Freedom ranks high on the list of why we love boating, but we aren't totally free on the water. Banks and other lending institutions maintain a legal connection to most of our boats. This connection is called a lien. Agreeing to a lien is part of obtaining a mortgage. In return for lending the money, the bank is given certain rights to protect its interests in the property. The familiar bank lien requires the buyer's signature and is recorded on either the state title or the vessel's documentation papers. It is a public document.


Few people are aware that boats are also subject to so-called "secret liens." This type of lien, known more correctly as a maritime lien, does not have to be recorded anywhere, yet it is just as effective as any lien written on paper and recorded at the courthouse. Your boat could have a secret maritime lien against it at this very moment and you may not know it.

Secret Lien Logic


It doesn't take a Philadelphia maritime lawyer to understand why secret liens are allowed under maritime law. Boats and ships are self-propelled vessels that often require services in ports far from home. The people who provide those services need to protect their interests. That is, they want to get paid.


Obviously, it isn't possible for someone living in a remote area to travel to the vessel's home port to establish a lien. Therefore, maritime law effectively assumes that a lien is created as soon as the money is owed. No paperwork is needed. Nor does the owner of the boat need to receive notice, hence the "secret."


Almost every technician, repair shop, or marina that does work on your boat potentially has a maritime lien against it. Anything done on behalf of the vessel creates this potential. Maritime liens can also secure payment of crew wages, salvage or legal judgements against the vessel.


A secret lien has no effect until the holder goes into federal court where maritime matters are handled. When a judgement is filed against a boat, a U.S. Marshal is sent to "arrest" the craft. While the boat is not handcuffed or put in jail, it does get a brightly colored sticker that makes it a federal crime to move the vessel until the payment is made.

Truths and Consequences


Honest men who pay their bills do not fear maritime liens. Even so, they can have an impact on your boating enjoyment, particularly if you require salvage on your boat. Salvage does not necessarily mean a massive refloating of a sunken boat. It can mean something as simple as pulling a lightly-damaged craft off a sandbar.


You may view being pulled off a sandbar as just getting a tow. Legally, however, your boat is considered to be "in peril" while on the sandbar because it could be damaged if the weather turned foul. Being legally in peril, your boat was salvaged by the marine towing company that pulled it off the sand and towed it to the marina for repairs.


Once the boat gets to the marina, the successful salvor has the right to place a maritime lien on your boat until the salvage bill is paid. The international agreement (Salvage Convention of 1989, or "SALCON 89") governing salvage prohibits the vessel from being removed from the port or place at which it first arrived after completion of the salvage operations until the owner has put up satisfactory security for the salvor's claim.


The United States became a signatory to SALCON 89 in 1996. Prior to that, this same concept of securing the salvor's interest in the vessel had been assured by U.S. court decisions.


In simple terms this means that a marina can cite SALCON 89 Article 21(3) for refusing to launch your boat after repairs are completed, if the salvor so requests. Technically, the salvor must have notified you that he is placing a maritime lien on your boat.


In Article 23(1), SALCON 89 gives the salvor a two-year period in which to make claims against your boat. The clock starts running the day on which the salvage operations ended. Once the claim is made, there is effectively no limit on the length of time it can take to settle the matter.


SALCON 89 Article 21(3) has not yet been fully tested in court. No one knows how the courts will react to an owner who moves his vessel without a release from the salvor. Under the Agreement, the owner should be liable for damages and penalties imposed by the courts. Obviously, it's always wrong to take the law into your own hands.


Boat insurance policies typically provide coverage for salvage of the vessel. It is common practice for insurance companies to issue either bonds or "letters of undertaking" to salvors after the job is complete. These are intended to secure the release of the vessel. This coverage does not always come without an argument from the insurance company.


In a recent case, a boat that ran aground on the East Coast was salvaged without appreciable damage. The insurance company refused to pay the salvor's claim, saying that the boat could not have been in peril because of the lack of damage from the grounding. A court forced the insurance company to pay the salvor, pointing out that the damages to the vessel would have been greater if it had remained on the rocks until beaten to pieces by waves.


Courts have always been rather liberal in awarding payment to salvors. Relatively large payments are viewed as an incentive for people to maintain the towboats and other equipment necessary for this work. The amount of a salvor's claim is not limited to a set percentage of the value of the boat. Rather, it is based on a number of considerations including the difficulty of the job, the risk to the salvor, and the potential damage to the environment if the vessel were not salvaged.


For more information about salvage of recreational vessels, consult an attorney familiar with maritime law, or go to www.safesea.com.