Sailing the Legal Waters of Buying a Boat Without a Title

There’s something so mesmerizing and beguiling about the water. It’s no wonder that people gravitate to it and take the plunge to own a craft. However, buying a boat without a title is a tricky business since most states require you to register it. Of course, that means fees and proof of ownership whether you get it from the dealership or the guy from whom you purchased it.

There were nearly 12 million registered watercraft in the United States in 2017. That figure doesn’t tell the whole story about the number of vessels on the water. That includes the ones with and without titles along with those without registration requirements.

The Registration Process

States vary in their requirements. The procedure typically begins with a bill of sale, which is your proof of the transaction. You’ll have to provide this information even with a third-party deal. Details you’ll need to include the usual requirements like date and price. However, you also must have info specific to the craft such as its hull identification number (HIN), the color, make, model, and year.

If it’s a power boat, you’ll have to include details about the engine too, such as brand and horsepower. For your protection, the invoice should also list anything you bought with the boat like skis, personal floatation devices (PFDs), and the trailer. The latter is essential since many states require you to register it too. Saying that the vessel is used might suffice. However, you may also have to mention its condition.

Both parties must sign the document, of course. Some states may want a notary involved too. Therefore, it’s imperative to find out what you need before the sale takes place. Another consideration rests with taxes. Some states require that you pay this amount with it listed on the invoice. You may have to pay it up front when you register and title your boat.

If you’re buying a new boat, you won’t have a title per se. Instead, you’ll receive a statement of origin (MSO) which you’ll take to the agency responsible for registrations to get the formal, state-issued document. In any case, you’ll need a current photo ID, along with all the necessary paperwork. Some agencies also require proof of the HIN.

Remember that the title is the legal proof of ownership. Therefore, you must verify this fact to get this document. As with your car, keep it in a safe place and not on the vessel itself.

Types of Boats

The kind of boat you have is the starting point for whether you need to have a title and registration for it. It may also determine whether you can buy or sell a watercraft. You can group them in three primary categories:

  1. Non-motorized
  2. Engine-powered
  3. Sailboats

Non-Motorized Craft

This class includes familiar choices like canoes and kayaks. There are also paddle boards and inflatables. Requirements for registration and title typically depend on the vessel’s length. Some states set that bar at human-powered ones only, making windsurfing crafts subject to the area’s regulations. Read the fine print to avoid a hassle and a possible fine.

Engine-Powered Boats

This class includes anything from a Jon boat with a trolling motor to fully decked-out motor yachts. You’ll see boats categorized as either outboards or inboards. The former is the most popular type, accounting for about half of all recreational vessels. The chances are if you have a boat with a motor, you’ll likely have to title and register it in all 50 states.

Some areas set a threshold by the horsepower if it is powered. In Washington, for example, you needn’t worry about it if the watercraft has a motor of 10 horsepower or less.Texas regulates all new and used outboard motors and motorboats, regardless of size. You’ll often find that you’re exempt from these laws if you’re from out of state and are only boating on their waters for a short time.

Sailboats

The motor isn’t the only factor when it comes to the title. Sometimes, it rests with the length of the vessel. In Minnesota, for example, craft under 10 feet are exempt—unless you have an auxiliary engine. Bear that in mind when checking sailboat prices.

Keep the dinghy in your sights too in case your state requires you to register it as well. Often, you’ll see a distinction between a dinghy and a lifeboat. Most places don’t need you to register the latter.

Other Title Considerations

In some places, getting the boat title is only half of the story. You’ll also need to get the necessary paperwork for the motor or trailer, sometimes both. The state DNR may handle these requirements, or you may need to go to the county office to complete the paperwork. You’ll find some places that only require the initial registration. Others won’t bother with it unless the trailer is over a specified weight.

Often, you can renew online, making the initial process the most time-consuming. Some places have boat licenses that last for more than one year to simplify it even more. Expect to pay at least a nominal fee whether you’re getting a title for a boat without one. Also, if you’re transferring ownership formally, you may have to pay something for it.

Sometimes, the question lies with how you use the boat. Commercial boat owners may have different criteria. It also depends on where you boat. If you go on federal waters, you’re under the jurisdiction of the US Coast Guard.

When a Title Isn’t a Big Deal

There is one caveat to the question of a title that you need to know. If you look at the regulations regarding boat registration, you’ll see an effective date for updates to the requirements.

Using Texas again as an example, the reg covering all outboards didn’t go into effect until January 1, 1994. That means if you have an older boat, you might be exempt from having one. That also makes the purchase easier.

Some areas have additional criteria, such as the price of the vessel when new, whether it’s homemade, and where you will boat in addition to a date requirement. Many states may grandfather in older watercraft.

You may not have to get the title, but you will still need a detailed bill of sale to register and license it. Many departments group this terminology together since the things you need to have are the same across the board. If you’re going to register it, you’ll get a title and license which you’ll renew as needed.

When You Must Have a Boat Title

You will need a title if you are financing your purchase, not unlike a car loan. Having a title is helpful for you as a boat owner too. If you want to see your boat, it’s a lot quicker if you have one. It also makes it easier for the buyer to check the vessel’s history when researching new boat prices.

If you’re moving out of state, some areas require a title from your previous residence before you can get one in your new stomping ground. You may not even be able to sell your boat in some places regardless of the regulations that existed when you initially bought it. In some states, it’s illegal not to have a title for your boat before going on the water.

A good rule of thumb is to get it if you’re buying a boat without a title. Laws change. What’s legal today may fall to the wayside tomorrow. You’ll save yourself a lot of time and frustration by doing it before you realize you must have this document. Remember that the wheels of bureaucracy turn slowly.

Buying a boat without a title isn’t a major issue unless the state requires it for the transaction to occur. The fact remains that getting a title at all is voluntary in many states.

The wise boater will research the laws of their area to learn about the entire timeline of having a boat from purchase to registration to sale. It’s also essential to stay current with the regulations. Next year, take the time to read the boating regulations pamphlet.