If i bought a boat in good faith but have now found out thatthere is a lien on it, what do we do?

My husband purchased a bass boat from a private individual without a title 2 1/2 years ago, in good faith.The seller swore it was paid in full in cash, but did not title to avoid paying taxes. We attempted to title the boat ourselves, and discovered it has a lien on it. The seller is not attempting to correct the problem of course, and states the finance company has been by looking for the boat. We did obtain a notarized bill of sale from the seller, however it does state “no title”. I feel his behavior was at the least fraudulent. What rights do we have at this point?

Asked on August 23, 2011 Virginia

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

In this country whenever a person sells an item be it a car, real property or a boat, he or she is obligated to disclose all known problems concerning the item being sold to the prospective buyer that could materially affect the buyer's desire to buy the item or pay the price agreed upon before the sale is consummated. The failure of a seller to disclose a known problem to a buyer before close is a type of a fraud known as "concealment".

Additionally, in this country when an item is being sold, the law implies that absent any disclosure to the contrary, the item being sold is sold "free and clear" of all encumbrances and liens.

In your situation, it seems as though the prior owner deceived you in what you paid for the boat by not advising you before the sale of the lien. You have a basis for a legal action against him to rescind (cancel) the purchase or for damages.

I suggest that you consult with an attorney on the subject.

Good luck.


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