Yacht Buyers Guide

Buying a brokerage boat can sometimes be more complicated than a property transaction, so we have put together this short yacht buyers guide to help give you a clearer idea of the process and the potential stages involved.

When purchasing a used yacht it is important that the legal and financial processes are handled correctly.
ABYA Yacht Brokers are professionally qualified and as a requirement of membership must also carry Professional Indemnity Insurance, operate specifically designated Client Accounts and follow the ABYA Code of Practice.

Unlike a property transaction where an agent will market the property and then hand over to conveyancing solicitors after acceptance of an offer, the ABYA Yacht Broker continues with the conveyancing until completion.

The Yacht Broker will ensure the distribution of final funds are handled correctly and that the yacht’s title history, record of mortgages (if part 1 registered) and RCD and VAT status evidence have been requested, as well as administering the sale and purchase contracts and legal transfer of title.

Through ABYA member brokers the purchase is made using an ABYA Sale & Purchase Agreement. Buying a used yacht this way can be less stressful than the current English system of property buying, as everything is agreed in writing at the beginning and once an offer is accepted and a deposit is paid, the yacht is then essentially off the market. At that point, no other offers can be accepted whilst the agreement is in place.

An unconditional sale means the yacht is sold “as is, where is” without any other inspection other than the buyer’s own inspection. A conditional sale usually means the buyer will commission an independent surveyor to survey the yacht prior to purchase.

The usual sequence of events for a conditional sale is set out below:

• The yacht is offered for sale and an offer is received and accepted “subject to survey”.
• The seller and buyer enter into an agreement drawn up by the yacht broker. A 10% deposit is taken and held in the broker’s independent client account. The deposit protects the seller if the yacht is damaged during the survey, or if any associated lift out or yard bills are not settled by the buyer. It also now gives the seller good reason to accept no further offers whilst the agreement is in place.
• The buyer’s interest is protected as the seller is now agreeing to sell to only that buyer at an agreed price and within an agreed time frame. The seller cannot change his or her mind or sell to a higher bidder whilst the buyer is spending money on a survey and the agreement is in place.
• As we are dealing with the sale of unwarranted second-hand goods between two private individuals, having a survey gives the buyer professional independent knowledge of what they are buying.
• It is also possible to have an optional seatrial clause in the agreement.
• The agreement allows the buyer to re-negotiate the price or have the deposit refunded, if as a result of the survey findings they consider the yacht defective, as long as a full copy of the survey is provided to the broker/seller.
• In the unlikely event of an agreement not being reached within 7 days of notification of any such defects, the contract may be automatically rescinded and the buyer’s deposit refunded. The boat is then free to be re-marketed.
• However, it is important to remember that a used yacht will not survey like a brand new one. The survey will almost certainly have a sometimes relatively long list of recommendations for repairs and upgrades that are non-structural or safety-related and form part of the ongoing maintenance of a used yacht, rather than a basis for re-negotiation. Your surveyor will advise.
• The buyer pays for the survey and any associated lift or yard costs etc. and the seller may no longer use the yacht until the agreement is completed.
• After the survey, the sale moves to the completion stage.
• Once the sale is agreed, the balance payment is made to the yacht broker’s client account.
• On agreement of sale and receipt of funds to the protected client account, the yacht broker executes a Bill of Sale in the name of the new owner, then collates the ship’s papers and title documents to hand over with the newly executed Bill of Sale, whilst simultaneously transferring the funds to the vendor.

It all works very well for both parties. The seller knows they have a committed buyer and financial protection. The buyer has time to find out exactly what they are buying and the knowledge that any money spent on surveys will not be wasted by the yacht being sold elsewhere during the process. There is a clear written framework, with a professional yacht broker as a third party to administer it, and a safe method of distributing the funds.

Although ultimately it is for buyers to satisfy themselves of the Title History and VAT and RCD status of a used vessel, John Rodriguez Yachts will request details and paperwork for all listed yachts with regard to VAT status, RCD status and Title History and present these findings as a matter of course to a prospective purchaser. For British Part 1 registered vessels, John Rodriguez Yachts will also obtain a Transcript of Registry from the register.

The ABYA Code of practice requires that all deposits and final payments are processed through a dedicated Client Account solely for this purpose. The John Rodriguez Yachts Client Account conforms to this requirement and is written in trust at one of the UK’s leading high street banks.

When transacting through client accounts to vendor and purchaser accounts, suitable anti money laundering identity should always be obtained and a two-step cross check process should be in place. John Rodriguez Yachts will never ask clients to change bank account details via email or text.

It is a requirement that all ABYA brokers carry Professional Indemnity Insurance. John Rodriguez Yachts is fully insured.

Our full list of yachts for sale can be found here.

Information on selling your yacht can be found here.