In my practice, I often handle the sale of vessels. The first question I ask a seller is, “Is the boat Documented?”
If the answer is “No, it just has a Florida title,” the transaction immediately becomes more dangerous for the buyer. Why? because state titles are notoriously easy to forge or “wash” of liens. A USCG Certificate of Documentation (COD) is federal proof of ownership, backed by the strictest recording system in the nation.
If you have just imported a boat or are buying a used cruiser, here is why you should skip the DMV and go straight to the National Vessel Documentation Center (NVDC).
1. The “Preferred Ship Mortgage” (Why Banks Care)
If you plan to finance your boat, you likely have no choice. Banks almost universally require USCG Documentation.
Under federal maritime law, a lender can file a Preferred Ship Mortgage against a documented vessel. This gives the bank a “priority lien” that supersedes almost all other claims (except for crew wages and certain salvage claims).
The Legal Advantage: If a boat is only state-registered, a lender has a much harder time repossessing it across state lines or enforcing their lien if you sell the boat to someone in another state. The Preferred Ship Mortgage tracks the hull everywhere in the world.
2. Clear Chain of Title (Avoiding Stolen Boats)
State titling systems are disconnected. It is shockingly easy to steal a boat in Georgia, tow it to Alabama, and get a clean Alabama title because the two DMV systems don’t talk to each other.
USCG Documentation creates a federal abstract of title. This is a complete history of the vessel from the day it was built. Before you buy, we can pull this abstract (for about $25) and see every owner, every lien, and every mortgage ever recorded.
If you buy a state-titled boat, you are often guessing. If you buy a Documented boat, you know.
3. International Travel: The “Flag” Issue
Are you planning to sail to the Bahamas, Mexico, or Canada? State registration papers are often rejected by foreign customs officials.
A USCG Certificate of Documentation serves as your vessel’s Passport. It grants you the right to fly the U.S. flag and grants you the protection of the U.S. government while in international waters. A state registration sticker technically does not grant “nationality” to a vessel under international law.
The Cost Reality: $26/Year
Many owners avoid Documentation because they think it’s expensive. It’s not.
While the initial application costs around $133, the annual renewal fee is only $26. You can even pay for 5 years upfront ($130) to avoid the paperwork hassle.
Warning: Avoid “Third-Party” Renewal Sites. There are private websites that look like the official Coast Guard site but charge $75 or $100 for a simple $26 renewal. Always use the official USCG NVDC website ending in .mil.
Summary: Which Do You Need?
| Feature | State Registration | USCG Documentation |
|---|---|---|
| Jurisdiction | Valid only in that State | Valid Worldwide |
| Lender Security | Weak (UCC filing) | Strong (Preferred Mortgage) |
| International Use | Difficult / Rejected | Essential (Passport) |
| Cost (Renewal) | Varies ($20 – $200) | $26 / Year |
Disclaimer: This article is for informational purposes only. Certain states may still require you to pay registration fees or taxes even if your vessel is federally documented. Consult with a maritime attorney to ensure full compliance in your home port.