Buying Overseas: five things to consider along the way

There are all kinds of boats and all kinds of purchasers, and with cheap flights, google translate, and the reassurance of broadly similar commercial practices throughout Europe, there is no reason why it should not be relatively easy to buy a vessel overseas.  There is however a number of key issues which need to be addressed to make the transaction a pleasant and relatively risk free one.

Firstly, always try to buy from an established yacht broker with a proper office (preferably close to the vessel’s location) and if possible already an established member of the Mediterranean Yacht Brokers Association or otherwise enjoying a good reputation.  Check them out on the internet, look through the forums, do a google earth search, so that you can be absolutely confident that you know who and what you are dealing with.

Secondly, go and look at the vessel, visit the broker in his office, and try to meet or speak directly to the vessel’s owner to ascertain that the vessel is up for sale, that the broker you are dealing with is the appointed broker, not some chancer seeking to share commission with the proper broker or looking to receive buyer’s commission (it happens).  Satisfy yourself, even at this early stage, that the paperwork and the vessel appear ok, and the deal sounds plausible.

Thirdly, ask the broker to send you the draft contract and check that it is a standard acceptable form agreement which makes proper provision for both party’s rights and interests to be protected. In particular, if you need a survey and sea trial (which sensibly most people buying any vessel would insist upon) that the relevant clauses protecting your entitlement to reject the vessel in the event of unhappy outcomes are present.  Check to see if any deposit is required (10% being the norm) and where the money is to be held once it is paid.  What is going to happen to the deposit if the deal falls over for any reason?  Ask yourself if you are happy with those arrangements and you (or more realistically your spouse) will sleep well at night once the deposit has been paid.  If not, then do not pay the deposit until you have an agreement which satisfies your concerns.  Remember, there are plenty of boats out there, and plenty of sellers, and the deposit’s primary purpose is to protect the broker’s entitlement to receive commission once the sale goes through. 

Fourthly, assuming that you are sensibly choosing to have the vessel surveyed and trialled do not assume that the broker’s recommended surveyor or surveyors (they should recommend three) will be up to the job.  Speak to each of them to ascertain their experience, charges, and their insurance arrangements.  Unfortunately, with PI Insurance becoming increasingly prohibitive and there still being little requirement for professional training or accreditation, some surveyors cut costs by not renewing the insurance, or rely a little unhealthily upon selling broker’s recommendations. This can cause significant problems for the unwary.  Good surveyors will happily and openly discuss these issues and provide you with straight answers.  There are a lot of them about so again do your research and do not feel under any obligation to fall in with the broker’s needs or requirements.  Once you have got the survey and the sea trial results, be very mindful of the timescales for responding laid down in the contract, so you do not lose the opportunity to either pull out of the deal or negotiate works to the vessel or a reduction in the purchase price.  Speak to the surveyor and get professional opinion as to the precise scope of the works to be undertaken, the timescale, and a reputable contractor to do those works, and consider whether the surveyor needs to supervise or re-inspect before you accept the vessel.  If you go to negotiate the price down, then be prepared to put your surveyor on to the broker and let them conduct the negotiations if it gets sticky.

Fifthly, the devil is in the detail in the Ships Papers.  If it is a full MCA Part I vessel then so much the better, but you will still need to be very clear that the registered owner (be it individual or otherwise)  is selling the vessel, and that the chain of paperwork clearly establishes their right to do so.  You also need to check 101 other things including the warranty arrangements, VAT provenance (the subject of endless argument in itself) and the possibility of undisclosed mortgages, claims, liens and other issues.  This is such a complex area that, sensibly considered, few private purchasers would logically choose to leave this to chance, particularly having regard to the inescapable fact that the brokers act solely for the sellers and protect their interests (not the buyer). If in doubt, get expert legal assistance on this issue.

Finally, if you have done your homework, and you have satisfied yourself (using assistance where necessary) then buying abroad can be both enjoyable and give you real savings.  Unfortunately, it can also prove to be a nightmare, so if you do not have the time, or are risk averse, use a specialist firm of solicitors or yacht brokers who have the skill, experience, and insurance, to enable the transaction to proceed.

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