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Preferred Vessel Mortgage - Definition
Optional Application for Filing - Form

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Chattel Mortgage

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BoatWiki - Definitions

Definition

A chattel mortgage can be defined in boating terms as an instrument wherein a borrower cedes ownership of a boat to a lender as collateral. The lender must thereafter reconvey such interest upon retirement of the debt.

Meaning

Although somewhat popular before preferred vessel mortgages came along, this type of security arrangement is seldom invoked in todays boating industry.

Context

Perfecting this type of encumbrance is not a major problem with state titled boats. On documented vessels, however, an owner may not grant itself a mortgage. In order to accommodate such recording then, it will be necessary to accompany the submission with an Optional Application for Filing. In this case, the mortgage will be recorded with no further consideration given to its content.

Conclusion

Chattel mortgages can be fraught with issues when it comes to liabilities and enforceability. The respective parties should, therefere, consult with a qualified attorney before engaging in this type of arrangment.

Credits and References

4/29/2022 - Page initiated by Team BoatWiki.

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