Mortgage Recordation

Instrument Recording

The RMI Maritime Act (the “Act”) incorporates a range of provisions for the recordation of security-related instruments and documents of title. Recordation gives notice to creditors, purchasers, suppliers, and other parties with an interest in such transactions, and furnishes an internationally enforceable structure for the protection of those legal rights recorded with respect to an RMI vessel. Preferred status, accorded to a mortgage or Financing Charter under Chapter 3 (§§302-321) of the Act, gives priority to the lender’s mortgage or Financing Charter lien over certain other claimants.

The Act, in harmony with international conventions, provides for the maintenance of a public register at which those documents specified in §§107, 302, 306, 307, and 315 of the Act, may be recorded. As provided in the Act, such recordation’s may be made at any regional office. Documents that may be recorded include: Bills of Sale (§ 306); Mortgages (§ 307); Financing Charters (§ 302A); Satisfactions, Releases or Discharges of Mortgages (§ 315); Assignments, and other instruments relating to mortgages on RMI vessels (§§ 107 and 302).

The Act is designed to facilitate the recordation and enforcement of credit facilities that embody modern asset-based financing techniques. An RMI preferred mortgage or Financing Charter may secure: sale and lease transactions, contingent and future obligations (§ 309); the Japanese “ne-teito” type of “floating mortgage” facility (§ 309(2)); advances and repayments; guarantees; and multiple types of collateralization incidental to the diversified ownership of more than one vessel.