The purchase, sale, transfer or financing of a yacht takes place within the registration system established by the Maritime Code: the status of the vessel, the right to fly the flag and any mortgage encumbering the vessel are reflected in the State Register of Ships of Georgia. This page explains the rules that parties to a yacht transaction should know — from the forms of registration to the maritime mortgage and its entry in the register.
The Concept of a Small Vessel and the Basis of Registration
The Maritime Code divides vessels by size: a large vessel is a floating craft whose register ton is 100 tons or more, while a small vessel is a floating craft whose register ton is less than 100 tons. Most yachts fall precisely within the small-vessel regime, and this determines the form of their certificates and the renewal procedure.
The right to use the state flag of Georgia, that is, the right of navigation, belongs to a vessel from the moment of its registration in the register, and with respect to a vessel flying the Georgian flag all forms of ownership operate. The register includes vessels owned by the state or by a Georgian natural or legal person, as well as a vessel owned by a foreign shipowner who has an authorized representative in Georgia. Georgia does not recognize parallel registration — a vessel registered in a foreign register may be entered in the Georgian register only after the suspension, termination or deletion of its registration there.
Forms of Registration and Certificates
The registration of a vessel may be temporary, time-limited or permanent, with or without the right of navigation. A temporary registration certificate may be issued until permanent or time-limited registration, for a period of no more than 6 months; this period may be extended to 1 year, and after the expiry of the one-year period — in a special case, upon the written application of the shipowner and with the consent of the chief registrar — by a further period of no more than 1 year. A temporary registration certificate gives rise to the same rights and obligations as a permanent one.
Registration is confirmed by a certificate: the registration of a small or size-reduced vessel is permanent and is renewed annually, while the certificate of a large vessel is subject to annual verification. A bareboat-charter registration is established by a time-limited certificate whose term does not exceed 2 calendar years and which, with the consent of the underlying flag state, may be extended, each extension not exceeding 2 calendar years. A vessel is given a name by the owner, and the name may be changed at the request of the shipowner.
Structuring the Transaction and the Change of Owner
The registration and the register are maintained by the Agency, which issues the relevant certificates and approves the rules for the registration of vessels, the keeping of the register and the recording of maritime mortgages. In the sale of a yacht this means that the change of owner is reflected precisely in this system: a contract between seller and buyer, without passage through the register, does not produce its full effect in relations with third parties. Therefore, the preparation of the transaction must be accompanied both by the documentation of the transfer of ownership and by a verification of the register data — the form of registration, its term and the recorded rights.
The Maritime Mortgage in Financing
The typical instrument for financing a yacht is the maritime mortgage. A mortgage contract must indicate: the names and addresses of the parties; the essence of the claims secured by the pledge; the form of the mortgage; the term for the performance of the obligation; the valuation of the vessel and its location; the registration, transfer and amendment of the mortgage; the sequence of registered mortgages; and any other condition agreed by the parties.
A mortgage contract must be duly notarized and must necessarily pass through the State Register of Ships — an entry to that effect is made in the certificate of ownership of the vessel. For the registration, the mortgagor submits the original of the contract and a notarized copy; the Agency provides an extract from the register to the mortgagor and, on request, to the mortgagee and other interested persons. The registration of the mortgage and the issuance of the extract are subject to a fee.
Two legal boundaries are also important for the parties: a mortgage does not mean the sale of the vessel to the mortgagee, and the mortgagee cannot be deemed a person who loses ownership of the mortgaged vessel. Moreover, if after the registration of the mortgage the mortgagor goes bankrupt, the obligations of the registered pledge are considered unfulfilled — a circumstance that affects both the position of the mortgagee and that of a seller.
Frequently Asked Questions
Which vessel is small?
A floating craft whose register ton is less than 100 tons.
When does the right to fly the flag arise?
From the moment of registration in the register; all forms of ownership operate with respect to a vessel flying the Georgian flag.
For what term is a temporary certificate issued?
For no more than 6 months, extendable to 1 year, and after that — in a special case — by a further period of no more than 1 year.
How is a mortgage reflected?
A notarized contract passes through the State Register of Ships and an entry is made in the vessel's certificate of ownership.
How We Help on Legal.ge
The lawyers of Legal.ge provide full support for yacht transactions: we verify the vessel in the register, prepare contracts of sale and transfer, manage the registration procedure and participate in the conclusion and registration of a maritime mortgage. Contact us for a consultation — we will assess your transaction and plan every registration step.