By John K. Fulweiler
Highwayman, sailor or single drop of rain. However the song goes, he’ll keep coming back around. Maybe it’s a budding Buddhist in me, but there’s a comfortable something in that seventies ballad. And when with the last line Glen Campbell turns quickly away from the audience; well, it makes me think Glen gets a wee ‘verklempt’ himself. Who knows? What I do know is that boats are a neat example of something coming around and around again. A new owner may take possession of a sailboat with a roster of prior owners. The problem is boats don’t always start new storylines clean and they sometimes carry the scars of their past in the way of maritime liens. That is, the new owner of an old boat needs to take care to try and sail clear of becoming entangled in maritime lien disputes.
What’s a maritime lien? In broad speak, a lien is a legal claim against property arising as a result of a loan, a debt, a service, etc. In the housing world, the treatment of liens seems pretty straightforward in that they’re identified on the property records. In other words, in almost every instance concerning real estate, the world is on notice of the lien. But boy, that’s about as different from the maritime world of liens as is the difference between being afloat or ashore.
On the seas of the general maritime law, you’ll find lots of different types of liens from liens for crewmember wages and salvage services to liens for mechanical repairs and wharfage. Where it becomes interesting is that these maritime liens almost always arise automatically and latch (barnacle-like) to a vessel upon the rendering of a service requested by the owner. For instance, if a mechanic performs a repair, the lien for payment of that service automatically arises and remains (like a fender swinging from a stanchion line) until it’s satisfied. Again, in broad speak, the mechanic doesn’t have to do anything for the lien to attach to the vessel. The mechanic generally doesn’t have to file the lien or give public notice, all of which is the reason why you’ll sometimes hear of a vessel having “hidden liens.” Around our office, we like to refer to them as “mean hidden liens.”
For the prospective vessel purchaser, a hidden lien can pose potential downstream liability because the holder of a valid maritime lien can arrest and ultimately auction the vessel for payment. It doesn’t usually matter that the downstream purchaser wasn’t aware of the lien, because the claim is against the vessel. That is, the arrest and seizure is all under the color of foreclosing the maritime lien, much like a house might be foreclosed upon as a result of a tax lien.
What to do? First off, if you’re like me and sail classic plastic or if you’re simply not the original owner of your craft, there’s no need to panic. Oft times, the issue doesn’t arise and a little due diligence your part will help in tamping down the likelihood of such an incidence. If your vessel is documented, order an Abstract of Title from the National Vessel Documentation Center (it’s a worthwhile $25 charge) and study the abstract to determine if anyone has filed a “Notice of Claim of Lien.” If so, and if you can’t determine whether the alleged lien has been satisfied, speak to your admiralty attorney. If you’re buying a pre-owned boat (to use the lexicon of a car dealer), remember it’s not a car you’re purchasing and you should speak to your admiralty counsel so that robust language speaking to liens and, in particular, agreeing to indemnify, defend and hold-harmless is included in the sales contract. (Also remember this truism that is often overlooked: an indemnity provision is only as good as the person or entity promising to indemnify. The likelihood that the empty shell of a corporation that previously owned your craft will respond to your downstream demand for indemnity in the face of a maritime lien claim is, I’d venture, small.)
Remember too, liens don’t generally last forever and they’re subject to the legal doctrine of laches, which is the concept that time erodes the claim. That is, if the lienholder lets too much time pass, a lien will generally not be enforceable. Whatever the case, a few minutes with your admiralty attorney should help shake out any concerns you may have about lingering maritime liens.
Too long ago, a boss who talked to the tempo of a Marlboro balanced on his lower lip mashed a VHF silent and waved us quiet. “This,” he said, gesturing at the speaker filling the wheelhouse with Glen Campbell’s Highwayman chorus, “This is a stupid cool song.” Indeed it is, and I hope you old friends and faithful crafts of sail and power keep coming back again and again and again.
This article is provided for your general information, is not legal opinion and should not be relied upon. Always seek legal counsel to understand your rights and remedies.
Underway and making way.
Admiralty attorney John K. Fulweiler, Esq. practices maritime law on the East and Gulf Coasts. As a former partner of a Manhattan maritime firm, John now helms his own practice located in Newport, Rhode Island where he helps individuals and businesses navigate the choppy waters of the maritime law. John can be reached anytime at 1-800-383-MAYDAY (6293) or via e-mail at firstname.lastname@example.org.