The price was right and the surveyor recommended by the dealer and hired by the buyer gave the boat a more or less clean bill of health, noting that, although he found some elevated moisture levels in the deck, frames and transom, these structures appeared sound. The survey report recommended only minor repairs and cosmetic work. When a mechanic’s inspection showed problems with the starboard engine, the dealer agreed to drop the price by $7,500 to $35,000.

What could go wrong, the buyer thought, especially given the PTL mission statement, “Through grace and with glory to God, we will locate, list and sell many boats and yachts, thus building lasting relationships with our many satisfied customers.” He traveled to Port Clinton in September 2004 for the sea trial and later arranged to have the boat shipped to the west coast.

Fast-forward a few months to spring 2005. The proud new owner recalls, “With the boat ready to go, I took it out for the first time. The only major discrepancy I noticed was the starboard gunwale had excessive vibration.”

He was in for a surprise when he cleaned the boat afterwards. “I noticed that repairs had been completed on the starboard gunwale, keel and bow flair and there was water seepage on the starboard chine.” In retrospect, he recalled that the online ad on PTL Yacht Sales’ web site showed photos taken from the boat’s port side only.

The owner decided to have the boat surveyed again, but this time by a local surveyor who found the boat's condition made it unsafe to use and wrote in his report, “This vessel was subjected to an excessive trauma, which caused serious damage to the starboard hull bottom, starboard topsides, starboard deck, starboard cabin top, helm, controls and wiring.”

The situation, already strange, took another twist. The marina in Bellingham, WA, where our member keeps the boat just happens to be the dealership that sold it to its first owner in 1997. The dealer confirmed that the boat had been moved to Texas, where they learned from its first owner that it was totaled in a hurricane after breaking free from its mooring and rolling onto the beach — on its starboard side. The owner then took the boat to Ohio, where PTL Yachts put it up for sale.

Our member reported his predicament to the BoatU.S. Consumer Protection Bureau last summer, hoping that the dealer and possibly the surveyor in Ohio could be persuaded to help with repairs.

The surveyor agreed to travel to Bellingham to inspect the boat and has since offered to help, although he maintains that it is possible the damage occurred while the boat was being trailered from Ohio to Washington.

“I think it is a fine line between over-reacting to an unknown situation and understating it, as in the case of wet core,” the Ohio surveyor told BoatU.S. “I think we could argue the points here forever.

“Assigning blame is time consuming and expensive, resolving the differences at this time would make more sense,” the surveyor concluded.

The boat’s owner and BoatU.S. are still waiting to hear from the dealer, PTL Yachts. Since the boat was sold in “as is” condition, the owner may have no recourse against the dealer.

This scenario points to a disturbing dilemma for boat buyers. While all states have laws requiring the titles of junked or salvaged cars be “branded” as such, few states have similar laws for boats that have been wrecked in storms and accidents.

Unlike automobile titling laws, which are consistent in all 50 states, boat registration laws are a patchwork of different requirements and regulations across the U.S. All states have boat registration laws in place, but laws aren’t consistent about which boats must be registered. On top of this, powered vessels are required to be titled in only 36 states, so thieves or others wishing to obscure a boat’s history need only cross state lines to avoid detection.

States routinely require that titles of junked boats be relinquished to the boat registration agency, but little else. If a wreck is moved to a non-titling state, it can be refurbished and sold — and the lack of title doesn’t raise any concern.

“The problems caused by the absence of salvage vessel titling laws have come onto everyone’s radar screen because of all the hurricanes in the past two years,” says Carroll Robertson, senior vice president of BoatU.S. Marine Insurance Claims. “The state of Florida has instructed insurance companies that they [insurance companies] must be named on the titles of boats sold in salvage auctions.”

This should serve as a red flag to buyers that the insurance company has declared the boat “a constructive total loss,” in common parlance, totaled.

Trouble is, similar requirements are not in place in any of the other Gulf states that bore the brunt of recent hurricans. Tens of thousands of boats have been reduced to scrap during the past three years as a result of more storms. The Insurance Journal (January 2, 2006) estimates that, during Hurricane Katrina alone, almost 75,000 recreational boats were destroyed. It’s a safe bet that a fair number of these wrecks will wind up in the hands of owners who have no clue about their histories.

“Many of these boats are sold ‘as is, where is’ by third-party liquidators,” Robertson says. “The new owner may not know about hidden damages” until a stringer cracks or something major happens and repair efforts reveal the true extent of the destruction. At this point, the owner is really up a creek because marine insurance policies do not cover pre-existing conditions and owners have little or no recourse against sellers when boats are sold “as is.”

“Right now, we have no jurisdiction” against boat dealers who sell salvaged vessels without warning buyers, says Rick Barrera, who manages the boat registration and titling program for Ohio. In the case of the Sea Sport described earlier, the buyer bears the burden of proving that the dealer knew the boat’s history.

Protections afforded consumers by federal warranty law and state implied warranty provisions are limited when products are sold in “as is” condition.

Although a few Web sites purport to provide comprehensive background information about used boats, consumers should be skeptical, since there is no one clearinghouse for boat information, short of checking records of each boat by calling the boat registration agencies in each state. However, this isn’t an easy process and boat registration records available to the public do not include information about accidents or insurance claims.

“What is needed is a federal uniform vessel titling act adopted by all the states,” says Robert S. Fisher, a maritime attorney in New Jersey and former chairman of the yacht finance subcommittee of the Maritime Law Association. State boat registration or numbering laws are in place because they are required by the Federal Boat Safety Act administered by the U.S. Coast Guard but the Act does not require states to adopt titling laws.

Nevada is one of three titling states that actually requires that salvage vessel titles be “branded.” Fred Messman, the state’s boating law administrator, cites a recent case.

“The insurance company had totaled a vessel, beyond repair and the next summer it was back here for registration from a ‘new’ owner,” he recalls. “The insurance company had sold it for ‘salvage’ and someone bought it, reconstructed it and sold it. The new owner did not know it had been destroyed, rebuilt and then sold to him.

“We captured the HIN [in the process of registering the boat] and when that was entered it blocked the registration because it was marked as ‘destroyed,’” Messman says. “To me this is a consumer protection issue and fraud.”

Despite a 1988 Congressional mandate to create a national Vessel Identification System (VIS), the lack of uniformity of state boat registration laws makes it virtually impossible to develop a anything similar to the system already in place for automobiles. Besides helping law enforcement officials track stolen or abandoned vehicles, the system for automobiles also provides ownership and information about previous traffic accidents or traffic law violations.

A Congressional General Accounting Office report in 2002 shows why advocates of a vessel identification system don’t expect the problem to be solved soon. Citing profound incompatibilities between the information gathering and sharing systems of states and the U.S. Coast Guard, the GAO investigation found that many states are “unwilling or unable to commit the funds needed to participate.”

Furthermore, although the Coast Guard initiated a plan to develop VIS, “it is unable to estimate when it will develop a system that could upload, integrate and update states’ data.” State boating law officials say that they are hindered because each state gathers different information about boats and many use incompatible data processing programs.

“Fourteen years after legislation required the Coast Guard to develop a vessel identification system, no such system exists and future plans for developing the system are uncertain,” concludes the GAO report.

“The thing that will drive it is some kind of tragedy,” comments maritime lawyer Fisher, predicting that a badly damaged vessel sold to an unsuspecting owner may eventually result in accident or injury and that this is one of the major reasons why salvage vessels should be marked.

Buyers can take some precautions. First and foremost, buyers should never rely upon a marine surveyor recommended by the seller. And, written into any sales agreement, even for “as is” sales, should be a statement that the seller has revealed everything he knows about the boat’s existing or repaired damages.

For the owner of the Sea Sport and others like him, the only recourse may be litigation.

In his last correspondence with BoatU.S. he asked, “Do you have any lawyer or attorney references in my area? It appears this may be the path I have to take.”

(c) Copyright BoatU.S. Magazine, March 2006