Buying / Selling a Yacht
In order to buy/sell a yacht, a detailed agreement called a Memorandum of Agreement (MOA) is normally drawn up and signed by both parties. Drafting the MOA can be quite challenging and both seller’s and buyer’s obligations and rights should be carefully interpreted.
Typically, 10% of the purchase price is paid straight away, with the balance only being paid once the yacht and the all-important documentation has been formally handed over. The two other key documents are the Bill of Sale, which formally records the transfer of legal title from buyer to seller, and the Protocol of Delivery & Acceptance, which sets out the exact time and date of the transfer.
Would advise buyers to check exactly what is being bought. This means having the yacht surveyed, out of the water, by a qualified and insured surveyor. If satisfactory, this should be followed by a sea trial. The MOA needs to describe the parties’ rights and duties when issues are raised, including your right to pull out altogether.
The MOA should list all the equipment which is to be included in the sale: not just safety and navigation equipment but linen, crockery, and any works of art. Yachts can also carry vast quantities of fuel and engine spares, which must be expressly included or excluded.
The MOA should cover other matters such as the documentation needed to enable a smooth transfer of legal title.
Although we always suggest using one of the standard forms, MOAs presented may vary in terms and interpretations and therefore should be thoroughly checked and reviewed by professionals.
Not intending to replace your legal advisors, we will be willing to work in team with them to your interests’ protection. If you do not have your own legal advisors, we can introduce you to one.