306.400. Liens and encumbrances--valid, perfected, when, how, future advances--boats and motors subject to, when, how determined--revenue to establish security procedure, electronic notices, rulemakin
Liens and encumbrances--valid, perfected, when, how, futureadvances--boats and motors subject to, when, how determined--revenueto establish security procedure, electronic notices, rulemakingauthority.
306.400. 1. As used in sections 306.400 to 306.440, the terms"motorboat", "vessel", and "watercraft" shall have the same meanings giventhem in section 306.010, and the term "outboard motor" shall includeoutboard motors governed by section 306.530.
2. Unless excepted by section 306.425, a lien or encumbrance on anoutboard motor, motorboat, vessel, or watercraft shall not be valid againstsubsequent transferees or lienholders of the outboard motor, motorboat,vessel or watercraft, who took without knowledge of the lien or encumbranceunless the lien or encumbrance is perfected as provided in sections 306.400to 306.430.
3. A lien or encumbrance on an outboard motor, motorboat, vessel orwatercraft is perfected by the delivery to the director of revenue of anotice of lien in a format as prescribed by the director. Such lien orencumbrance shall be perfected as of the time of its creation if thedelivery of the items required in this subsection to the director ofrevenue is completed within thirty days thereafter, otherwise such lien orencumbrance shall be perfected as of the time of the delivery. A notice oflien shall contain the name and address of the owner of the outboard motor,motorboat, vessel or watercraft and the secured party, a description of theoutboard motor, motorboat, vessel or watercraft motor, including anyidentification number, and such other information as the department ofrevenue may prescribe. A notice of lien substantially complying with therequirements of this section is effective even though it contains minorerrors which are not seriously misleading. Provided the lienholder submitscomplete and legible documents, the director of revenue shall mailconfirmation or electronically confirm receipt of each notice of lien tothe lienholder as soon as possible, but no later than fifteen business daysafter the filing of the notice of lien.
4. Liens may secure future advances. The future advances may beevidenced by one or more notes or other documents evidencing indebtednessand shall not be required to be executed or delivered prior to the date ofthe future advance lien securing them. The fact that a lien may securefuture advances shall be clearly stated on the security agreement and notedas "subject to future advances" in the second lienholder's portion of thenotice of lien. To secure future advances when an existing lien on anoutboard motor, motorboat, vessel or watercraft does not secure futureadvances, the lienholder shall file a notice of lien reflecting the lien tosecure future advances. A lien to secure future advances is perfected inthe same time and manner as any other lien, except as follows. Proof ofthe lien for future advances is maintained by the department of revenue;however, there shall be additional proof of such lien when the notice oflien reflects such lien for future advances, is receipted for by thedepartment of revenue, and returned to the lienholder.
5. Whether an outboard motor, motorboat, vessel, or watercraft issubject to a lien or encumbrance shall be determined by the laws of thejurisdiction where the outboard motor, motorboat, vessel, or watercraft waswhen the lien or encumbrance attached, subject to the following:
(1) If the parties understood at the time the lien or encumbrancesattached that the outboard motor, motorboat, vessel, or watercraft would bekept in this state and it is brought into this state within thirty daysthereafter for purposes other than transportation through this state, thevalidity and effect of the lien or encumbrance in this state shall bedetermined by the laws of this state;
(2) If the lien or encumbrance was perfected pursuant to the laws ofthe jurisdiction where the outboard motor, motorboat, vessel, or watercraftwas when the lien or encumbrance attached, the following rules apply:
(a) If the name of the lienholder is shown on an existing certificateof title or ownership issued by that jurisdiction, his or her lien orencumbrance continues perfected in this state;
(b) If the name of the lienholder is not shown on an existingcertificate of title or ownership issued by the jurisdiction, the lien orencumbrance continues perfected in this state for three months after thefirst certificate of title of the outboard motor, motorboat, vessel, orwatercraft is issued in this state, and also thereafter if, within thethree-month period, it is perfected in this state. The lien or encumbrancemay also be perfected in this state after the expiration of the three-monthperiod, in which case perfection dates from the time of perfection in thisstate;
(3) If the lien or encumbrance was not perfected pursuant to the lawsof the jurisdiction where the outboard motor, motorboat, vessel, orwatercraft was when the lien or encumbrance attached, it may be perfectedin this state, in which case perfection dates from the time of perfectionin this state;
(4) A lien or encumbrance may be perfected pursuant to paragraph (b)of subdivision (2) or subdivision (3) of this subsection in the same manneras provided in subsection 3 of this section.
6. The director of revenue shall by rules and regulations establish asecurity procedure to verify that an electronic notice or lien or notice ofsatisfaction of a lien on an outboard motor, motorboat, vessel orwatercraft given pursuant to sections 306.400 to 306.440 is that of thelienholder, to verify that an electronic notice of confirmation ofownership and perfection of a lien given pursuant to section 306.410 isthat of the director of revenue and to detect error in the transmission orthe content of any such notice. Such a security procedure may require theuse of algorithms or other codes, identifying words or numbers, encryption,callback procedures or similar security devices. Comparison of a signatureon a communication with an authorized specimen signature shall not byitself constitute a security procedure.
(L. 1985 H.B. 280, et al. § 301.700, A.L. 1999 S.B. 19, A.L. 2000 S.B. 896, A.L. 2002 H.B. 2008 merged with S.B. 895)Effective 8-28-02 (H.B. 2008)
7-01-03 (S.B. 895)