“Buying a second hand boat can be a pretty big investment, yet despite the expense the legal side of buying a boat can be as simple as buying a newspaper! With that in mind it makes sense to undertake a few basic checks before parting with your money and actually committing to buy”, explains Mandy Peters, RYA Legal Manager.
Once you’ve found your dream boat, it would be wise with an investment of this size to proceed with caution, ensuring you avoid any potentially expensive shortcuts. Paying attention to the following steps will help to ensure your purchase proceeds smoothly.
A sale and purchase agreement, as the name suggest, governs the rights and responsibility of the parties to the contract and determines the transactional process, encompassing such matters as payment of the deposit, the buyer’s entitlement to have a survey carried out on the vessel and conduct a sea trial; acceptance of the boat or otherwise; termination of the agreement and how disputes between the parties are to be resolved.
“Our advice is that you read the agreement carefully and only once you are satisfied with the terms of the agreement consider the next stage of the process,” explains Mandy.
“Prior to paying a deposit, make enquires with the broker as to how the deposit and/or completion funds are to be held. A standard deposit is 10% of the purchase price (although it may be possible to negotiate the payment of a reduced rate) and it’s important to agree on the method to be used to pay the funds.”
Once satisfied with the documentation, a sea trial is recommended. You will need to review the sale and purchase agreement carefully to ensure that you are entitled to withdraw from the sale if you are not happy with the boat following sea trial.
A survey is considered essential by most purchasers to check the condition of the boat and its engine/equipment. Although the boat may appear superficially to be in excellent condition, a survey is nevertheless a sensible precaution.
The buyer may be to withdraw from the purchase as a result of the findings of the survey or renegotiate the vessel’s price, or request that the seller rectifies any defects at his expense, prior to completion of the contract.
Although the law is not prescriptive as to the documentation to accompany the sale and purchase of a vessel, documentation is required to comply with certain legal requirements such as the Recreational Craft Directive, compliance with national and EU-wide VAT rules and any national registration requirements. If the seller is unable to produce documentation, the buyer may be entitled to withdraw from the sale.
For more information, pick up a copy of the ‘RYA Boat Buyers’ Handbook’ available in both print and e-Book formats at www.rya.org.uk/shop. Written in an accessible fashion, the RYA Boat Buyers’ Handbook is a vital purchase for anyone looking to get on the water in their own boat.
The RYA has also produced a Sale and Purchase Pack, exclusively available to RYA members, containing all the essential information on buying and selling your boat, which can be downloaded from the RYA website or by contacting the legal team on 023 8060 4223 or email@example.com, quoting your membership number.
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