BoatWiki - Definitions
A "legal owner", in terms of state level boat titling, is a party or the parties with an unencumbered ownership equity. In scenarios where the boat has been granted as collateral for a loan, the lender then becomes the "legal owner" with the debtor shown as a "registered owner". When the loan has been paid-off, a title is re-issued without such designation. There are also situations where this type of arrangement applies to a lease arrangement.
Not all states employ this type of listing. In some jurisdictions, the lender will simply be shown as a "secured party". The legal owner concept does not apply to USGG vessel documentation as mortgages are recorded in order to secure a lender's interest.
In a legal and registered ownership arrangement, the burden of liability for the boat's operation typically falls upon the registered owner.
Parties that are confused about the relationship between a legal and registered owner should consult with a qualified attorney and tax professional.
Credits and References
2/28/2022 - Page initiated by Team BoatWiki.