Civil Actions and LiensBoaters Lien Law
Section § 500
This law section is officially named the “Boaters Lien Law”. It establishes the title for this specific set of regulations dealing with liens related to boats.
Section § 501
This section defines key terms used in the article related to the registration and handling of vessels, trailers, and related services. "Department" refers to the Department of Motor Vehicles responsible for vehicle registration. "Mail" typically means first-class mail unless otherwise specified to include registered or certified mail.
"Services" cover repairs, labor, and provision of materials for vessels or trailers used with them. "Storage" involves the safekeeping and mooring of a vessel, plus parking space for related trailers. A "vessel" is any watercraft used for water transportation, except seaplanes or floating homes, and must be registered unless it has a valid U.S. marine document. It can also include a trailer associated with the vessel in the lienholder's possession.
Section § 501.3
This law section explains that when a notice or statement is considered to have been given depends on how it is delivered. If it's through mail, it counts from when it's put in the mail. If it's handed directly to someone, it starts from when it is delivered to them personally.
Section § 501.5
This law states that the procedures for enforcing a possessory vessel lien, as detailed in this article, take priority over any local laws and are the only way to enforce these liens. However, this law doesn't interfere with any maritime liens recognized under federal law.
Section § 502
This section describes the rights to a lien (a legal claim on someone's property) for those who perform services or provide storage for boats registered with the Department of Motor Vehicles. It details the requirements for notifying boat owners and limits how much the lien can be against the boat's legal owner without their consent if costs exceed $1,500, except for a service cost increase within 10%. Boat owners generally have 15 days to respond to consent requests for storage fees. If they don't, or within a 30-day immediate period, consent is assumed. Legal owners must clear any outstanding liens before reclaiming their vessel. A lien expires if no sale is authorized or court action is taken within 60 days. This law doesn’t affect other legal remedies the lien holder may have against the registered owner.
Section § 503
This law describes the process a lienholder must follow to sell a vessel worth more than $1,500 through a lien sale. The lienholder must apply for authorization from the department, providing details about the vessel and the lien. The department sends notifications to the relevant parties, including owners and those with a claimed interest in the vessel, informing them of the lien sale and their right to a court hearing if they oppose the sale.
If opposition is declared, the lienholder can proceed with the sale only after a court judgement or if the opposition is withdrawn. Specific notice and advertisement steps must be followed before the sale, including notifying owners and advertising in local news or public postings. The department also stops registration or title transfer until the lien is resolved.
Section § 504
If you have a vessel worth $1,500 or less, specific rules apply if someone else claims they have a lien on it. The authorities will give the lienholder the registered and legal owners' contact details. The lienholder must send a notice of a pending lien sale to these owners and any other interested parties. They should also include a form to oppose the lien and inform everyone by mail.
The notice must describe the vessel and provide details about the sale, including the date and place, which must be set between 35 and 60 days from notice. It must state the lien amount, the reasons for the lien, and inform about the right to a court hearing. If you oppose the lien, you need to return the opposition form within 15 days. Without a court win, the lienholder can't sell the vessel without your consent.
If the department gets your opposition form on time, it tells the lienholder, who then needs to go to court within 20 days to move forward. Legal papers will be mailed to you if they do, and not responding may mean the lienholder can sell the vessel. If you don't pick up the mail, they might still proceed with the sale.
Section § 505
If you own a boat and someone has a claim or lien on it, you can give up your interest in that boat. This involves signing a release form which must be at least 12-point font and clearly list the boat details, the lien amount, and explain that you're waiving your rights to contest the claim or keep the boat. By doing this, you're allowing the lienholder to sell the boat. The release must be filed with the relevant department if the boat's ownership is transferred after the lien sale.
Section § 505.5
This law addresses how a lien on a boat or ship (vessel) can be lost if someone tricks or deceives the lienholder into losing possession of it. If the lienholder manages to regain possession, the lien can be revived but won't take priority over any new legal claims made in good faith while the lienholder was without possession.
It is illegal to use deception to obtain a vessel that has a lien or for a lienholder to knowingly violate these rules. Violating these terms can lead to misdemeanor charges, with penalties including a fine up to $1,000 or jail time up to six months, or both.
Section § 506
This law states that before a vessel can be sold to satisfy a lien, it must be made available for public inspection for at least one hour at an accessible location. It also must be present at the specified time and place of sale. The sale cannot use sealed bids and must be conducted in a commercially reasonable way by the lienholder.
Section § 506.5
This law states that if a vessel is sold due to a lien within the rules of other sections, the original owner has 10 days to buy back, or redeem, the vessel. They can do this by paying off the lien, the costs of the lien, and any interest from when the payment was due. If the owner doesn't do this, the necessary documents for transferring the vessel's ownership will be completed and given to the buyer.
Section § 507
If a lienholder wants to sell a vessel through the department, they must get a licensed yacht and ship broker to declare the vessel's fair market value based on a recent physical inspection. This declaration isn't necessary if a public agency removes an abandoned vessel from a highway or property.
If a public agency removes the vessel, they must determine its value if it's $1,500 or less for lien sale purposes. If the agency doesn't make this determination within three days, the lienholder or their agent must do it under penalty of perjury.
Section § 507.5
When a boat is sold to pay off a lien, the money from the sale is handled in a specific way. First, the lienholder gets paid what they're owed, plus up to $100 or $125 for selling fees, depending on whether the boat has a trailer. Next, any leftover money is sent to the department within 15 days.
The department then contacts the boat's registered and legal owners within 30 days if more than $10 is left over. If someone else believes they have a right to the leftover money, they can file a claim within three years. If the claim is valid, it will be paid from the remaining funds.
Any funds unclaimed after three years are added to the Harbors and Watercraft Revolving Fund.
Section § 508
This law allows a person or business that holds a lien on a boat (for work done or storage) to transfer that lien to someone else. To do this, they must write it down and hand over the boat. The new lienholder can then act as the original one would. When transferring the lien, the current lienholder must inform the boat's registered and legal owners by delivering a notice in person or sending it by certified mail, specifying the new lienholder's name and address.
Section § 508.5
The department is responsible for creating all necessary forms mentioned in this article. These forms, along with any notices and declarations, must be written in easy-to-understand language without technical jargon.
Section § 509
This law states that no liens can be placed on personal property found in or on a vessel, except for items necessary for lifesaving, safety, mooring, and operating the vessel. These personal items that aren't subject to liens must be returned to the registered owner or their authorized agent if they ask for them.