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Forced Sales of Vessels: Ships, Commercial Vessels, Yachts and Recreational Boats

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Forced Sales of Vessels: Ships, Commercial Vessels, Yachts and Recreational Boats

Asset hub page. Legal information, not legal advice. Last verified: 2026-10-16.

What this page covers

A vessel changes hands in a forced sale when its owner did not choose to sell and the transfer is compelled by (a) a court, (b) a government authority acting administratively, or (c) a creditor or lienholder using a statutory or contractual power without a court. Vessels differ from real estate and from most other personal property in one decisive way: federal maritime law gives certain creditors a maritime lien that follows the vessel into the hands of any later buyer, and that lien can be cut off only by a federal admiralty court acting in rem. The single most important question for a buyer at any vessel forced sale is therefore which channel produced the sale, because the channel decides which liens survive.

  • Federal district courts have original jurisdiction, “exclusive of the courts of the States,” of “[a]ny civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled.” — 28 U.S.C. § 1333(1) (https://www.law.cornell.edu/uscode/text/28/1333 , retrieved 2026-10-16).
  • The Supreme Court reads that exclusivity as covering in rem proceedings: admiralty’s jurisdiction is “exclusive” only as to causes “begun and carried on as proceedings in rem, that is, where a vessel or thing is itself treated as the offender … It is this kind of in rem proceeding which state courts cannot entertain.” — madruga-v-superior-court-1954, 346 U.S. 556 (1954) (https://static.case.law/us/346/cases/0556-01.json , retrieved 2026-10-16).
  • A court sale by a federal district court in an action in rem to enforce a preferred mortgage or maritime lien terminates “any claim in the vessel existing on the date of sale” and “the vessel is sold free of all those claims.” — 46 U.S.C. § 31326(a) (https://www.law.cornell.edu/uscode/text/46/31326 , retrieved 2026-10-16).
  • A maritime lien “accompanies the property into the hands of a bona fide purchaser. It can be executed and divested only by a proceeding in rem.” — Vandewater v. Mills, 60 U.S. (19 How.) 82, 89 (1856), as quoted in barnes-v-sea-hawaii-rafting-2018, 889 F.3d 517 (9th Cir. 2018) (https://static.case.law/f3d/889/cases/0517-01.json , retrieved 2026-10-16).

The sale channels

ChannelWho conducts itGoverning lawDetail page
Admiralty arrest and U.S. Marshal’s sale (interlocutory or final)U.S. Marshal under federal district court order28 U.S.C. § 1333; Supplemental Rules C and E; 46 U.S.C. §§ 31325–31326; district local admiralty rulesadmiralty-arrest-and-marshals-sale
Preferred ship mortgage foreclosure (judicial)Same as above, in rem46 U.S.C. § 31325(b)(1), (c)maritime-liens-and-preferred-ship-mortgages
Preferred mortgagee’s extrajudicial remedy (repossession and private/public sale)Mortgagee, without a court46 U.S.C. § 31325(b)(3), (f); 46 CFR 67.83maritime-liens-and-preferred-ship-mortgages
Marina, storage and repair lien salesMarina / repairer / storage operator, without a courtState statutes, e.g., Fla. Stat. § 328.17; Tex. Prop. Code §§ 70.003–70.006; N.C. Gen. Stat. ch. 44A, art. 1marina-and-storage-lien-sales-of-vessels
Derelict / abandoned vessel removal and disposalState or local law enforcement agencye.g., Fla. Stat. §§ 823.11, 705.103marina-and-storage-lien-sales-of-vessels
State-court execution, attachment or partition (in personam)Sheriff / state courtState execution law, limited by 28 U.S.C. § 1333admiralty-arrest-and-marshals-sale
Bankruptcy trustee / debtor-in-possession saleBankruptcy court11 U.S.C. § 363, limited by admiralty in rem jurisdictionbankruptcy-363-sales, in-re-millenium-seacarriers-2005
Customs / federal forfeiture saleCBP or other seizing agency; or district court19 U.S.C. § 1607; 28 U.S.C. § 1356; 46 CFR 67.263(c)–(d)this page, below

Comparison: what the buyer receives in each channel

Sale channelLiens and claims cut offWhat can surviveTitle evidence for USCG documentationKey authority
Federal admiralty in rem sale (Marshal’s sale to enforce a preferred mortgage or maritime lien)“any claim in the vessel existing on the date of sale,” including a possessory common-law lien; all claims reattach to proceeds in priorityNothing that existed on the sale date, as to the vessel; buyer must still meet documentation citizenship rulesCertified copy of the order of sale and, where local procedure uses one, the order confirming sale (46 CFR 67.263(b)); court order evidencing passage of title (46 CFR 67.77)46 U.S.C. § 31326; 46 CFR 67.77, 67.263
Mortgagee extrajudicial sale under § 31325(b)(3)Mortgagor’s title passes if the remedy is “allowed under applicable law""[T]he rights of any holder of a maritime lien or a preferred mortgage on the vessel shall not be affected” by the extrajudicial transferInstrument foreclosed, affidavit of chronology and statutes, evidence of substantial compliance, bill of sale by foreclosing party as agent (46 CFR 67.83)46 U.S.C. § 31325(f)(2); 46 CFR 67.83
State marina/storage lien sale (e.g., Florida § 328.17)Claims junior to the marina’s possessory lienFlorida: “a prior lien perfected under state or federal law” (e.g., a recorded preferred ship mortgage); federal maritime liens are not extinguishable by a non-admiralty sale under The Adeline line of authorityCopy of state statute, affidavit, evidence of substantial compliance, bill of sale by acting party as agent (46 CFR 67.91 — the regulation’s note names a marina abandoned-vessel statute as an example)Fla. Stat. § 328.17(11); the-adeline-1918; 46 CFR 67.91
Law-enforcement lost-property sale (Florida § 705.103(2)(b)); derelict vessels are removed and destroyed rather than soldOwner’s interest after noticeFlorida requires the bill of sale to state “clearly … that the sale is subject to any and all liens”46 CFR 67.91 (operation of state law)Fla. Stat. § 705.103(2)(b)2., (3)
State-court execution / perishable sale of a vessel (in personam)Judgment debtor’s interest and state-law liensMaritime liens “adhere to the vessel in the hands of the purchaser” (The Adeline, quoting Taney, C.J.)Certified court order (46 CFR 67.77), but the order cannot extinguish maritime liensthe-adeline-1918; madruga-v-superior-court-1954
Bankruptcy § 363 saleInterests satisfying § 363(f)Maritime liens, unless the lienor submitted to the bankruptcy court or the vessel is not under prior admiralty jurisdiction; buyers “take a calculated commercial risk that they have not received clean title”Certified bankruptcy court order (46 CFR 67.77)in-re-millenium-seacarriers-2005; barnes-v-sea-hawaii-rafting-2018
Federal forfeitureInterests forfeited to the United StatesDepends on forfeiture order and innocent-owner proceedings (needs_verification)Certified district-court forfeiture order, or agency affidavit / Declaration of Forfeiture (46 CFR 67.263(c)–(d))46 CFR 67.263; 19 U.S.C. § 1607

▸ For Buyers / Operators — The channel row above is the first underwriting fact. Only a federal admiralty in rem sale delivers title free of maritime liens by statute (46 U.S.C. § 31326). Every other channel leaves at least some lien exposure; see maritime-liens-and-preferred-ship-mortgages for which liens exist and buying-a-vessel-at-a-forced-sale for the checklist.

▸ For Owners / Debtors — Rights before a sale differ by channel: a prompt post-arrest hearing and release on security in admiralty (Supplemental Rule E(4)(f), E(5)); a payoff right before a Florida marina sale (Fla. Stat. § 328.17(10)); a 10-day window to demand a judicial hearing in North Carolina (N.C. Gen. Stat. § 44A-4(b)(2)). Surplus proceeds rules are on each channel’s page.

Title lives in one of two places

  1. Federal documentation. A vessel of at least five net tons, wholly owned by U.S. citizens as defined, may be documented by the Coast Guard (46 U.S.C. § 12103(a), https://www.law.cornell.edu/uscode/text/46/12103 , retrieved 2026-10-16); a vessel of at least five net tons engaging in the fisheries or coastwise trade must be documented (46 CFR 67.7). Mortgages, notices of claim of lien and bills of sale are filed and recorded at the National Vessel Documentation Center (46 CFR 67.213). See uscg-national-vessel-documentation-center.
  2. State titling and registration. State law determines whether an undocumented boat needs a title, registration/numbering, or both; neither requirement is universal. Kansas ordinarily numbers/registers watercraft rather than issuing boat titles (32-1111); its registration is not a title or a guarantee against liens. Florida requires each vessel operated, used, or stored on its waters to be titled by the state, but exempts “[a] documented vessel” (Fla. Stat. § 328.03(1), (2)(a), http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0300-0399/0328/Sections/0328.03.html , retrieved 2026-10-16). Texas lien-sale law refers to motorboats and vessels “for which a certificate of title is required under Subchapter B, Chapter 31, Parks and Wildlife Code” (Tex. Prop. Code § 70.006(a), https://tcss.legis.texas.gov/resources/PR/htm/PR.70.htm , retrieved 2026-10-16).

Hawaii follow-up,October18,2026. Chapter200A is an actual vessel-title system, not a registration-only/UCC-filing shortcut. Section200A-15 uses department receipt/title-file perfection with its inventory,statutory-interest, proceeds,foreign-jurisdiction and federal-documentation exceptions. Section200A-20 requires the transfer-by-law statement,ownership documentation,title-status statement and,for its lien/legal-process branch,proof of notice to department- recorded interest holders. Subject to valid rejection,department acceptance/new record/title follows within20days of delivery plus fees/taxes; recorded security is carried forward unless a court orders otherwise. Secured-party Article9 dispositions instead use §200A-19: its transfer statement/new title alone is not the disposition and does not excuse Article9duties. Actual VRT application prints5/2/25. See hawaii for state-law thresholds/fees and distinct marina, federal-documentation and notice-conditioned buyer interests.

A security interest perfected under state law on a state-titled vessel is deemed a preferred mortgage if the Coast Guard has certified the state’s titling system and the state reports vessel data to it (46 U.S.C. § 31322(d), https://www.law.cornell.edu/uscode/text/46/31322 , retrieved 2026-10-16). Which states are currently certified was not retrieved (needs_verification).

Customs and federal forfeiture (brief)

Customs may forfeit administratively, after publishing notice “for at least three successive weeks” and sending written notice to each apparent interested party, a seized vessel whose value does not exceed USD 500,000 or one “used to import, export, transport, or store any controlled substance or listed chemical” (19 U.S.C. § 1607(a), https://www.law.cornell.edu/uscode/text/19/1607 , retrieved 2026-10-16). Federal district courts have exclusive original jurisdiction of “any seizure under any law of the United States on land or upon waters not within admiralty and maritime jurisdiction” (28 U.S.C. § 1356, https://www.law.cornell.edu/uscode/text/28/1356 , retrieved 2026-10-16). The Coast Guard removes encumbrances from the documentation record on a certified district-court forfeiture order or, for administrative forfeiture, an agency officer’s affidavit or a Declaration of Forfeiture (46 CFR 67.263(c)–(d), https://www.ecfr.gov/current/title-46/section-67.263 , retrieved 2026-10-16). How forfeiture sales treat pre-existing preferred mortgages and maritime liens (innocent-owner and remission procedures) was not retrieved and is needs_verification.

Bankruptcy and receivership (brief)

A bankruptcy trustee may sell a vessel under 11 U.S.C. § 363 (see bankruptcy-363-sales), but the admiralty overlay is distinct:

  • Where lienors litigated their lien claims in the bankruptcy court, “the bankruptcy court had equitable jurisdiction to extinguish the lienors’ maritime liens.” — in-re-millenium-seacarriers-2005, 419 F.3d 83 (2d Cir. 2005).
  • Where a federal district court sitting in admiralty already had the vessel in its constructive custody, the bankruptcy court “had no authority to dispose of the lien through the application of bankruptcy law.” — barnes-v-sea-hawaii-rafting-2018.
  • In an in rem mortgage foreclosure the district court “may appoint a receiver and authorize the receiver to operate the mortgaged vessel” while retaining in rem jurisdiction — 46 U.S.C. § 31325(e)(1) (https://www.law.cornell.edu/uscode/text/46/31325 , retrieved 2026-10-16).

Underwriting summary by channel

See buying-a-vessel-at-a-forced-sale for the full step-by-step list. Headline cost lines retrieved this session:

  • Marshal’s commission in a judicially ordered sale: 3 percent of the first USD 1,000 and 1.5 percent of the excess, not less than USD 100 and not more than USD 50,000 (28 CFR 0.114(h), https://www.ecfr.gov/current/title-28/section-0.114 , retrieved 2026-10-16; 28 U.S.C. § 1921(c)). Custody costs are paid from proceeds ahead of the preferred mortgage as “expenses and fees allowed by the court” (46 U.S.C. § 31326(b)(1)).
  • Bid deposit: E.D. La. — greater of USD 500 or 10 percent, balance within 14 days / at confirmation (LAR 64.6(B)); S.D. Tex. — higher of 10 percent or USD 1,000 for bids of USD 1,000 or more, balance within 7 days (Admiralty Rule E.2).
  • Sales/use tax: Florida taxes an “occasional or isolated sale” of a boat that must be titled or documented, capped at USD 18,000 per sale (Fla. Stat. § 212.05(1)(a)1.b., (5)); Texas imposes 6.25 percent on every “retail sale” of a taxable boat, capped at USD 18,750 (Tex. Tax Code §§ 160.021, 160.026); North Carolina taxes boats “sold at retail” at 3 percent, maximum USD 1,500 (N.C. Gen. Stat. § 105-164.4(a)(1b)).
  • USCG recording fees (46 CFR 67.550): abstract of title USD 25; bill of sale filing USD 8 per page; initial certificate of documentation USD 133; exchange USD 84.

Needs verification

  • Which states’ titling systems are currently certified under 46 U.S.C. § 31322(d) and § 13107(b)(8).
  • Treatment of preferred mortgages and maritime liens in customs/DOJ forfeiture sales (remission, innocent-owner defenses, and whether the forfeiture order recites free-and-clear).
  • California: senior-lender discharge after a Boaters Lien Law sale (Harb. & Nav. Code §§ 500–509 are now summarized in california 12.3 and marina-and-storage-lien-sales-of-vessels).
  • S.D. Fla. Local Admiralty Rule E(17) text (only the court’s sample forms citing E(17)(f) and E(17)(g)(i) were retrieved).

assets, admiralty-arrest-and-marshals-sale, maritime-liens-and-preferred-ship-mortgages, marina-and-storage-lien-sales-of-vessels, buying-a-vessel-at-a-forced-sale, uscg-national-vessel-documentation-center, bankruptcy-363-sales, judicial-sale-confirmation, good-faith-purchaser, lien-survival, the-adeline-1918, madruga-v-superior-court-1954, barnes-v-sea-hawaii-rafting-2018, in-re-millenium-seacarriers-2005, ge-credit-v-drill-ship-mission-exploration-1982, florida, texas, north-carolina

Sources

▸ For Buyers / Operators — Start with the comparison table; then buying-a-vessel-at-a-forced-sale.

▸ For Owners / Debtors — Pre-sale release, payoff and hearing rights, and surplus handling, are channel-specific; see admiralty-arrest-and-marshals-sale and marina-and-storage-lien-sales-of-vessels.

This page provides general legal information, not legal advice. Maritime lien, admiralty and vessel-title law is technical and changes; its application is fact-specific and varies by district and state. Nothing here creates an attorney-client relationship. Verify every statute, rule and holding against the current primary source and consult a licensed maritime attorney before acting. Last verified: 2026-10-16.

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