Maritime Liens and Mortgages
Copyright © 2005 Weil & Associates and David
The cornerstone of a claim against a vessel owner is
the maritime lien. A maritime lien is quite different
from its familiar land-locked equivalent, and as pointed
out by a leading admiralty law treatise, "The beginning
of wisdom in the law of maritime liens is that maritime
liens and land liens have little in common. A lien is
a lien is a lien, but a maritime lien is not."
Maritime liens may be as troublesome to attorneys as
they are to boat owners and creditors, so it is important
to retain an attorney with experience in enforcing and
defending maritime liens and mortgages. The formation,
recording, priority, and enforcement of these liens are
quite different than for liens that arise under the U.C.C.
or other state law.
The characterization of a claim against a vessel as
a "maritime lien" is critical to the creditor's
claim. The priority of any claim against the vessel is
an important consideration, since at the time of foreclosure
the value of the claims may exceed the value of the vessel.
Maritime liens have a unique set of priority rules that
are used when comparing one lien to another, but in any
case, all maritime liens have priority over all non-maritime
liens. Characterization of a claim as a maritime lien
also allows a creditor to use a special foreclosure process,
where a Federal Judge issues an Order which directs a
Federal Marshal to seize the vessel, without a hearing and
before judgment. This "surprise attack" on
the vessel allows a creditor to secure its claim before
the boat escapes foreclosure by sailing away.