Selling a Boat

If you are a private individual selling a boat, or even multiple owners, we strongly recommend drawing up a written agreement documenting what has been agreed with the buyer.

This will help reduce the risks involved in selling such as issues regarding deposits and limiting your liability.

If the boat you are selling is held under a company structure, a partnership or trust, we can manage the legal complexities involved in selling boats which are owned in this way.

Our friendly team will be happy to discuss ‘legal and beneficial ownership’ with you.

If the vessel is held under a company structure for example, transferring the shares in the company which owns the vessel may in certain circumstances facilitate a more efficient, swift and cost effective sale.

We’re ready to offer advice on a case by case basis; please give us a call to discuss your circumstances.

Prepare Your Boat for Sale:

Clean and detail the boat thoroughly, inside and out. Address any minor repairs and ensure the boat is in good working condition. 

Remove personal items to allow potential buyers to envision themselves using the boat.

Set a Competitive Price: 

Research the market to determine a fair and competitive price for your boat. Consider using online valuation tools and checking listings for similar boats.

Be realistic about the boat’s condition, age, and any upgrades or repairs that may add value.

Create a Detailed Listing:

Write a compelling and detailed description highlighting the boat’s features, specifications, and any recent maintenance or upgrades.

Include high-quality photos from multiple angles, and consider adding a video tour to provide potential buyers with a comprehensive view.

Market Your Boat Effectively:

List your boat on multiple online marketplaces, boating forums, and social media platforms to reach a wider audience.

Consider hiring a professional broker who can leverage their network and expertise to help sell your boat quickly.

Be Responsive and Flexible:

Respond promptly to inquiries from potential buyers and be available to answer questions or provide additional information.

Be flexible with showing times and be prepared to take potential buyers on a test run to demonstrate the boat’s performance and condition.

A prudent buyer will want you to prove good title of the boat you are selling. You may need to show:

 An original bill of sale ( or similar chain of ownership documents)

 Your current certificate of registration (if you have one), and

 If your boat is registered, a transcript of the registry to show whether any mortgages or other charges are registered against your vessel.

Proving ownership and showing evidence that your vessel is unencumbered may prove difficult if your boat isn’t registered. If you are serious about selling, it may be worth getting your vessel registered on the UK Ship Register before you market it.

Ask the potential buyer to qualify themselves financially – always tricky, but asking general questions such as occupation, (or previous occupation if retired) or current employment, whether they are a business owner or a property owner etc… you can usually get a good idea.

– Does the person currently own a boat, or have they ever owned a boat? Ask for details of previous boats owned.

– What is the person’s relevant boating experience (motor or sail for example), do they belong to a sailing club?

– Request details of any industry recognised boating / sailing qualifications (such as RYA), also known as “tickets”.

– Ask how many boats have been looked at prior to enquiring about yours.

– Ask what the budget is, and whether any third party lending will be required to buy the boat. If finance is required ask whether any finance arrangements are in place? Has a marine mortgage or loan application been made for example?

– Has the person factored insurance and marine surveyor’s costs into the budget?

– Where will the boat be kept? Are there any berthing arrangements in place? Has a berth been secured at a marina?

– Has the person made any enquiries into obtaining insurance for the boat? Are they aware of the cost of insurance premiums for your particular boat?

– Has a marine surveyor been contacted or instructed?

By getting answers to the above questions, you should have more of a feel of the authenticity of your potential buyer and their level of commitment; you can then decide whether it’s worth arranging a viewing.

If, during a viewing with a potential buyer, an offer is made for your boat, avoid accepting verbal offers. In the throes of excitement when receiving an offer (especially for full asking price), sellers are always tempted to waive formalities…DON’T! If you receive an acceptable offer for your vessel, it is always advisable to get your agreement of sale documented in writing. 

We can’t stress this enough! It will ensure you are protected both legally and financially and minimises the risk of any future costly and time-consuming disputes.

In the first part of this feature, we dealt with the importance of seeking legal advice and entering into a legally binding written sale agreement to govern the sale process. Be aware that as a seller, the main points to be included in the sale agreement are:

 The purchase price

 Deposit (including any forfeiture provision)

 Time scale for completion and payment of the balance of purchase price

 Transfer of risk (especially with delivery voyages)

 Warranties being asked to give on the condition of the vessel (if any)

 Rights and liabilities of each party

 Inventory (including machinery and equipment)

Once the sale has been agreed, it is customary for a deposit to be paid by the buyer. 

The industry standard for a deposit is 10% of the purchase price, but this is not a legal requirement and a nominated deposit amount can always be negotiated between the parties.

As a seller, you will want to include a forfeiture provision for the deposit in the sale contract. The most common reason for forfeiture of the deposit is if the buyer fails to pay the balance of the purchase price by a specified date. 

By including a forfeiture provision it will ensure the sale process doesn’t drag on and the buyer is less likely to pull out of the sale or make spurious offers if they know losing their deposit is at stake.

It is usual for any offer to be made subject to a satisfactory survey, so you should be confident that your boat is fit for its purpose before you market it – or else, be honest about its condition.

It is usual for the buyer to incur the cost of a marine survey but it is always advisable to make this clear from the outset!

Be prepared to negotiate with the buyer on any defects detected by the surveyor’s report which you weren’t aware of prior to the offer being made. It usually takes 7-14 days for the surveyor to produce a report. 

Where defects are identified, you will either need to get them fixed prior to completion of the sale, or negotiate a reduced price. If you agree to get them fixed yourself, be sure to get a quote for the repairs with detailed specification of what is to be done and cap the amount payable to avoid the quote or costs estimate being exceeded.

Once the parties have accepted the surveyor’s findings, the deposit held will become part payment of the sale price. You will then need to set a date for payment of the balance of the purchase price and agree the method for doing this.

Some of our clients prefer to sell their boats privately, ‘saving on broker fees’ is the common reason given, however, don’t under-estimate the benefits of using a broker to help sell your boat. 

The time saved on conducting viewings and marketing your boat can be invaluable and well worth the broker fee. That said if you’re thinking of selling your vessel through a broker, there are some important considerations to take into account if you want everything to go smoothly. 

Remember not all boat brokers are the same; check that your broker is reputable, well-established and a member of an industry-recognised professional body such as the Association of Brokers and Yacht Agents (ABYA). If you can get a word-of-mouth recommendation, even better and below are some top tips for instructing the right broker:

1. Read the broker’s terms of business very carefully, paying particular attention to the commission and fees payable. If applicable, negotiate the broker’s fee and make sure whatever is agreed is documented in writing. Also, if you are enlisting the help of more than one broker, or multiple agents, make sure the contract sets out what has been agreed between you all.

2. Has the broker got ‘exclusive’ or ‘non-exclusive’ rights to selling your vessel? Make a provision for what happens in the event you are approached by a potential buyer directly; do you have to refer them to the broker? Are the same commission and fees payable if you find the buyer yourself?

3. Check that the broker will prepare a properly drawn-up bill of sale. As previously advised we always recommend entering into a written sale agreement to govern the sale.

4. Make sure the broker operates a properly administered client trust account which will keep the funds from the sale in a separate client account held on trust or in escrow for you. Ask for written confirmation that your money will remain in this client account until completion. This will ensure your money is effectively ring-fenced from the brokers’ business so if the broker goes into administration, for example, you won’t lose your money. Make sure there is a provision for the funds to be transferred to you within 24 hours of the sale taking place.

To save you time and money during the selling process, do not offer a river trial (and in some cases a sea trial) unless an offer is made subject to survey and/or river trial. 

Even then, if you have doubts about whether a person is a serious buyer, request that they reimburse you your costs associated with the trial in the event the sale does not go ahead (with the exception of any defects that then come to light during the river trial). 

Following a successful river trial, ask the buyer to sign an ‘acceptance note’ at the time of the sale being agreed.

Some of our clients who are struggling to sell their boats (particularly with reluctant sales) are looking at alternatives to selling. If you are struggling to sell your boat, or need help with making your investment work for you, consider other alternatives to selling such as:

 Boat exchange schemes

 Part exchange arrangements

 Forming a boat syndicate to help with the cost of your boat

 Chartering (or renting out in case of a houseboat)

 Instructing a broker to help with marketing your boat

Whatever your intended arrangement for selling your boat, don’t ignore the formalities and legal issues associated with boat selling. It is always advisable to seek independent legal advice prior to the sale to protect yourself and your asset.