Mooring and storage: what to do when boat owners don’t pay their fees?

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Non-payment of berthing or storage fees, by boat owners, is an all too familiar scenario faced by marina operators. Delinquencies are chased away and correspondence goes unanswered, which can often result in an abandoned boat being left on marina premises, preventing rental of the location or storage space. In this guide, Marine specialist Jonathan Hadley Piggin provides a number of remedies that can help marinas recover fees, as well as remove a boat from their premises.

Stop the boat

The arrest of a boat prevents it from moving, pending the resolution of a legal action, in which usually the boat to be stopped is the subject of the claim. This gives the marina security in that if it is successful in court there will be something that can be sold to recoup the judgment amount plus costs – assuming the boat is of sufficient value.

The marina will have to file a claim in Admiralty Court for overdue berthing or storage charges. At the same time, or once the request has been issued, he can also request an arrest warrant. Once the warrant has been issued it will be sent to HM Revenue & Customs who will arrest the boat by affixing the claim form and arrest warrant to the boat.

Following this, the boat is then under the control of the Marshal of the Admiralty and cannot be released without his authorization. If the fees remain unpaid and the marina obtains a judgment in its favour, which is not paid by the owner of the boat, the Marshal of the Admiralty will sell the boat and use the proceeds of the sale to pay his expenses, the unpaid royalties and legal costs incurred by the boat owner. marina subject to all other claims that may have priority.

However, the cost of taking legal action in Admiralty Court and arresting a boat is high and only appropriate if the unpaid costs are significant. It is therefore important that the marina is satisfied that the value of the boat is sufficient to satisfy the debt owed, the Marshal of the Admiralty’s costs and part of the estimated costs of claiming and arresting the boat.

Debt recovery

Legal proceedings may be initiated against the owner of the boat to claim the amount of royalties due. However, as the case is against the boat owner personally, the marina will need to know where the boat owner lives before the case can be brought. If the marina is aware that the owner of the boat has moved and does not have the new address, it will be necessary to assign tracing agents to locate the owner’s new address.

Additionally, before legal action is taken, the marina (or its attorney) must write to the boat owner confirming the amount owed and that if the fee is not paid within a specified time, such as 7 days, legal action will be taken. brought against him.

If the amount of unpaid fees is less than £10,000, the marina will not be able to recover any costs incurred in filing the claim. However, if the amount of unpaid costs is more than £10,000 and the marina wins the case, the court can order the boat owner to pay a certain percentage of the costs incurred by the marina.

Bringing a claim in county court can be a long and expensive process, especially if the claim is being defended. Moreover, even when a judgment is rendered in favor of the marina, the boat owner may still not pay the amount awarded and the marina will therefore have to take steps to enforce the judgment.

Although a debt collection claim may result in the recovery of unpaid fees, it does not provide for the removal of the boat from the marina premises.

Insolvency proceedings

The marina could issue a petition for bankruptcy of the owner of the boat if he is an individual, or if the owner is a company, a petition for liquidation of the company, provided that, in both cases, the amount outstanding is greater at £5,000. (£750 for a company).

Before issuing such a procedure, a legal demand must be served on the owner. This must be served personally, and therefore it is necessary to ask the processing servers to serve it. The legal demand provides that payment (or agreement to pay) must be made within 21 days of the date of demand, failing which the marina is entitled to file for bankruptcy or liquidation.

The threat of bankruptcy or liquidation often results in a payment, especially in the case of an individual due to the stigma associated with bankruptcy. Although issuing and serving a legal demand is relatively inexpensive, insolvency proceedings are expensive, although they do not need to be continued after the legal demand. However, these procedures do not provide for the removal of the boat from the marina premises and are therefore more likely to be used where the boat has already left the marina.

Intrusion

The marina is able to sue for trespass by seeking an order for possession of the boat and payment of unpaid fees. If the possession order is granted by the court, the marina will have to appoint a bailiff to remove the boat. The bailiff is able to sell the boat if the owner does not pay the court judgment sum, and the proceeds of the sale will be used to satisfy this. The marina may also seek an injunction against the boat and the owner of the boat to restrain them from being or docking in the marina, if such an injunction is necessary.

However, a trespassing claim can be time-consuming and costly, particularly if the claim is being defended.

Ports, Docks and Piers Clauses Act 1847

This law applies to marinas which have been created by special Acts of Parliament and which are therefore generally commercial or fishing ports.

The marina may stop or detain any boat moored or stored in the marina for which there are unpaid charges (known as “tariffs” under the Act). The boat may be held until the dues are paid or, in the event of non-payment, the marina may sell the boat. The marina has the right to do this without the need for court permission. The action is taken against the boat and not against the owner, so it does not matter if the current location of the owner is not known to the marina.

To exercise the power, the marina must issue a formal notice of unpaid fees. If they remain unpaid, the marina can then stop the boat by serving a notice of seizure in accordance with the law. The notice is served by placing it on the boat. The notice should also be sent to the owner (if the marina knows where they are). If the fees are not paid within 7 days of serving the stop notice, the marina can have the boat appraised by two independent appraisers and sell it. The proceeds of the sale will be used to pay the unpaid fees and the marina will have to account to the owner for the balance.

Crimes (Interference with Goods) Act 1977

The Act provides that, in certain circumstances, the marina can dispose of a boat itself, without the need for a court order. To do this, the Act should be incorporated into the marina’s terms and conditions so that the boat owner is made aware that the marina can rely on the Act. There may however be limited circumstances where the marina can still rely on the law even if it is not incorporated into their terms and conditions. The procedure provided by law is particularly useful when the license period has expired and the owner of the boat refuses to pay the due fees but the boat remains in the marina. It is also useful when the amount of unpaid fees does not justify the costs of arrest. For these reasons it is this procedure which is most often used by marinas where fees are unpaid.

Under the Act, the marina must notify the owner of the boat in writing that the license has expired and that the owner is required to remove his boat from the marina. The notice must also indicate that failing to do so, the marina has the right to sell it, under the provisions of this law.

For the notification to be effective, certain conditions must be met. The notice must identify the vessel, indicate its location and the amount of unpaid fees, if any. When the fees are unpaid, the marina cannot sell the vessel until a period of 3 months after the date of the notice. The notice must indicate the date after which the vessel may be sold. If the marina does not know the whereabouts of the boat owner, it should take reasonable steps to contact them, such as placing an advertisement in the local newspaper and at the marina.

The marina has the right to sell the boat at the “market” price and use the proceeds to pay unpaid royalties and costs incurred by it in the sale. Any remaining sale proceeds must be paid to the owner. The marina will have to have the boat appraised by two independent brokers, before the sale, in order to demonstrate the market value of the boat.

Action prior to the opening of the procedure

Before taking any of the above actions, the marina or its attorney should write to the boat owner advising them that, if the charges remain unpaid, one of these actions will be taken and give them at least 7 days to pay . This is to ensure that if the case goes to court, the marina can demonstrate that it acted reasonably before taking legal action.

Additionally, it may be possible to obtain the owner’s consent for the marina to sell its boat, and so the marina should include in the letter to the boat owner a request to that effect and a letter written on behalf of the owner confirming their consent to the sale of the boat by the marina. This will save the marina from incurring litigation costs and could result in the boat being put up for sale sooner than it otherwise would have been.

With regard to moving the vessel to a less expensive berth or alternative storage area prior to the sale of the vessel or its removal from the marina premises, the marina may not do so without the owner’s consent to unless its terms and conditions provide that it is able to move the boat in certain circumstances, such as when necessary for the commercial operation of the marina. If the terms and conditions contain such a clause, the marina must write to the owner informing them that they will move the boat, indicating when, where and why they will move it.

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