We receive many calls from marine contractors telling us they finished a project, the yacht owner was pleased with the work but were never fully paid. Unfortunately, this is the industry standard for the yacht refurbishing business. Luckily the law is on your side!
The Maritime Lien Act gives a lien against a vessel to:
- Canvas suppliers,
- Marble suppliers,
- Upholsterers, and
- Anyone else who supplies materials or labor to a vessel.
This lien is in the amount of all unpaid invoices for material and labor supplied to the vessel. The law also gives these contractors the unique ability to arrest the ship to foreclose on their lien.
When their ship is arrested the owner has the option of: (1) depositing money in the court for the amount of the unpaid invoices plus reasonably expected court costs and interest; or, (2) suffer a judicial sale of his vessel wherein the proceeds of the sale will be deposited in the court to secure the claim. This provides the contractor with security for his claim and avoids the hassle of having to track down the owner to collect a judgment. Arresting the vessel also causes the owner the inconvenience of not being able to use his yacht as well as the expense of depositing money to cover the lien amount. If the owner does not provide this security, he will lose his yacht. Often times, owners will pay the outstanding invoices at this time in exchange for the release of the yacht.
Should the owner still decide not to pay the monies owed, the court will decide the claim on its merits. In order to prevail under a Maritime Lien Act claim, the contractor must simply establish:
- “necessaries” (materials or labor) were provided;
- at the direction of the vessel’s owner or agent;
- to the vessel; and
- at a reasonable price. See, Windward Assocs. v. M/Y Esteral
Once these four elements are proven, the Court will execute judgment against the security and the contractor will finally collect the money owed.
If you are a contractor who is owed money for your work on a yacht or other type of vessel and would like to discuss your options further, please contact a Florida board certified maritime lawyer.