The Vessel Closing Niche

Maritime law represents a broad legal category, but it does not mean you have to do everything that is done in the practice area.  Personal injury lawsuits in this area?  Who needs them.  As with any broad based area of law you can find one small, more systematic, profitable niche.  Let me suggest one for you -- vessel or yacht closings and title insurance.

You likely have an idea of real estate and real estate closings.  There are just attorneys that limit their practice to title opinions and real estate closings.  An attorney or title company, or a combination of the two, perform a title search, correct any issues made apparent, and issue title insurance to insure good title to the property is being passed from the seller to the buyer, and that the lender's investment is secure.

Like real estate and improvements, vessels come in all sorts of sizes, perform any number of tasks, and are often represent extremely expensive investments.  Like in real estate, buyers, sellers and lenders need to be protected for this investment also bears risks.

In the past the purchaser and lender tried to limit it risks in the purchasing of and lending on a vessel by retaining counsel to investigate liens -- a title opinion if you would.  Although that is still done today, the purchaser of and lender on a vessel now has the option of insuring the risk that the vessel may not be free of liens or encumbrances through the use of title insurance, much like that used in the purchase of real estate.

Like title insurance on real property, vessel title insurance covers flaws that occur before the insurance is purchased and the purchaser only makes one payment or one premium payment at the time of purchase.

You, as an attorney, might take the steps necessary to issues such vessel insurance policies, but whether you do or not, liens will still have to be researched, opinions will still have to issued, flaws in the title identified, and a formal closing will need to be conducted.

Undisclosed liens are apparently a problem in purchasing or lending against a vessel.  This makes title insurance an attractive option because many of the liens that a vessel incurs are hidden in the sense that under the unique laws of Admiralty a vessel can legally accrue liens against it without the requirement of recordation.  Also, it does not help that a vessels, unlike your home, are mobile. For example, it can be difficult to discover liens against an investment when the vessel may have traveled across the oceans in its existence. Without this title closing and insurance process the best a purchaser or lender can do to reveal title defects in a vessel transfer is to hire an Admiralty attorney whose leg work might reveal the existence of liens by tracking down the businesses that have been involved in the life of the vessel. However, even the most diligent attorney will not discover all possible title defects or fraudulent transactions.  In reality, this process still takes place with vessel title insurance but now there is a higher degree of comfort for those buying and lending against a vessel.

Do not think you are up to representing the buyer, sellers and lenders of oil tankers?  Then maybe just yachts, luxury boats, and fishing boats are enough for your niche practice.  Even better because many of these vessels costs more than an average home these days, and purchasers involved in these transactions are less sophisticated and are not looking for title issues.

Among the task of an attorney is to abstract the title by reviewing the United States Coast Guard (USCG) records, a state title check where the boat is currently registered, and issue an attorney's opinion.  Then set up the organizations and obtain the licenses necessary to issue vessel title insurance.

Apparently a lot of things can give rise to a maritime lien, including but not limited to: providing necessaries and the maintenance of a vessel such as dockage, fuel, supplies, provisions, repairs, maintenance and insurance; seamen’s wages; salvage services; tort such as collision, personal injury claims; cargo related claims; a preferred ship’s mortgage, which must be recorded and usually appear on the Abstract of Title; and marine contracts such as towage charges.

There are other risks that may affect title to the vessel that cannot be detected even after diligent search and evaluation. These risks include, but are not limited to, such matters as: evidence of title may be based on forged or fraudulent documents or involve parties without proper capacity; previous errors in the recording process; and the difficulty or impossibility of determining certain ownership interests.

These are why the attorney is needed.

How do you get started?  First, of course, is read everything you can find on this narrow subject.  Read, especially the blogs and websites of other attorneys, lenders and brokers and gleam all you can from them.  Second, contact the title underwriters and find someone to talk to.  Talk to other attorneys in the business.  Ask to sit through the process on a couple of cases or closings.

How to find business?  It would seem obvious that you would start locating lenders on vessels and vessel brokers.  You do not have to sell the whole abstract concept of maritime law or admiralty.  You limit your practice to protecting the investments of lenders and purchasers of vessels.  You might, when you can, promote yourself with a blog and on top boating sites.  One lawyer and law firm even operates as a yacht broker.  Becoming a certified yacht broker might be a nice adjunct to this line of work.  If nothing else it might introduce you to other brokers who may steer business your way.  You might want to look into the American Vessel Documentation Association and The First American Corporation's vessel title insurance program.

At least one title insurance agency covers vessels as well as real estate.

When yacht and boat sales drop, as they are likely doing in this economy, you can hopefully get the work of handling the recovery of these vessels.

The niche is worth your consideration.