Documentation Frequently Asked Questions
One of the most confusing issues to many of our first time buyers is the issue of boat documentation. Here we have presented the information found on the subject by the USCG. Hopefully I can get the sales department to input the information in “laymen” terms at a future date 🙂 What Is Documentation? Vessel documentation is a national form of registration. It is one of the oldest functions of Government, dating back to the 11th Act of the First Congress. Documentation providesconclusive evidence of nationality for international purposes, provides for unhindered commerce between the states and admits vessels to certain restricted trades, such as coastwise trade and the fisheries. Since 1920, vessel financing has been enhanced through the availability of preferred mortgages on documented vessels. What Vessels May Be Documented? A vessel must measure at least five net tons and, with the exception of certain oil spill response vessels, must be wholly owned by a citizen of the U.S. Must My Vessel Be Documented? Vessels of five net tons or more used in fishing activities on navigable waters of the U.S. or in the Exclusive Economic Zone (EEZ), or used in coastwise trade must be documented unless the vessel is exempt from documentation. Coastwise trade is generally defined asthe transportation of merchandise or passengers between points in the U.S. or the EEZ. In addition, towboats operating between points in the U.S. or the EEZ or between the EEZ and points in the U.S. and dredges operating in the U.S. or the EEZ must be documented. How Do I Know If My Vessel Measures Five Net Tons? Tonnage is determined by volume. Most vessels more than 25 feet in length will measure five net tons or more. What Vessels Are Exempt? Vessels that do not operate on the navigable waters of the U.S. or in the fisheries in the EEZ, are exempt from the requirement to be documented. Also exempt are Coastwise qualified, non-self propelled vessels used in coastwise trade within a harbor, on the rivers or lakes (exceptthe Great Lakes) of the U.S. or the internal waters or canal of any state. Are There Different Types of Documentation? Yes. A Certificate of Documentation may be endorsed for fishery, coastwise, registry or recreation. Any documented vessel may be used for recreational purposes, regardless of its endorsement, but a vessel documented with a recreational endorsement only may not be used for any other purpose. Registry endorsements are generally used for foreign trade. What Are The Requirements For Documentation? The basic requirements for documentation are to demonstrate ownership of the vessel, U.S. citizenship and eligibility for the endorsement sought. How Is Vessel Ownership Established? If the vessel is new and has never been documented, ownership may be established by submission of a Builder’s Certification (Form CG-1261), naming the applicant for documentation as the person for whom the vessel was built or to whom the vessel was first transferred. Also acceptable are a transfer on a Manufacturer’s Certificate of Origin, a copy of the State Registration or Title or foreign registration showing that the applicant owns the vessel. In the case of a previously owned vessel, the applicant must present bills of sale, or other evidence showing transfer of the vessel from the person who last documented, titled, or registered the vessel, or to whom the vessel was transferred on a Builder’s Certification or Manufacturer’s Certificate of Origin. If title was transferred by some means other than a bill of sale, contact the NVDC for assistance. How Do I Establish U.S. Citizenship? Citizenship is established by completion of form CG-1258. In addition to individuals, corporations, partnerships, and other entities capable of holding legal title may be deemed citizens for documentation purposes. Corporations must be registered in a state or the U.S; the chief executive officer and chairman of the board of directors must be U.S. citizens, and no more than a minority of the number of directors necessary to constitute a quorum may be non-citizens. In addition, at least 75% of the stock must be vested in U.S. citizens for a coastwise endorsement, and more than 50% of the voting stock must be vested in U.S. citizens for a fisheries endorsement. Why and How is Build Evidence Established? Evidence that a vessel was built in the U.S. is required for a vessel which is to be used in the fisheries or coastwise trade. Build evidence is normally established by submitting a Builder’s Certification on form CG-1261. That form must be completed by the person who constructed or oversaw the construction of the vessel or an official of the company that built the vessel who has examined the records of the company to determine the facts of build. When Is State Titling Appropriate For My Vessel? State titling is quite acceptable for smaller recreational vessels or larger vessels that will not be used for commercial purposes or venture into international waters. However, such titling is not appropriate, or even allowed, in most states whenever a vessel becomes documented with the U.S. Coast Guard. Federal regulations prohibit a documented vessel from holding a title with any other governmental entity, whether domestic or foreign. This does not preclude a documented vessel from becoming simply state registered or licensed, because the Coast Guard does not view these as actual titles. What Are The Vessel Name and Hailing Port Marking Requirements? Documented vessels do not display their official numbers on the outside of the hull, but are identified by the name and hailing port. The application for documentation must include a name for the vessel composed of letters of the Latin alphabet or Arabic or Roman numerals and may not exceed 33 characters. The name may not be identical, actually or phonetically, to any word or words used to solicit assistance at sea; may not contain or be phonetically identical to obscene, indecent, or profane language, or to racial or ethnic epithets. Once established, a vessel’s name may not be changed without application, fees, and the consent of the Director, National Vessel Documentation Center. There is no rule against duplication of names for documented vessels, so hailing ports are helpful in identifying vessels. How Do I Mark My Vessel? The official number assigned to documented vessels, preceded of the abbreviation “NO.” must be marked in block-type Arabic numerals at least three inches high on some clearly visible interior structural part of the hull. The number must be permanently affixed so that alteration, removal, or replacement would be obvious and cause some scarring or damage to the surrounding hull area. The name and hailing port of a recreational vessel must be marked together on some clearly visible exterior part of the hull. The vessel name of a commercial vessel must also be marked on the port and starboard bow and the vessel name and the hailing port must also be marked on the stern. All markings may be made by any means and materials that result in durable markings and must be at least four inches in height, made in clearly legible letters of the Latin alphabet or Arabic or Roman numerals. The “hailing port” must include both a place in the United States. The state may be abbreviated. How Do I Change The Name and Hailing Port of My Vessel? The name and/or hailing port may be changed by filing an application for change on form CG-1258 with the appropriate fees. If your vessel is subject to a mortgage of record, you must obtain permission from the mortgagee on form CG-4593. Why Does The Coast Guard Require Designation of a Mananging Owner? Many vessels have more than one owner. To make sure that the right person gets mail concerning the vessel, one must be designated as the managing owner. What is a Preferred Mortgage? A preferred mortgage is a mortgage which is given status as a maritime lien. As such it enjoys a certain priority in the event of default. In addition, the Coast Guard is prohibited from making certain changes in documentation including, but not limited to, change of vessel ownership, name, and hailing port without consent of the mortgagee. For this reason many financial institutions require vessels which are eligible for documentation to be documented and to have preferred mortgages recorded against them. Is a Documented Vessel Exempt From State Jurisdiction? No, all documented vessels must comply with the laws of the state in which they are operated. The vessel’s document must be shown to state law enforcement personnel upon their demand. States may require documented vessels to be registered (but not numbered) and to display state decals showing that they have complied with state requirements. Is The Vessel Tender Documented? Documentation of your vessel does not cover the vessel’s tender or dinghy. These craft fall within the jurisdiction of the motorboat numbering laws of the state of principal use. Please contact your state agency that handles the registration or numbering of motorboats for further information. What Will Happen When I Sell My Documented Vessel? Return the original Certificate of Documentation to the National Vessel Documentation Center along with a brief note that you sold the vessel. Your Certificate is non-transferable and should NOT be given to the new owner. When the sale is finalized it is suggested you complete a U.S. Coast Guard Bill of Sale (CG-1340) that can be used by the new owner should he wish to document the vessel. Documentation requires that the new owner send in one signed original and one copy of the USCG Bill of Sale with an Application for Document ation (CG-1258) and fees. The buyer should also be able to use the bill of sale form as evidence of the transfer of ownership to obtain state registration and/or title if he chooses not to document the vessel with the U.S. Coast Guard. If you have an outstanding mortgage of record against your vessel, please make sure the mortgagee (the lender) completes a Satisfaction of Mortgage form and mails an original and one copy to the National Vessel Documentation Center. Your vessel cannot be removed from documentation with an outstanding mortgage.