§ 50–1541.14. Perfection of security interest.

(a) Except as otherwise provided in this section or § 50-1541.28, a security interest in a vessel may be perfected only by delivery to the Harbor Master of an application for a certificate of title that identifies the secured party and otherwise complies with § 50-1541.06. The security interest is perfected on the later of delivery to the Harbor Master of the application and the applicable fee or attachment of the security interest under § 28:9-203.

(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 Harbor Master is a security interest, the application sufficiently identifies the person as a secured party. Identification on the application for a certificate of title of a person as owner, lessor, consignor, or bailor is not by itself a factor in determining whether the person’s interest is a security interest.

(c) If the Harbor Master has created a certificate of title for a vessel, a security interest in the vessel may be perfected by delivery to the Harbor Master of an application, on a form the Harbor Master may require, to have the security interest added to the certificate of title. The application must be signed by an owner of the vessel or by the secured party and must 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 vessel; and

(4) If the Harbor Master has created a written certificate of title for the vessel, the certificate of title.

(d) A security interest perfected under subsection (c) of this section is perfected on the later of delivery to the Harbor Master of the application and all applicable fees or attachment of the security interest under § 28:9-203.

(e) On delivery of an application that complies with subsection (c) of this section and payment of all applicable fees, the Harbor Master shall create a new certificate of title pursuant to § 50-1541.07 and deliver the new certificate of title or a record evidencing an electronic certificate of title pursuant to § 50-1541.11(a). The Harbor Master shall maintain in the files of the Harbor Master the date and time of delivery of the application to the Harbor Master.

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

(g) This section shall not apply to a security interest:

(1) Created in a vessel by a person during any period in which the vessel 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 vessels;

(2) In a barge for which no application for a certificate of title has been delivered to the Harbor Master; or

(3) In a vessel before delivery if the vessel is under construction, or completed, pursuant to contract and for which no application for a certificate of title has been delivered to the Harbor Master.

(h) This subsection applies if a certificate of documentation for a documented vessel is deleted or canceled. If a security interest in the vessel was valid immediately before deletion or cancellation against a third party as a result of compliance with 46 U.S.C. § 31321, the security interest is and remains perfected until the earlier of 4 months after cancellation of the certificate of documentation or the time the security interest becomes perfected under this chapter.

(i) A security interest in a vessel arising under § 28:2-401, § 28:2-505, § 28:2-711(3), or § 28:2A-508(e) is perfected when it attaches but becomes unperfected when the debtor obtains possession of the vessel, unless before the debtor obtains possession the security interest is perfected pursuant to subsection (a) or (c) of this section.

(j) A security interest in a vessel as proceeds of other collateral is perfected to the extent provided in § 28:9-315.

(k) A security interest in a vessel perfected under the law of another jurisdiction is perfected to the extent provided in § 28:9-316(d).