Buying Boat w/ Bonded Title

[jhunt]

Looking at a boat with a bonded title.  All that I’ve seen looks ok and boat checks out.  My understanding after three years the bond goes away and it’s a standard title.  Anyone have any info on these?

[Nitrousbird]

https://blog.suretysolutions.com/suretynews/buying-a-car-with-a-bonded-title-heres-what-you-should-know

There is a bit of a risk and I would price my offer accordingly. 

[carguy79ta]

Just keep in mind..."what's the worst that could happen..lose the boat?? Yeah right." A year later...

 

[jhunt]

2 hours ago, carguy79ta said:

Just keep in mind..."what's the worst that could happen..lose the boat?? Yeah right." A year later...

 

Yeah, need to get some more info from owner I think.

[TallRedRider]

Sounds sketchy.  I would not buy one.  

[carguy79ta]

I would def not buy one.

[jjackkrash]

The purpose of the surety bond is to the pay off a potential ownership claim from an alleged rightful owner who claims title to the vehicle down the road.  The seller is responsible to repay the surety, not the buyer, and the purpose of the bond is to protect a subsequent bona fide purchaser and the rightful owner.  If the seller is willing to put up the cash to pay for the surety bond, the seller must be fairly confident that it is his car to sell.  I see the risk as largely the risk of some hassle down the road, but not a big financial risk.   But look at the terms of the bond itself, it should explain under what circumstances the bond pays off and to whom and how much.  

[TallRedRider]

@jjackkrash, thanks for the insight. 

What is a situation where a bonded title would be done?   I am trying to envision when that would happen.  

 A storage unit was confiscated after nobody paid the bill?  The boat was found at a drug dealer's mansion when they got arrested?  

[jjackkrash]

@tallredrider, licensing/registration/title requirements are state specific but there is going to be an some issue with proof of chain of title.  It could be as simple as a lost original title and the state won't issue a new title just based on an affidavit of lost title without a title bond or other compelling proof of chain of title.  But, again, each state is different, so I don't want to speculate too much on the potential reasons.  

[jhunt]

@jjackrash, thanks for the info.  In this case it’s that two friends bought boat together one moved out of state and was done with the boat.  The one that moves had the title in his name and couldn’t find title.  The guy I’m buying it from had to get the surety bond to get the title.  I’ve asked to review the language in the bond.

[Eagleboy99]

3 minutes ago, jhunt said:

@jjackrash, thanks for the info.  In this case it’s that two friends bought boat together one moved out of state and was done with the boat.  The one that moves had the title in his name and couldn’t find title.  The guy I’m buying it from had to get the surety bond to get the title.  I’ve asked to review the language in the bond.

I am sure the seller will give you contact info for the guy that moved out of state to verify the story.

[bkearney]

On 11/16/2019 at 10:38 AM, TallRedRider said:

@jjackkrash, thanks for the insight. 

What is a situation where a bonded title would be done?   I am trying to envision when that would happen.  

 A storage unit was confiscated after nobody paid the bill?  The boat was found at a drug dealer's mansion when they got arrested?  

I had to get a bonded title on the trailer since the owner no longer had the title in hand. After the term expired, I got a note that it was free and clear. I dont know the price, but it was a standard practice.