What you Need to Know About the Coast Guard Bill of Sale
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Having a bill of sale is something every boat buyer needs and might even be required when registering your vessel. You may be wondering what is a bill of sale all about? and why is it required by the coast guard?… In this blog post, we shall be discussing the entirety of the bill of sale, the boat bill of sale as a legal document, how to get the form to use, why boat buyer and seller need the bill of sale, and more.
Without this bill of sale, the Coast Guard will not be able to transfer ownership of the vessel.
What is a Bill of Sale
A Bill of sale refers to a legal document that records the transfer of vessel ownership to a new owner. This document is vital because it provides evidence of a new buyer’s claim over the vessel. In other words, a bill of sale comprises of legal document that records the legal transfer of boat ownership from the current owner to a new buyer.
Boat buyers must understand that there is no legal transfer of boat ownership in the absence of a bill of sale. Bill of sales can also be regarded as purchase proof or sales receipt. As a buyer, if you are thinking or planning to buy a boat from another boat owner, be sure that all required documents for ownership transfer are duly signed and notarized.
Nevertheless, a bill of sales or purchase proof is not restricted only to the sale of the vessel, instead; a bill of sale can be useful for the sale of tangible and movable goods like personal property, caravans, cars, and more. A boat bill of sale proves the legal transfer of ownership of watercraft.
If you fail to sign the legal document, especially the bill of sale, you do not have right over the vessel, even if you have made a monetary commitment. In simple terms, if a bill of sale is absent during the process of buying a boat, then the vessel remains the owner’s property until there is purchase proof.
It is also important that boat buyers should understand that a boat bill of sale is ideal for any kind or size of craft. Beginning from the largest ship to the very smallest dinghy. There is information embedded in a boat bill of sales like the boat purchase agreement which details the terms and conditions of the transaction between the seller and a buyer, boat information, and boat condition.
What is the USCG bill of sale
The USCG Bill of Sale is a document used to transfer ownership of a vessel from one party to another for documented vessels in the United States. This special Bill of Sale must be signed by both the buyer and the seller, and must include the date of sale, the vessel’s Hull Identification Number (HIN), and the names and addresses of both parties. It will be required by the USCG when transferring documentation status.
USCG bill of sale is important to both the seller of a vessel and the buyer. This is because, a seller wants to make sure that there are no faults on his/her part during and after the sales of the vessel. Whereas the buyer wants the bill of sale to be protected against fraud or inability to lay claim of the vessel after payment.
The CG-1340 Bill of Sale form is coming from the U.S. Coast Guard and is the standard form you need to complete.
- Who needs to sign the USCG Bill of Sale? Both seller, buyer, and the notary public!
- When should the USCG Bill of Sale be signed? Right after you agree on the price and have finalized the sale/inspections etc.
- What happens if the USCG Bill of Sale is lost? usually you only need the BOS when documenting your vessel but to sell it, you only need to make a new BOS.
How do I know if a vessel is documented with the Coast Guard?
We have instructions on our article on how to Check Documentation Status of a USCG Vessel.
The Coast Guard does not register or document small vessels (vessels less than 5 net tons). To determine if a vessel is documented with the Coast Guard, you can check the Coast Guard Vessel Documentation Center website or contact the National Vessel Documentation Center to perform a search.
If the vessel has an official number that is 6 or 7 digits preceded by N.O. on a placard affixed internal to the boat, then it is documented.
The best way to know if a vessel is documented is to do a vessel search by vessel-name. You can do this by using the vessel name or by entering the vessel’s official USCG number on the United State Coast Guard search tools provided on our website. You can also use the official number to order a “vessel title abstract“.
Why you need to use USCG form CG-1340 bill of sale?
There are several reasons why a boat buyer and seller need a USCG bill of sale. One of the foremost reasons to get a USCG bill of sale is that; it proves the legality of a boat transaction. It also shows that both parties agree to the terms and conditions associated with the sale of the boat.
The Bill of Sale also proved ownership of a given vessel and will be required by your state or the USCG when transferring documentation. Another reason or advantage of having a bill of sale is that; it offers protection against the fraudulent transaction.
What is inside the USCG bill of sale form?
What should be included in a boat purchase agreement? If you are wondering what is included in the bill of sale form that the USCG provides see the example image below. A boat bill of sale will include the form and it has many sections that you will need to fill out:
Below are some of the details you need to fill out in the CG1340 form:
- vessel info
- seller info
- buyer info
- price paid
- notary signature
- vessel data: builder, name. dimensions, etc.
- warranties and limitations
How does the bill of sale look like?
This image is an example of the USCG bill of sale form CG1340:
Download Coast Guard bill of sale document in PDF format
Steps to complete the USCG bill of sale document correctly – USCG bill of sale instructions
Below are the steps you should take to fill out CG-1340 bill of sale (BOS);
- Show your current documented vessel name. This is when a vessel hasn’t been documented before. A seller must fill out the form and sign
- Write the official number given to the vessel or the HIN (Hull identification number) given by the manufacturer.
- Put the legal names and addresses of all the sellers.
- write the names and addresses of buyers. Take consideration of the shared/equity for each buyer if there are more than one.
- Write the amount paid for the vessel. Note that this amount will be shown on the vessel general index (boat abstract of title report). This is optional.
- Sign and date the document.
- Irrespective of the printed or typed name of the signer, make sure you ascertain that the person was acting as an owner or as an agent, as a trustee, personal representative for the vessel owner, to sign the bill of sale.
- Notarize the document.
- write the vessel data section on the second page of the form
- write the warranties and limitations
Does a Coast Guard Boat Bill of Sale need to be Notarized?
Yes, it is required to notarize the Coast Guard Bill of Sale.
How do you write a vessel bill of sale (DIY)
If you want to make your own bill of sale, you have to make sure the document has all the required information. You also have to make sure that the Coast Guard will accept using a different form. Thankfully, there are templates you can order online customized for you and your boat.
You must understand that your vessel bill of sale must include some vital information about the buyer and the seller. Information like names, addresses, vessel price, date of transaction, notarized signed document, and more. This is to ascertain the legality of both buyer and seller of a boat.
How do I transfer ownership of a USCG documented vessel?
If you are wondering, how to sell a vessel or transfer a certificate of documentation for a USCG vessel, you may want to take a look at our previous article on vessel exchanges. you must submit a U.S. Coast Guard Bill of Sale (CG-1340) or fill out the Sale of Transfer of Vessel section on the backside of the Certificate of Documentation (COD).
What is a COD form CG-1270?
CG1270 is the Certificate of Documentation (COD). It is like your title and proof of ownership. We will discuss the COD in another article. You will get this certificate after transferring ownership of a vessel or after initial documentation with the USCG.
What is the proof of ownership for a boat?
How do you prove ownership of a vessel? Having a bill of sale and COD on board goes a long way in proving the ownership of your vessel. For vessels that are not USCG documented, most states use titles for boats while the other 9 states that don’t have titles and just do boat registration. Another way to establish ownership is to submit a “Manufacturer’s Certificate of Origin” to the coast guard.
Using the Boat Bill of Sale Form when selling a boat
Make sure to use the template form above and print out the bill of sale so that the boat buyer and seller boat have everything cleared out and agreed upon. We have explained how to fill out the form in detail above.
As stated above, the importance of the USCG boat bill of sale cannot be overemphasized. Hence, both vessel buyer and seller need to pay undivided attention to this legal document. Contact a lawyer and notary public for more assistance.