California Yacht And Ship Licensing Practice Exam

After notice of sale, what action does the department take?

Transfers title to the purchaser Marks its records and notifies persons with proprietary interest that title will not transfer until lien is satisfied Delays the sale for 60 days Void the lien

Correct Answer:

Marks its records and notifies persons with proprietary interest that title will not transfer until lien is satisfied

Explanation:

When there’s a notice of sale, the department updates its records and informs anyone with a proprietary interest that the title will not transfer until the lien is satisfied. This protects the security interests tied to the vessel and ensures that a buyer does not obtain clear title while a lien remains unpaid. It also gives lienholders notice so they can act to protect their lien. The title transfer to the purchaser only occurs after the lien is resolved; transfers aren’t made while the lien exists, and the lien isn’t voided by the sale.

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