There are several reasons why a claim of lien may be filed. Understanding the process is an important part of knowing when you have the right to file such a claim against another boat owner. Keep in mind that filing a claim doesn’t automatically ensure that it will be enforced or that you’ll receive any type of compensation as a result. Are you considering filing a lien? Use this guide to help you determine if it’s the right choice and how to go about the process.
Causes for Filing a Claim of Lien
To break it down to its basics – a claim of lien can be filed when one party owes another money. This can be in the form of the money itself, or it can be money owed for damages caused. Each situation is unique, but this is the essence of the process.
Most of the time a lien is filed due to a broken contract or a maritime tort. For example, a crew member may file a claim of lien for wages owed that have not been paid. Another example may be when money is owed for freight that was delivered.
Another reason to file a claim of lien is when damage is sustained and money is owed for repairs. This may happen due to a collision on the water. If someone on board is injured, a claim of lien may be filed for compensation for medical care.
Anytime money is owed by a boat owner to someone associated with the boat, whether it’s part of the crew, someone involved in commerce, or another boat owner that was involved in an accident, it may be necessary to file a claim of lien to get money owed.
What is the Process for Filing?
This process can be carried out against virtually any documented vessel. The first step is to send a notice to the person you are filing the claim of lien against. That notice should also go to the lender who holds the mortgage loan for the boat. The lien will then show up on the Abstract of Title so anyone searching for information about the vessel will know that there’s a lien filed against it. If the owner decides to sell, buyers will be able to see that there is a lien, which may deter them. That can motivate the owner to settle the lien with you.
Other Things to Know
Remember that just because you file a claim of lien does not mean you will get any kind of compensation. However, it’s more likely than if you wait around for the boat owner to pay what is owed. It’s also a good way to motivate someone to pay you since the lien will go into the boat’s documentation, which others can see if they search for information on the boat. Additionally, if there’s a preferred ship mortgage associated with the boat, it can violate the terms of the mortgage, which can motivate someone to settle the claim.
Navigating the claim of the lien process can be overwhelming. You can file a claim online at Vessel Documentation Online and we have knowledgeable staff who can help you with any questions.