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Old 12-19-2012, 05:59 PM
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Default Alabama Boat Title

It's my understanding that Alabama does not issue titles for boats. Is this true? and if so, how does an out of state buyer know that he is getting clear title to a boat? Sorry for the dumb questions, but I live in Florida and am looking at buying a boat that is registered in Alabama.
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Old 12-19-2012, 07:19 PM
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My last boat came from AL and when I went to register it in VA, where we do have titles, they didn't have an issue. They held me up a few extra minutes checking something or verifying AL had no titles but then I was done. (this was a 6 figure boat)

What's funny; The dealer I bought from I only knew from another forum like this one but had never met. The transporter showed up with the boat and started to leave. I had to stop him and ask what about the check???? He said he wasn't told to get one. I called the dealer and asked about his $$$$. He told me to just mail that 6 figure check to him on Monday (my mouth dropped and I fedexed it to him that Monday)
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Old 12-19-2012, 08:28 PM
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It's my understanding that Alabama does not issue titles for boats. Is this true? and if so, how does an out of state buyer know that he is getting clear title to a boat? Sorry for the dumb questions, but I live in Florida and am looking at buying a boat that is registered in Alabama.
you'll want to have a signed Bill of Sale. You'll want to have a registration for the boat (no need for a trailer reg)

Your DMV will process this if you have what you need to have. No problem because answers to DMV questions like this are on the internet and on .gov sites.
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Old 12-20-2012, 01:17 PM
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You don't really know if there are any liens.
In a title state if there is a loan on the boat the lender holds the title, so if the seller cannot produce the title you know there is a problem. In Alabama as far as I know you just have to take the seller's word for it. It would really suck to pay cash for a boat then have it repossed because the previous owner never paid off the loan, but that seems to be the chance you are taking in this state. If somebody knows different please chime in.
I am an Alabama resident but I bought my used boat in Texas and felt really good about having that original title in my hand.
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Old 12-20-2012, 02:06 PM
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You don't really know if there are any liens.
In a title state if there is a loan on the boat the lender holds the title, so if the seller cannot produce the title you know there is a problem. In Alabama as far as I know you just have to take the seller's word for it. It would really suck to pay cash for a boat then have it repossed because the previous owner never paid off the loan, but that seems to be the chance you are taking in this state. If somebody knows different please chime in.
I am an Alabama resident but I bought my used boat in Texas and felt really good about having that original title in my hand.
Good question. IMO, a lien holder would file charges against somebody that disposed of mortgaged property and didn't pay off loans that the boat collateralized.

Finding the boat after you've bought it would be tough. New registration number, new place of residence.

All of my bills of sale include the statement from Seller that, "there are no loans, judgments, liens, or other encumbrances on this boat, and Seller will pay all costs of litigation and penalty to defend Buyer against all claims."

A typical seller would never sign that and not pay off the loan to his bank, IMO.
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Old 12-20-2012, 05:05 PM
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Bamaboy, you may have more faith in your fellow man than I do. I agree that most won't commit fraud under any circumstances but some will do it without batting an eye, especially if they are in a desperate financial situation. It don't think it would be that hard for the lienholder to find the boat either. I doubt that it is a widespread problem but if I were buying a late model boat I would want to know for sure rather than taking the seller's word for it.
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Old 12-20-2012, 07:34 PM
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Bamaboy, you may have more faith in your fellow man than I do. I agree that most won't commit fraud under any circumstances but some will do it without batting an eye, especially if they are in a desperate financial situation. It don't think it would be that hard for the lienholder to find the boat either. I doubt that it is a widespread problem but if I were buying a late model boat I would want to know for sure rather than taking the seller's word for it.

Besides doing what I suggested in the Bill of Sale, what would you do? I've lived at the beach for 9 years, owned 12 boats, and oddly enough, haven't heard of anybody that had this happen to them.

My guess is that somebody that sold a boat and didn't pay off their loan...and stopped making payments...would end up in prison. The bank has enough money to hire attorneys, and the State DA would be happy to prosecute a case of outright fraud and conversion.
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Old 12-20-2012, 10:08 PM
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What would I do? Depends on how bad I want the boat. If you are buying a used boat in Alabama you are taking a greater risk than if you buy it in a title state, no doubt about it, so you just have to decide if it is worth the risk to you or not, and you should also consider if it affects what you are willing to pay versus what you might pay in a state where you will see an actual title and avoid taking that risk.

If you had seen some of the title issues I have dealt with over the years in my real estate business, (I handle quite a few foreclosure properties), you might see it differently. And from what I have seen when a loan goes bad the lending institution just wants to recover the collateral and doesn’t much care who has possession now or how they got it. They also have little to no interest in prosecuting the debtor even if he sorely deserves it- there is no return in that. So I wouldn't count on them going after the SOB seller and leaving the boat for you to enjoy.
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Old 12-21-2012, 02:37 PM
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I just bought my first boat from a dealer, used, in Mobile. Did not get a title. Said he took it as a trade from a local guy. I got a bill of sale and current registration papers. I was uneasy about buying any boat without a title also. But in AL they do not title them. Go figure. Hope nobody comes looking for it.
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Old 12-22-2012, 07:05 AM
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I just bought my first boat from a dealer, used, in Mobile. Did not get a title. Said he took it as a trade from a local guy. I got a bill of sale and current registration papers. I was uneasy about buying any boat without a title also. But in AL they do not title them. Go figure. Hope nobody comes looking for it.

The poster that deals with real estate might have a point, but it's a teeny, tiny one at best. Alabama has a Lot of boats, but I've not seen one newspaper story about this kind of event in the past 25 years.
I've lived in the Orange Beach area within walking distance of the state boat launch and several marinas...and never heard of such an event.

Don't loan papers have some kind of legal/fraud verbiage about disposing of property and not settling up the loan?

Second, IMO, a financial institution can't find a boat if it isn't where it's supposed to be...it's not like a house. Remember, new registration numbers and all boats look alike to repo men A bank likely doesn't even have a photo of the collateral, meaning that they go after the debtor, not his boat. This may differ from Real Estate law.

Third, any bank's agent popping a boat out of anybody's yard would be met with a trespass arrest at best. No LEO would allow him to remove a boat that the owner has a Bill of Sale and Registration for; no matter what paperwork he produced. Ownership would become a civil matter.

If it came to that, it would be a matter of conversion to fall back onto the seller; especially if you include the wording about seller guaranteeing free ownership and promising to defend Buyer from all claims.

Sleep easy.
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Old 12-22-2012, 07:13 PM
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Excerpt from: Alabama Code - Section 7-9A-315: SECURED PARTY'S RIGHTS ON DISPOSITION OF COLLATERAL AND IN PROCEEDS

(1) a security interest or agricultural lien continues in collateral notwithstanding sale, lease, license, exchange, or other disposition thereof unless the secured party authorized the disposition free of the security interest or agricultural lien; and

(2) a security interest attaches to any identifiable proceeds of collateral.


I am no attorney, far from it, but the law seems pretty clear. The lien holder does not lose his interest in the collateral just because of a sale he is not party to. Nobody would underwrite a boat loan in Alabama if that were the case.

Registration numbers might change from state to state but the HIN stays the same and will be recorded with whatever state it is registered in.

I do agree that it is not a widespread problem but what a mess if it happens to you.
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Old 12-23-2012, 09:06 AM
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I recently purchased my trophy from a guy in mobile. I questioned the same thing. What we did was we went to his local dmv and they carry there own bill of sale slips. We filled one out and their notary stamped it. I sent it in with a copy of the registration and got my papers. They also don't tag there boat trailers. That was another ordeal. I contacted my dmv to find out if this was going to be a problem. Just having the bill of sale they issued me a registration only. ... With no title. Go figure. Lol but hey is in my name.
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Old 12-24-2012, 09:24 AM
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There is no greater risk buying a boat from someone if AL than any other state. Crooks will be crooks regardless of where they are. The bill of sale should definitely state there are no liens, etc. The bill of sale is the most important document and should be thorough.

However, if you are buying a boat that will be registered in AL, it is a good idea to get three separate bill of sales - one for the boat, one for the motor, and one for the trailer. In AL, you only pay taxes on the boat itself. Just an FYI...
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Old 12-24-2012, 07:46 PM
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If you buy a boat trailer in AL and want to title it in your own state, make sure that the boat trailer has either a chain of ownership prior to it's coming into AL, or if it was bought new from a manufacturer, get the original manufacturer's paperwork.

Without those papers, your state might not be able to tile the trailer. Check with your own DMV about details.
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Old 12-26-2012, 05:44 PM
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I'm not sure if you have had a answer to the specifics---but if buying a boat in FL and you live in AL the boat should come with a title registered in FL, when you sell the boat later you give the buyer the FL title---no title in a title state you should research bit more---they have to have a title to own/sell the boat???
If the boat was purchased in a state that does not require a title you may be buying a boat that has a lein on it, but not very likely because a lender willing to loan money on a boat where there is no collateral required is most likely issue you a "Credit Card" based on your credit history..
Meaning that if the buyer in AL defaults the boat is not at risk of repossion---it is not collateral in a no title state---acturally just like a four wheeler or a jet ski---no tag needed

Re-read for the facts---this is how it is>>>>
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Old 12-26-2012, 07:10 PM
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Meaning that if the buyer in AL defaults the boat is not at risk of repossion---it is not collateral in a no title state---actually just like a four wheeler or a jet ski---no tag needed
If that's so, how do boats, skiis, etc. get financed in no-title states (AL being just one of many)? What does the lending institution look at if the terms of payment aren't met?
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