Ship mortgage

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In a vessel mortgage , a shipowner lends a creditor (or pawns) an interest in a vessel as collateral for the loan. Similar to other types of mortgages, vessel mortgages are legally composed of three parts: mortgage loans, mortgage documents (deeds) and rights derived from a mortgage deed to a money lender. Mortgage vessels differ from other types of mortgages in three ways. First, some privileged claims may have a higher rating than a mortgage on a ship. Second, ships naturally move between jurisdictions. And third, a ship always faces the risk of partial or total damage at sea. The use of vessel mortgages emerged as a widely accepted practice in the shipping industry in the 19th century as a major financial source for shipowners.

Video Ship mortgage

The modern form of a legal mortgage

In the United Kingdom, the vessel mortgage practiced traces to the Merchant Shipping Act 1894, the Merchant Shipping Act 1988 and subsequent amendments to the 1988 Act. Paragraph 21 of Schedule 1 to the Shipping Act of Traders 1988 states that "a ship which is registered, or any part of the vessel, may be used as collateral for loan payments or other liability expenses, and on the production of instruments which create such security (referred to in this Law as a mortgage), the ship's port registration registrar shall record it in the list. "

In the Merchant Shipping Act 1894, it is provided that only registered vessels may be subject to official legal mortgages; Other mortgages associated with the vessel will apply as pure mortgages, which may appear on unfinished ships, foreign ships, and others.

Maps Ship mortgage

Registration of a legal mortgage

The registration of a vessel mortgage is very important to have a legal effect, although failure to register does not make the mortgage cancel: under the Merchant Shipping Act, every unregistered member can not enjoy whatever benefits are available.

Even with the protection clause to buyers in the Norwegian Sales Form 1993, "The seller guarantees that the Ship, at the time of delivery, is free of all charter, charging, mortgage and other maritime liens or other debts." For buyers, registering vessels with mortgages is essential to avoid future litigation after sale due to claims related to unregistered mortgages.

Protection against other mortgages

The most important benefit of registration for mortgageeers is gaining priority, with priority ranking solely determined by the date of registration. By giving "notice to the world", registered mortgages can be protected from all secured creditors then from mortgagor, who can seek further financing from other sources using the same ship as security.

In the UK, the 1993 Regulation of Shipping Regulations (Ship Registration) of 1993, the vessel's mortgage or part of a registered British ship is permitted to notify the intended interest and recorded by the Registrar. After then executed or registered, a registered mortgage will have priority over any other registered mortgage that may have been fully registered in the first place.

Priority rating

Registration confers a higher priority mortgage applicant above the following scenarios but is not limited to:

1. unregistered mortgages, regardless of their knowledge;
2. KPR which is then registered or unregistered; and
3. The additional advances made under a previously registered mortgage under which under the agreement is that the mortgage should include the present and future advances by the mortgagee.

However, a mortgagee does not have priority over the following scenarios but is not limited to:

1. any previously registered mortgage;
2. any claims relating to the vessel that has been captured at the time the mortgage enters;
3. any ownership lien of the ship repairman; and
4. Maritime lien, either before or after

Registration of mortgage in China

According to Article 20, Chapter IV of the Regulations of the People's Republic of China Regulating Ship Registration, both the lender and mortgagee are required to submit three main documents in advance:

1. written app signed by both parties;
2. Original Ship Ownership Certificate of Registration; and
3. boat mortgage contract

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Warranty stamp

As a basic form of mortgage, a reference to a guarantee deed containing detailed details must be included:

1. like time for payment of principal amount;
2. interest payable on the amount of capital lent;
3. payment methods;
4. the party responsible for insuring the vessel;
5. any restrictions that a mortgage can make in the manner in which the vessel will be used; and
6. the conditions when the default will be considered by the mortgagor, allowing the mortgage to have a return and sell the mortgaged security

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References

1. Hill, C. (2003), Maritime Law, 6th ed., Publishing Reference LLP, London.
2. Ho, Li & amp; Xu (2008), Transportation, Shipping and Aviation: Estimated shipments. LegalWeek.com. Available from: [1]
3. Public Sector Information Office, & amp; Merchant Shipping Act 1988 (c 12). Available from: [2]
4. Public Sector Information Office, & amp; Merchant Shipping Act 1894 (about 60). Available from: [3]
5. Public Sector Information Office, & amp ;, Shipping Merchant Regulations 1993. Available from: [4]
6. China Trade in the Service, Regulation of the People's Republic of China Regulating Ship Registration. Available from: [5]
7. Maritime Law Center, Norwegian Sales Forms. Available from: [6]

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External links

• Mortgage Crisis, Maritime Executive Magazine

Source of the article : Wikipedia