YACHT ACQUISITION PROCEDURE
Letter of Intent (LOI)
After determining and choosing a yacht, it is worth immediately signing aLetter Of Intent, which stipulates the terms with the seller of the main agreement, such as the price of the possible transaction, the terms that are planned to conclude a standard agreement (Memorandum of Agreement), as well as the proposed conduct surveyor check (including lifting for inspection of the underwater part of the hull and rudder group) and closing the deal. From a legal point of view, the Letter of Intent is informal, and only lays down a certain conceptual base in the future transaction.
Memorandum of Agreement (MOA)
The formal agreement, which regulates in detail the entire course of the transaction, is the Memorandum of Agreement (MOA) – the Yacht Sale and Purchase Agreement. We use the standard euro version of MYBA (an international organization of professional participants in the yachting market). This is a form of an agreement with a standard content, where they fill in their details, the amount and terms of the transaction, as well as special conditions (mutual agreements differ from the standard provisions of the agreement). List of documents, specification and list of yacht deliveries, as well as any other conditions drawn up in separate attachments (Appendix). After signing by the buyer, the seller and also the MOA brokers participating in the transaction, on the basis of the signed MOA, the buyer transfers a deposit of 10% of the value of the yacht to the seller’s broker. The broker is not entitled to offer it to other buyers. From the point of view of a legal representative, it is evidence of the seriousness of the buyer’s intention, which means that the buyer can set a date for a surveyor check, order services for lifting the yacht for inspecting the underwater part, etc.
Sea trial & Surveyor
Usually sea trail is a yacht sailing from the marina to the sea lasting from 1 to 4 hours. The purpose of the sea trail is for the buyer subjectively assesses whether he likes the boat, how it behaves at sea, and also, together with technical specialists, identifies the presence of vibrations, the operation of engines and the propeller-steering group in various modes. The peculiarity of the seatrail, if some defects are found, the buyer can refuse to purchase the yacht, ask the seller to eliminate the defects or a discount for the amount of repair. It is also possible to refuse to purchase a yacht, based only on your feelings, while paying for the organisation of the sea trail.
According to MOA, the seller is obliged to prepare the yacht for sailing (no more than 4 hours in duration) and all costs are borne by him. Having passed the sitrail, the buyer has the right to refuse to buy a yacht for subjective reasons within 24 hours from the moment the sea trials are completed. In this case, he is obliged to reimburse the costs of testing (usually the cost of fuel and payment of the captain). The further course provides for a thorough technical inspection of the yacht on the water, as well as lifting the vessel on the shore to inspect the part. All this is usually done by an independent surveyor.
Legal & Closing
The legal part of the transaction can be divided into two components. The first is to check the “legal purity” of the yacht you like. The second is to request from the seller a package of documents that the buyer provided for the registration of the yacht under a particular flag. The financial issue is the transfer of the deposit to the broker, and upon completion of the transaction, the transfer of the amount of the main payment to the broker, who in our case acts as an escrow agent.
The organisational part includes how the interaction of the buyer (and his broker) with the seller (and his broker) will be built, the date of the operation, the sequence of actions to eliminate defects identified during the survey, and much more. The delivery of Yacht normally happens in the neutral waters 12 nautical miles from the shore.
Superyacht finances, survey, purchase