Rules for operation of a vessel by a dealer, manufacturer

By: David Weil, Esq.

QuestionI am working with a partner to market a line of new boats that we are manufacturing in the United States. I recently took delivery of a “demo” boat here in California, and we are using the boat as a platform to introduce potential customers to our boats. We did not want to title the boat while we are offering the boat for sale, so we obtained a manufacturer’s registration number from the California DMV and we display the number on a portable registration board mounted on the bow. I thought I was following the rules perfectly but we were recently boarded by a harbor patrol officer during a weekend cruise, and we were cited for operating an unregistered vessel.  He told us that the manufacturer’s number was not appropriate for our use of the boat but he did not provide any details. What did I do wrong? 

 

Answer

Our reader followed most of the vessel registration rules which relate to the operation of a vessel by a dealer or manufacturer, but he seems to have taken a few shortcuts.

 A vessel dealer or manufacturer may obtain a special registration number for demonstrating or testing a vessel held in inventory which is not currently registered. The rules are spelled out in the California Code of Regulations, Title 13 sections 190.00(b), 190.06, and 190.08, which collectively allow for a manufacturer to have a special registration number for use on a boat, similar to a “manufacturer’s plate” on a car. This information is further explained in a DMV publication that is issued to authorized DMV agents (in-house employees at boat dealers who are trained in DMV procedure). Chapters 1 & 2 of the “Agent’s Handbook for Registration of Undocumented Vessels” discuss manufacturer numbers in sections 1.070 and 2.030.

Section 190.06 defines a “boat manufacturer” as “a person who is engaged wholly or in part in the business of building or assembling vessels who subsequently offers these vessels for sale.” Section 190.00(b) requires vessels that are used by a manufacturer or by a dealer for testing or demonstrating shall have their registration number painted on or attached to removable plates that are temporarily attached to each side of the vessel. This is similar to the process used by car dealers, and as such the temporary number boards are often referred to as “dealer plates.”

On the surface our reader seems to be following the rules. He is an authorized representative of a boat manufacturer and the boat in question is used for introducing customers to the brand of boats, which would of course involve testing and demonstration.

Our reader’s conflict with the harbor patrol probably relates to the specific use of the boat at the time he was cited. He tells us that he was “on a weekend cruise,” which implies that he was using the boat for personal recreational purposes rather than as a demonstration boat for potential customers. Section 190.08(c) limits the use of these special numbers. It provides that “dealer or manufacturer numbers shall only be temporarily attached to the vessel during demonstration or test periods and are valid for that period of demonstration or test only.” In other words, these numbers should be used only when a dealer or manufacturer is taking a customer for a test drive. The boat cannot be registered under a manufacturer or dealer number during a family trip to Catalina.

There may be some flexibility in evaluating whether the operation of a boat during a particular voyage falls within the general definition of a “demonstration or test,” but our reader’s creativity seems to have fallen short at the time that he was boarded by the harbor patrol. Be sure to contact a qualified attorney for advice prior to leaving the dock if you are in a similar circumstance.

 David Weil is licensed to practice law in the state of California and, as such, some of the information provided in this column may not be applicable in a jurisdiction outside of California. Please note also that no two legal situations are alike, and it is impossible to provide accurate legal advice without knowing all the facts of a particular situation. Therefore, the information provided in this column should not be regarded as individual legal advice, and readers should not act upon this information without seeking the opinion of an attorney in their home state.

 David Weil is the managing attorney at Weil & Associates (weilmaritime.com) in Long Beach. He is an adjunct professor of Admiralty Law at Loyola University Law School, is a member of the Maritime Law Association of the United States and is former legal counsel to the California Yacht Brokers Association. He is also one of a small group of attorneys to be certified as an Admiralty and Maritime Law Specialist by the State Bar of California. If you have a maritime law question for Weil, he can be contacted at (562) 438-8149 or at dweil@weilmaritime.com.

 

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