Pitfalls in yacht acquisition agreements – how to avoid troubles? 

Purchasing a yacht is an exciting event, but it can also be full of surprises, especially for those who are inexperienced in such transactions. Agreements are often complex, and misunderstanding them can lead to issues. In this article, we’ll discuss the most common pitfalls you may encounter and offer advice on how to avoid them. 

Choosing a yacht 

The most important step and starting point for the entire process is to clearly define your expectations for the yacht. However, that’s not all. A common mistake is the failure to accurately specify what exactly is being purchased and who – the buyer or the seller – is responsible for what. Over time, it may turn out that additional equipment was not included, and the price of the yacht must also account for inspections, engine startup, transport, etc. 

Remember! 

The agreement (or its annex) must clearly state exactly what is being purchased and in what condition. Include provisions specifying who will be responsible for each stage. Also, attach complete documentation regarding the yacht’s history, if available.

Terms of the agreement 

A key element is the clear specification of the terms of the agreement, including financial aspects such as deposits and payment deadlines. Unclear terms in this regard are another potential source of conflict in the future. 

Often, the price is listed in the agreement, but it’s not clearly stated whether additional amounts, such as taxes or other fees, will need to be added. It is also frequently unclear which day is the official payment due date. 

Remember! 

Specify in the agreement exactly how much you will pay and whether the price includes VAT or not. Make sure to include a clause stating that the payment date will be, for example, the day you submit the transfer order or the day the funds are credited to the seller’s account. 

Legal issues 

Verifying the legal status of the yacht, including ownership rights and current registration documents and permits, is extremely important. Improper documentation can lead to serious legal and financial problems. 

Things to watch out for 

When purchasing a yacht, pay attention to several key issues: 

• Technical condition: Conduct a thorough technical inspection of the yacht, preferably with the assistance of an experienced specialist. Check the condition of the engine, electrical systems, hydraulics, onboard equipment, as well as the hull and rigging.
• Service history: Request the documented service history of the yacht to ensure it has been regularly serviced and maintained.
• Sea trial: If possible, conduct a sea trial to assess the yacht’s performance on the water and check how its systems operate.
• Ownership rights: Ensure the seller has full rights to sell the yacht and that there are no outstanding payments or encumbrances.
• Documentation: Check the completeness and validity of the yacht’s documents, including registration certificates, permits to sail, and any other necessary paperwork.
• Financial terms: Carefully review the financial terms of the transaction, such as the price, payment method, and any additional costs.

Do not sign a yacht acquisition agreement without thoroughly analyzing its terms beforehand. Make sure that all essential aspects of the transaction are clearly defined and understood by both parties. 

It’s worth considering the services of an experienced lawyer specializing in yacht transactions, who can help you understand and protect your rights. 

Buying a yacht is a significant investment, so it’s crucial to approach it with full awareness and caution. Utilizing professional help and thoroughly understanding all aspects of the transaction can prevent many issues. Remember, the safety and satisfaction of your yacht purchase largely depend on your attention and diligence during the agreement phase.