Legal Question in Real Estate Law in California

Re: Boat loan lien-holder issue

First of all wired to seeing a real lawyer where you can give all the facts and paperwork to the attorney to reviewing give you proper personal in your face advice. You prepare your own document and screwed up. You what a screwup again??? Having to learn yet that you need proper representation to do the paperwork so that all the bases are covered. As they say on the commercial pay me now or pay me later. You now going to possibly have to pay more later because of your screwup. What you did was absolutely adequate but not cooled and really bad if you wore an attorney. So, I can say you look at paperwork you need unleaded tell you go to an attorney who is dealt with personal property financing. And, don't wait.i have been practicing law in this speciality for over 30 years in the san francisco bay area and if you wish to consult with me you can contact me at 925-945-6000.

Re: Boat loan lien-holder issue

In order to "take" specific property as collateral, you need to go somewhat beyond the contract you describe. The simplest way is to keep physical possession of the collateral until it is paid for. This doesn't work in most modern life situations, where buyers want to use their financed property. Therefore, the mortgage and the deed of trust were developed for real property, the certificate of title or "pink slip" for motor vehicles, and the security agreement and financing statement for most other kinds of personal property.

I think most boats and aircraft have certificates of title similar to automobiles. If so, the newly-issued certificate to your borrower should have shown you as lien holder.

With other types of personal property such as machinery, inventory, etc. there is a security agreement in which the borrower pledges the item(s) as collateral. The lender then prepares and files a financing statement (UCC-1) with the Secretary of State, which is notice to the world of the existence of the lien.

This is a thumbnail description of a complex subject. As things stand, if your borrower defaults you can probably sue and get a money judgment but you are only a general creditor and probably have no particular claim on the boat.