, Maine isn't a title state for boats, so with no formal titling there is certainly no avenue for a clearing house of this sort of information. There's an off chance that some state with formal boat titles might have this kind of service, but I doubt it would be highly acclaimed, and participation would surely be inconsistent and wrought with unscrupulous behavior, no doubt.

Boat buying is still very much caveat emptor and uninhibited by the regulation and disclosure laws that surround the real estate market, and the used car market to some extent. This is why, yes, a thorough survey might bring to light some of these issues--evidence of former damage and/or repairs, poor quality workmanship, etc. Whether or not a boat was ever "totaled" by an insurance company really has little bearing on the current quality and condition of that boat--it only means that, by nature of the insurance policy guidelines, the estimated cost to repair the boat exceeded the agreed hull value stated in the policy, so the boat was declared a "CTL", or constructive total loss, and the owner was paid the full dollar value of his agreed hull policy. In many cases, the current owner can purchase his own boat back for salvage value, and make the repairs with what remains of his settlement--or, as is often the case in the boats you see on USauctions or similar sites, the insurance company becomes the owner of the boat, and then sells it for a low salvage value to parties that are interested in effecting repairs themselves.

To reiterate, therefore, it seems that the only way to know about the true condition of a boat at any given time--and the only thing that truly matters--is to thoroughly inspect the boat and systems at the time of purchase. While this may not necessarily highlight the past history of the boat, what it should do is provide insight into the current condition, taking note of visible repairs, evidence of ongoing problems and/or past damage, upgrades (or downgrades, as the case may be) to the vessel systems, etc. Surveys aren't perfect or infalliable, and surveyors are't Gods; anyone in the business who says otherwise should be promptly avoided. Surveys and surveyors are not the end-all, by any means--but can be a good tool in the process, at least.

[David]

Thanks for your thorough response Tim,

On a similar thread, when you finish the daysailor project, will this vessel be considered still a 19XX Triton for Maine vessel registration purposes, or a 200X home-built boat, or some hybred variation of the two? If you were to apply for registration, how would you go about stating value (at least in Florida, you would at that point be on the line for sales tax to the state based on some valuation of the boat)> Is this also true in Maine? I'm not sure that the boat would displace enough to merit USCG documentation, but if it did/could, would it be documented as a home built boat?

Just curious...

Thanks,

David

[Tim]

Good question! I figure I'll cross that bridge when I come to it. To be honest, I don't know exactly what I'll do.

I do know that I will need to apply for a "made up" hull ID number, since bureaucracy is incapable, apparently, of dealing with the non-current-standard hull numbers on boats built prior to the standardization of HINs in 1973.

When I registered Glissando a couple years ago, I found this out. Entering "381" in the hull ID section apparently made the state's computers backfire, since I never received my permanent registration, and it took over a year for them to request from me a HIN application. The paperwork was merely a formality, and now I have some silly fake HIN on my registration. Why use 3 numbers when you can use 12, after all?

I will also surely need to hire one of them-thar surveyors to come survey the boat and place a valuation on her, for insurance purposes. The boat will be a one-off, not a Triton. The fact that a Triton donated the hull for the boat seems, to me, relatively moot here. The finished product will have to stand alone for what it is, nothing more, nothing less. What that turns out to be depends entirely on me, I guess! :<) It'll be rather far removed from a Triton, however.

However, I don't expect (or plan) to pay additional sales tax at the time of registration, other than on the purchase price of the boat (for which I have documentation), since I have chosen to not use my tax ID number to make tax-free purchases for resale. Instead, I pay sales tax at the time of purchase of my materials, etc. (where applicable). I keep careful records of this, of course. Should the boat be sold, the new buyer would of course be subject to sales tax and such based on the then-purchase price.

Whatever the event, none of it affects my process at this stage. I'll just deal with it all when the time comes.

[Figment]

Well well.... Come on down to good ol' connecticut when registration time comes!!!

I expected a similar DMV backfire when I answered the HIN question with "78", but no such snafu materialized. The HIN field of my registration simply reads "none".

This is an interesting issue. Is the daysailor simply a "restored" Triton, or is it considered a new-build?

Seriously now, Tim might you want to look into this sooner rather than later? I've read that USCG regs are getting a little tougher with respect to certifying homebuilt boats, or rather, certifying the builders.
To my knowlege, the CG likes to have sent someone out to the building site periodically DURING the construction. When asked to certify after-the-fact (when they have no record of observation in process), they require some insane level of documentation.

The damnedest things happen once government and insurance companies get involved. A few boats back, my insurance company told me they wouldn't insure my new catamaran because I happened to let it slip that one of the hulls had been replaced when they asked me for the hull numbers. This (by their definition) rendered the vessel a "rebuilt boat" and therefore un-insurable. Damnedest things.

[Tim]

The damnedest things happen once government and insurance companies get involved.

Hehe...don't get me started! Something tells me I could possibly, possibly have an opinion or two on that subject!

[Curmudgeon]

I can speak about www.usauctions (formerly www.bentboat) firsthand, since I actually bought my boat from them. In October of 2001 I had the winning eBay bid on a 1987 37' Hunter Legend - sight unseen, and with relatively little accurate information. I live in (very) land-locked Calgary, Alberta, Canada and the boat was in Mobile, Alabama. I flew down to Mobile on a Saturday and had the boat prepped for shipping by Tuesday. Seven days later, we met the boat at the border, paid my $3000+ taxes and had it sitting in the backyard by 6:00 PM (no fooling around - hired a 75-tom crane to place the boat).

I went into it expecting to find all sorts of untold problems, and there were. For example, the engine was stated as "5 hours SMOH but has a blown head gasket". In reality, the head was sitting in a cardboard box in the icebox, the cylinder walls were covered in rust, and various other motor parts were scattered around the cabin. Mostly there were all sorts of collateral damage due to neglect and improper maintenance. The electrical was a nightmare!

My intention was to completely gut the interior and start over anyway, so while my to-do list is longer than expected - what's another page or two! The engine will be rebuilt, complete new electrical, interior re-installed properly... what can be repaired/restored will be - what can't will be replaced. I have a sound hull and deck, and the foundation of an interior that will eventually suit my needs. MOST importantly, I have a boat in my backyard that I can put sweat-equity into.

You are absolutely correct on the financing aspect. The banks are not willing to gamble on anything in need of repair, let alone something that is not "fixed, in-place" like a house. Coincidentally, I just bought a salvage vehicle on eBay (anyone noticing a trend here?) in California, and had one HECK of a time getting the proper paperwork - not so for the boat. I don't recollect having to produce anything more that a bill-of-sale at Customs.

As for the types of boats at USAuctions, they mostly list powerboats but when a Hurricane touches down somewhere, you'll see a lot of sailboats up for auction too. Some of the boats have tremendous potential. Probably the best example was the brand new, charter-equipped, 42' Dufours. It was being delivered to the fleet in Trinidad but the delivery crew put her on autopilot and went to bed, only awakening to the sound of fiberglass against reef. The boat was valued at $200,000 US; was refloated and sold for $75,000. What are the chances that the delivery crew still have their jobs?

[Tim]

Another site that has a much better selection of boats for sale--mostly damaged and insurance-salvage boats, but with some normal brokerage mixed in--is Certified Sales.

www.certifiedsales.com