Deposits: remember to check the small print

10% deposits are continuing to be demanded as the norm on most transactions, and few purchasers appear to be looking carefully at the wording of the purchase contract to ascertain who exactly they are paying the money to, where it is being held, and in what circumstances it is capable of being forfeited or refunded. 

There are many seemingly impressive yacht brokerage websites that give the impression of a substantive business, when in truth the broker exists in nothing more than a virtual world, with no resources, assets and little regulation.

This is an extremely risky area, and we have been involved in at a least one case where the deposit was taken without authority, and others where the conditions attached to the deposit have made it virtually impossible for the buyers to withdraw from the transaction notwithstanding that the vessel has proved on survey to be unsatisfactory, or has poor title or VAT issues. 

If deposits are to be paid, sensibly the person paying it needs to know exactly what they are getting themselves into.  Stakeholders and a clear intelligible contract are key, or better still; the abandonment of the deposit is in many cases an entirely sensible commercial alternative.


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