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  1. #1
    Join Date
    Dec 2018
    Posts
    1

    Default How to Remove a California State Tax Lien

    Looking for some advice/guidance from experts or others that may have experienced a similar circumstance. Some background on situation:

    3 friends purchased vessel together. Myself being 1 of the 3.
    Vessel is documented with the US Coast Guard
    Bought from individual (without use of Broker) that executed/signed Purchase Agreement and Bill of Sale of behalf of a corporation he is President of.
    Both documents stipulate vessel is sold free and clear of all liens, mortgages and other encumbrances of any kind.
    Liens filled by state of California Dept. of Tax and Fee Admin
    2 Liens: #1 $8900 #2 $500
    Liens are due to unpaid CA Sales Tax from previous sale.

    Timeline:

    Purchase Agreement Signed 3/21/2018
    Lien Search (Clear at time) 4/4/2018
    Bill of Sale (Date of Instrument 4/6/2018) (Date Filed 4/20/2018)
    Lien #1 (Date of Instrument 3/28/2018) (Date Filed 4/9/2018)
    Lien #2 (Date of Instrument 3/28/2018) (Date Filed 4/12/2018)

    Wondering if we have any recourse with Coast Guard for removal of liens because of timing and if so, where and how to file claim. Or same question pertaining to state of California...??? Small Claims may be an option too but we have the added complication of the previous owner of record being a corporation and also the amount is greater than the $5000 cap for Small Claims.

  2. #2
    Join Date
    Sep 2010
    Posts
    18,538

    Default Re: California State Tax Lien

    Documented vessels are NOT exempt from California tax. The USGS isn't going to get involved with tax liens. While an attestation by the seller that the boat is clear of encumbrances gives you a course of action against him, it doesn't mean such encumberances do not exist or are not enforceable. You should never rely on a seller's attestation on ANYTHING whether it be real estate or a vessel. A lien search is USELESS without some insurance policy to warrant it. The USCS NVDC doesn't guarantee the validity or not of liens filed or the absence os such filed with them.

    Your claim is against the person who sold you the encumbered boat.

  3. #3
    Join Date
    Oct 2014
    Posts
    6,790

    Default Re: California State Tax Lien

    Your problem is that the purchase agreement was signed on 3/21/18. It seems the seller's attestation was provided to you at that time. But on that date there were no liens on the boat, so the seller's attestation was accurate at that time. The liens were recorded on 4/9 and 4/12 respectively. Your bill of sale transferring the boat to yo was delivered on 4/6, and it's unclear when you actually recorded the title transfer, but it was likely after 4/6. Given that time line the liens were valid as they attached the boat while the sellers still owned it. So you can't get the liens removed. The sellers might not owe you anything either if their assurance that there were no liens was made before the liens were recorded. In that case, you might be stuck having to pay the liens to get clear title and might not have any recourse against the sellers. You'd have recourse against the sellers if (1) they knew or had reason to know at the time they delivered the attestation that there were liens filed or that were going to be filed or (2) the sellers actually warranted clear title. In any event, there isn't an action you can take to get the USCG to remove the liens unless the liens themselve were invalid.

  4. #4
    Join Date
    Sep 2010
    Posts
    18,538

    Default Re: California State Tax Lien

    I think USCS documentation is a race to record basis so it matters not when they are dated but when the were recorded. As a result of this (and any other race situation, such as we have in our state with real estate), you have someone (usually an agent) go to the recording agency and verify that the recorded information is still as you thought and then file your changes.

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