§ 187.310 Title brand.

(a) Unless paragraph (c) of this section applies, at or before the time the owner of record transfers an ownership interest in a hull-damaged vessel that is covered by a certificate of title created by the office, if the damage occurred while that person was an owner of the vessel and the person has notice of the damage at the time of the transfer, the owner must—

(1) Deliver to the office an application for a new certificate that complies with § 187.307 of this part and includes the title brand designation “Hull Damaged”; or

(2) Indicate on the certificate in the place designated for that purpose that the vessel is hull damaged and deliver the certificate to the transferee.

(b) Not later than 20 days after delivery to the office of the application under paragraph (a)(1) of this section or the certificate of title under paragraph (a)(2) of this section, the office must create a new certificate that indicates that the vessel is branded “Hull Damaged”.

(c) Before an insurer transfers an ownership interest in a hull-damaged vessel that is covered by a certificate of title created by the office, the insurer must deliver to the office an application for a new certificate that complies with § 187.306 and includes the title brand designation “Hull Damaged”. Not later than 20 days after delivery of the application to the office, the office must create a new certificate that indicates that the vessel is branded “Hull Damaged”.

(d) An owner of record who fails to comply with paragraph (a) of this section, a person who solicits or colludes in a failure by an owner of record to comply with paragraph (a) of this section, or an insurer that fails to comply with paragraph (c) of this section is subject to penalty as prescribed by state law.