(1) The department shall suspend or revoke a certificate of title, certificate of number, or registration for a boat if it finds any of the following:
(a) The certificate of title, certificate of number, or registration was fraudulently procured, erroneously issued, or prohibited by law.
(b) The boat has been scrapped, dismantled, or destroyed. NAVIGABLE WATERS, HARBORS AND NAVIGATION 30.6265 (c) A transfer of title, certificate of number, or registration is set aside by a court by order or judgment.
(2) Suspension or revocation of a certificate of title does not, in itself, affect the validity of a security interest noted on it.
(3) When the department suspends or revokes a certificate of title, certificate of number, or registration, the owner or person in possession of the certificate or registration shall, within 5 days after receiving notice of the suspension or revocation, mail or deliver the certificate or registration to the department.
(4) The department may seize and impound a certificate of title, certificate of number, or registration that is suspended or revoked.