(A) If an applicant for a watercraft title or outboard motor title is not able to produce a perfected chain of title from the last owner of record or from the manufacturer, the department may issue to the applicant a conditional title which reflects on the face of it that it is conditional and that it does not warrant ownership against the true owner. The conditional title may not be issued unless the department:

1. (1) determines that the watercraft or outboard motor has not been reported as stolen in this State as required by this chapter or in another state;
2. (2) determines that no active liens exist on the watercraft or outboard motor or that the existence of liens is unlikely; and
3. (3) determines that the last titled owner cannot be found or the probability of finding the owner is remote; or
4. (4) determines that the necessary paperwork to perfect the title has been lost, stolen, or destroyed and reasonably cannot be found or duplicated.

(B) The applicant shall cause to be published in a newspaper of general circulation in the county where the last titled owner of the watercraft or outboard motor is known to have lived a notice in the following form:

A. TO: (Name of last titled owner) and all persons claiming an interest in (description including make, model, year, horsepower, and hull identification or serial number if available). Please take notice that (Name of applicant) shall apply to the South Carolina Department of Natural Resources for a title to that certain (watercraft or outboard motor) described as follows: (Description including make, model, horsepower, year, and hull identification or serial number if available) no later than ten (10) days from the last publication of this notice. This is the (first, second, or third) of three notices to be published weekly for three weeks. If you wish to claim an interest in this (watercraft/outboard motor) you are advised to contact the South Carolina Department of Natural Resources immediately.

B. If there is no record of a previous titled owner or he cannot be determined the notice may be addressed to all persons claiming an interest in the watercraft or outboard motor and published in the county of the applicant's residence for the prescribed period.

C. Upon receipt of proof of publication (Certification from newspaper with copy of advertisement and dates) and having received no claims from interested parties upon determination of the department that the above conditions exist, the department may issue a conditional title to the watercraft or outboard motor upon receipt of payment of appropriate taxes, fees, and application.

D. The conditional nature of the title must be reflected clearly on the face of the title and upon any subsequent titles issued on the watercraft or outboard motor for seven years.

E. A person claiming an interest in the watercraft or outboard motor may bring an action within seven years to set the conditional title aside and for the return of the watercraft or outboard motor. Seven years after issuance of the conditional title it is incontestable and a new nonconditional title may be issued upon application and payment of the appropriate fee.