How to buy a yacht

You decide to become the owner of the yacht . For the process to go in the right direction, you should clearly define the following points for yourself:

– What kind of yacht do you want : motor or sailing, new or “with mileage”, its style and model, size, number of cabins, hull material (steel, aluminum, fiberglass), seaworthiness …

– How will you exploit the yacht : go on short walks along the coast or make long-distance cruises to the open sea for long periods. For example: for short exits the sea is not more than 6 miles from the coast – for fishing, walking or diving, it is better to give preference to boats with a small draft, and a platform for swimming. For longer trips to the sea for long distances, you need to choose a yacht from 10 to 50 meters with two motors.

– How long are you willing to wait : if you are willing to wait to get the desired model of the yacht, then you can consider building a yacht.

– Where to put the yacht : renting parking for a long time on the Cote d’Azur is very difficult, because places are simply not enough. Before you buy a boat, think about where you put it.

1 / The most reliable and expensive way is to “buy” a parking lot, but in France the purchase of a parking lot has its own characteristics: the coast of the sea belongs to the state, as well as the parking lots located on it. You can purchase the right to use parking for a certain period: until the end of the port concession period (from 10 to 99 years). This right of use – “amodiation” (fr.) – is given to an individual or company, and this person becomes a shareholder or shareholder of the marina.

2 / Renting a yacht will help solve the problem of parking in the summer.

3 / The acquisition of a parking space in Monaco has its own characteristics: you must be a permanent or privileged resident of the Principality of Monaco, or be a member of the Yacht Club of Monaco.

4 / When buying a yacht, it is better that its delivery date be in the spring, then you will not have to pay for its wintering.

– At what price to buy a yacht: different parameters affect the value of the vessel: 

1 / year of manufacture and type of vessel

2 / manufacturer – shipyard : a yacht from a famous shipyard will cost orders higher than a similar yacht from a little-known manufacturer. It is also important to know that if you live on the Cote d’Azur, preference should be given to shipyards specializing in the Mediterranean and Atlantic seas, and located in the “immediate vicinity” in case of a problem.

3 / technical equipment of the vessel : the motors – their power and service life (number of hours on the motors), the level of navigation equipment, and the hull material

4 / decoration materials: interior decoration and comfort elements – size and equipment of the cabins, additional rooms – bar, jacuzzi; accessories for yacht – tender, toys … 

– what are the costs after purchase: Do not forget about the upcoming annual expenses for the maintenance of the vessel: maintenance, payment for parking, water, electricity and communications, crew salary, insurance, fuel consumption at sea and, if necessary, management … Maintenance cost is approximately 10% per year on the value of the vessel and lower at the beginning when the yacht is new and when guarantees are valid, and it increases over the years when the yacht is aging. It is recommended to make frequent maintenance and cleaning of the yacht in advance and not waiting for something to break. This can be life-threatening if a breakdown happens on a trip to the sea; moreover, it is much more expensive than regular inspection and repair. Due to the fact that the yacht is constantly in a wet environment, it is susceptible to corrosion, deteriorate from sea salt, moisture and sun, therefore, constant monitoring and maintenance is necessary. Do not forget that a yacht with a “transparent”, reliable maintenance history is more attractive in the secondary market and has a higher cost.

– How to finance the purchase of a yacht in the European Union. Is it possible to get a loan : to be able to get a loan or lease in a European bank, you have to pay taxes in the EU. Additional guarantees for banks when granting a loan will also be the presence of a real estate or business account at a local bank.

In common practice, European financial institutions offer buyers a leasing program, in which you rent a yacht for 12-15 years with the option of redemption at the end of leasing. Usually require 25-50% payment of the cost of the yacht, the balance is paid monthly. The advantages are that VAT in such a leasing program is paid at half the rate.

– How to make a deal when buying a used yacht: after you have made a choice, you send the price to your owner in writing. It is also appropriate to indicate the validity period of your offer. If the owner agrees with your price, the broker will offer you and the seller to sign an agreement – Mediterranean Yacht Broker’s Association Memorandum of Agreement (MYBA MoA), in which the terms of the transaction and payment are stated. It is this form of agreement developed by the Mediterranean Yacht Brokers Association that takes into account legal norms and practices that is used by all serious brokers.

The practice is such that immediately upon signing the agreement you have to pay a deposit of 10% of the value that is transferred to the escrow account (you can choose which account to use – a broker or your lawyer. The balance is paid after making the final purchase decision and after checking – Survey or inspection is carried out by an independent expert. (It’s better if it is an expert accredited in the country whose flag the yacht is going to fly – this will save you the survey that you must pass for certification under A new flag). An expert conducts a computerized engine check, as well as a test drive – going out to sea, when the behavior of the boat is checked at maximum engine load. as well as checking for the absence of osmosis – a disease affecting the hull of the yacht. In some cases, can be taken samples of oil for laboratory research. A few days later you will receive an expert report on the basis of which you either refuse to buy or agree. Sometimes a price correction is possible taking into account the data of an expert. You should also check the yacht in the insurance company for the absence of claims from third parties.

– What documents are required when transferring a yacht from one owner to another?: When transferring yachts to you from the previous owner, make sure you have a previous registration certificate, an insurance policy, a commercial certificate (for commercial vessels) and all instructions for operating the vessel and a certificate of compliance with EU standards. It is also useful to have all the records and invoices about the repairs and work carried out on board. You receive an invoice or bill-of-sale (bill of sale), which indicates that the yacht is exempt from any payments, taxes, etc. Bill-of-sale is signed by the notary and the owner provides a certificate of the removal of the yacht from the current registration ( too: deregistration, or deregistration). To go to sea, you can simply have Bill-of-sale in your hands, which must be certified by a notary and apostilled. Also have valid insurance on hand. When you transfer the right to the yacht, the previous insurance expires.

– How to register a yacht: Any new and used yacht must be registered and flagged. Registration of a yacht implies granting her the right to fly the flag of any state (that is, determine the nationality of the yacht). The main document for registration, the Deletion Certificate, is a document confirming that the vessel has been written out from the previous registry and deselected. When registering the property and registering the yacht, it should be determined: to be the yacht in private ownership or belong to the company. For example, a private yacht registered outside the European Union may be located in the waters of its member countries, only 6 months a year. Using the temporary importation scheme, non-residents of the European Union can extend this period to 18 months. While a commercial yacht

– How to insure a yacht : Insurance will take into account such moments: initial information about the yacht (manufacturer, year, length, etc.,) the use of the yacht, both in the short and in the long term. The geography of the voyage, the nationality of the crew, the Flag and even whether the boat will be in management or not – facts that affect the cost of insurance. Tenders and all water equipment should also be taken into account when concluding an insurance contract. For them, a separate insurance contract is usually concluded.

Buying a yacht is not an easy task, and you should not be involved in this process yourself. It is better to trust the experts who know all the pitfalls of buying and selling yachts and help you successfully buy a yacht.  For more detailed and individual advice, please contact the agency. 

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