Glossary of Terms
Abstract of Title:
A record kept by the Coast Guard at the National Vessel Documentation Center that summarizes the history of a vessel while documented includes all ownership, conveyances, interest, liens, and encumbrances that affect title.
The manner the Coast Guard implements for calculating a vessel’s dimensions in order to determine its net weight by volume using a displacement method. It determines whether a vessel meets the five net ton requirement for documentation eligibility.
Authority granted by the Constitution to the federal court when it exercises jurisdiction over all maritime contracts, torts, injuries or offenses regulations that covers maritime activities.
One who is designated to transact business and act as legal agent for another. The scope of authority may be broad or limited as described in the “power-of-attorney,” the instrument executed to define the agent’s right to act as the principal.
Bill of Sale:
An instrument used to convey title to a vessel, executed by a seller to transfer ownership to a buyer. To meet Coast Guard requirements it must uniquely identify the vessel; state the consideration paid; properly identify the sellers and interest owned; name the buyers and interest transferred; be notarized.
A party who arranges the sale between a buyer and seller of a vessel and receives a form of compensation.
A certificate used as the initial title document and to provide build evidence. It is issued by the manufacturer or builder and references the vessel by a unique hull identification number; identifies the first owner; verifies the origin of the vessel parts; verifies the place the vessel was built; lists the vessel specifications. To be used as build evidence by the Coast Guard it must contain these elements and be completed on the accepted form.
Certificate of Documentation:
The form issued by the Coast Guard to evidence completion of the requirements for documentation. It is an internationally accepted proof of ownership of the vessel and lists the vessel trade endorsements for commercial usages.
Certificate of Ownership:
The form issued the Coast Guard that verifies the current Coast Guard owner of record and any active liens against the vessel. Unlike the abstract of title, it lists only the current owner and current active liens, rather than a complete owners & lien history.
A third-party that coordinates the closing of the vessel purchase. Typically, this includes researching the existing title; preparing the transfer and new ownership forms; securing lender’s interest; collecting and disbursing all funds; paying off existing recorded liens; and filing the new titling documents.
An authorization from the Coast Guard, notated on the Certificate of Documentation, allowing a vessel to engage in the commerce, or the transporting of goods or passengers, among different coastal ports or navigable waters of the United States.
Operating under a currently valid commercial or charter fishing licensing, with the appropriate Coast Guard endorsement, if required.
A vessel that is used in a commercial manner for carrying goods and/or passengers or for commercial fishing. If the vessel is five net tons, it must qualify with the Coast Guard for this usage and the Certificate of Documentation must show the appropriate endorsement.
A person or entity that sells vessels at wholesale or retail.
Deed of Gift:
An instrument used to transfer ownership of property from one entity to another without any consideration.
A secondary vessel used to carry passengers or goods from the main vessel to shore. Typically carried onboard the main vessel.
A recorded or unrecorded claim or liability against a vessel.
Assessment of the value of a vessel that is typically paid yearly to obtain authorization for use of the vessel on a state’s waters.
An authorization from the Coast Guard, notated on the Certificate of Documentation, allowing a vessel to engage in commercial fishing.
A preferred marine mortgage that covers more than one vessel as collateral against a security agreement. Each vessel may be discharged separately.
The legal proceeding to terminate a mortgagor’s interest in a vessel which is instituted by a lender to either gain title or force a sale in order to satisfy the unpaid debt secured by the vessel.
The city and state that a vessel owner declares as a vessel’s hailing port, to be marked on the vessel’s exterior hull and referenced on the Coast Guard records.
Hull Identification Number (HIN):
A unique number, assigned to a vessel by the manufacturer and marked on the vessel’s hull. It typically contains the MIC (Manufacturer’s Identification Code) assigned by the Coast Guard, the length, the internal hull number, the month, year and model year.
A manner of ownership with two or more co-owners who take an identical interest in the vessel simultaneously and with the same right of possession. Each tenant has a right of survivorship to the others’ share.
The party recognized by law as the owner of the vessel. It may be one holding a secured interest in a vessel and referenced as either legal owner or lienholder on a vessel title. When there is no secured lien against the vessel the “registered” and “legal” owner are one and the same.
Is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation. The owner of the property, who grants the lien, is referred to as the lien and the person who has the benefit of the lien is referred to as the lien or lien holder.
Limited Liability Company:
A limited liability company (LLC) is a corporate structure whereby the members of the company cannot be held personally liable for the company's debts or liabilities. Limited liability companies are essentially hybrid entities that combine the characteristics of a corporation and a partnership or sole proprietorship. While the limited liability feature is similar to that of a corporation, the availability of flow-through taxation to the members of an LLC is a feature of partnerships.
A contract entered into by the owner of a vessel and a vessel broker that authorizes the broker to offer the vessel for sale in either an exclusive or non-exclusive manner.
Manufacturer’s Statement of Origin (MSO):
A statement issued by the manufacturer of a vessel that acts as the original title document. It typically contains the vessel’s dimensions and lists the first owner of record.
A maritime lien is a privileged claim upon sea-connected property, such as a ship, for services rendered to, or the injuries caused by that property. In common law, a lien is the right of the creditor to retain the properties of his debtor until the debt is paid. Liens on a vessel granted to secure a creditor’s claim for maritime services provided to a vessel or to one who suffered an injury from the usage of the vessel. Its right, under admiralty law, to hold a claim against a vessel as a legal entity.
A form used to change or alter the terms and/or conditions of a preferred ship mortgage.
The party that is granted, by a vessel owner, a secured interest, and certain rights in a vessel as described in the preferred ship's mortgage.
The vessel owner that grants a secured interest and certain rights in a vessel as described in the preferred ship's mortgage.
National Vessel Documentation Center (NVDC):
The facility that administers vessel documentation on behalf of the U.S. Coast Guard.
The process used to recover collateral by statutory authority rather than court action.
Notice of Claim Of Lien:
Typically, an unsecured claim filed with the Coast Guard against a documented vessel.
A six to seven digit number given by the Coast Guard upon initial application for documentation. Must be marked on the interior hull. Also called Coast Guard Number.
Typically used when a legal owner is different from the registered owner. The legal owner is shown on the computer records only and no actual title is issued. When the lien is satisfied, the legal owner merely needs to notify the appropriate state agency to remove the lien from the records.
Power of Attorney:
A power of attorney is a document you can use to appoint someone to make decisions on your behalf. The person you designate is called an "attorney-in-fact." The appointment can be effective immediately or can become effective only if you are unable to make decisions on your own.
Preferred Ships Mortgage:
A written instrument executed by the owners of a documented vessel to grant a priority security interest to the mortgagee. When filed and recorded by the U.S. Coast Guard it gains “preferred” status in the hierarchal order of maritime liens.
The endorsement listed on the U.S. Coast Guard’s Certificate of Documentation showing that the vessel is eligible for recreational or pleasure use only.
The party listed on a state title or registration as holding possessory ownership of a vessel. The registered and legal owner(s) are one and the same when there is no lien against the vessel. In non-title states, the registered owner merely shows the party to whom the vessel is licensed and is not absolute proof of ownership.
The endorsement listed on the U.S. Coast Guard’s Certificate of Documentation that authorizes the vessel to carry goods or passengers from U.S. port to a foreign port.
Release of Interest:
A form signed by an entity holding an interest in a vessel that releases that interest.
The act of recovering collateral covered by a security interest that is in default.
A tax imposed by a state on the retail sale of a vessel. The rate is usually based upon the actual sales price of the vessel.
Satisfaction of Mortgage:
The form used to reflect the payoff of a lien against a vessel that was secured by a preferred mortgage.
A form of registering a vessel for principal use on a state’s waters that is typically issued annually upon receipt of any appropriate taxes or fees.
State Registration Number:
A number assigned by the appropriate state agency to all vessels registered for use on the state’s waters. It is unique in nature and must be affixed to the exterior hull of the vessel unless the vessel is documented with the U.S. Coast Guard. In that case, the number is used strictly to track ownership and payment of taxes and fees.
A claim against a vessel by a state agency for uncollected taxes.
A craft used exclusively to furnish transportation from a larger vessel to shore and back
An authorization noted on a Certificate of Documentation that qualifies a vessel for a particular trade usage, as in coastwise and fishery.
A limitation noted on a Certificate of Documentation preventing a documented vessel from engaging in certain commercial trade usages.