                                 CODE OF VIRGINIA

PERFECTION OF SECURITY INTEREST (§ 29.1-733.15)

A. Except as otherwise provided in this section or &#xA7; 29.1-733.29, a
security interest in a watercraft shall be perfected only by delivery to the
Department of an application for a certificate of title that identifies the
secured party and otherwise complies with &#xA7; 29.1-733.7. The security
interest is perfected on the later of delivery to the Department of the
application and the applicable fee or attachment of the security interest under
&#xA7; 8.9A-203.

B. If the interest of a person named as owner, lessor, consignor, or bailor in
an application for a certificate of title delivered to the Department is a
security interest, the application sufficiently identifies the person as a
secured party. Identification on the application for a certificate of a person
as owner, lessor, consignor, or bailor is not by itself a factor in determining
whether the person&#8217;s interest is a security interest.

C. If the Department has created a certificate of title for a watercraft, a
security interest in the watercraft shall be perfected by delivery to the
Department of an application, on a form the Department shall require, to have
the security interest added to the certificate. The application shall be signed
by an owner of the watercraft or by the secured party and shall include:

   1. The name of the owner of record;

   2. The name and mailing address of the secured party;

   3. The hull identification number for the watercraft; and

   4. If the Department has created a written certificate of title for the
   watercraft, the certificate.

D. A security interest perfected under subsection C is perfected on the later of
delivery to the Department of the application and all applicable fees or
attachment of the security interest under &#xA7; 8.9A-203.

E. On delivery of an application that complies with subsection C and payment of
all applicable fees, the Department shall create a new certificate of title
pursuant to &#xA7; 29.1-733.8 and deliver the new certificate or a record
evidencing an electronic certificate pursuant to subsection A of &#xA7;
29.1-733.12. The Department shall maintain in the files of the Department the
date and time of delivery of the application to the Department.

F. If a secured party assigns a perfected security interest in a watercraft, the
receipt by the Department of a statement providing the name of the assignee as
secured party is not required to continue the perfected status of the security
interest against creditors of and transferees from the original debtor. A
purchaser of a watercraft subject to a security interest that obtains a release
from the secured party indicated in the files of the Department or on the
certificate takes free of the security interest and of the rights of a
transferee unless the transfer is indicated in the files of the Department or on
the certificate.

G. This section does not apply to a security interest:

   1. In a watercraft by a person during any period in which the watercraft is
   inventory held for sale or lease by the person or is leased by the person as
   lessor if the person is in the business of selling watercraft;

   2. In a barge for which no application for a certificate of title has been
   delivered to the Department; or

   3. In a watercraft before delivery if the watercraft is under construction, or
   completed, pursuant to contract and for which no application for a certificate
   has been delivered to the Department.

H. This subsection applies if a certificate of documentation for a documented
vessel is deleted or canceled. If a security interest in the watercraft was
valid immediately before deletion or cancellation against a third party as a
result of compliance with 46 U.S.C. &#xA7; 31321, the security interest is and
remains perfected until the earlier of four months after cancellation of the
certificate or the time the security interest becomes perfected under this
article.

I. A security interest in a watercraft arising under &#xA7; 8.2-401 or 8.2-505,
subsection (3) of &#xA7; 8.2-711, or subsection (5) of &#xA7; 8.2A-508 is
perfected when it attaches but becomes unperfected when the debtor obtains
possession of the watercraft, unless before the debtor obtains possession the
security interest is perfected pursuant to subsection A or C.

J. A security interest in a watercraft as proceeds of other collateral is
perfected to the extent provided in &#xA7; 8.9A-315.

K. A security interest in a watercraft perfected under the law of another
jurisdiction is perfected to the extent provided in subsection (d) of &#xA7;
8.9A-316.

HISTORY: 2013, c. 787.