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The 2012 Yacht Buying Guide in London and around the world

A superyacht exudes luxury, exclusivity, privacy and to many it symbolises success.  The process of purchasing a superyacht however, requires guidance and support from those with expertise.  Here at Highlife, we have put together a step by step guide on what to consider and to expect when purchasing a superyacht.

What classifies as a superyacht?

A superyacht is a yacht longer than 24 meters.  Above this size specific rules regulations apply and a crew must be employed.

Step 1: Location

Deciding on where you would like to be located is an important starting point.  Location will influence the size and specifications required on board.  Prices will also vary between locations.  For example prices will be higher in more exclusive harbours.  It is important when choosing a location to also select a good broker.  A good broker will bring expertise to your attention and will help guide you through purchase.

Step 2:  Choosing a yacht type

Considering what type of yacht is perhaps one of the most time-consuming aspects of purchase.  Purchasing a fully-customised yacht, a semi-customised yacht, production yacht or a used yacht may be considered.

Production yachts

Production yachts do not come with the expenses associated with customisation, therefore, will provide you with the least expensive brand new yacht.  Production yachts tend to be smaller in size than customised yachts.  However, in recent times the size of production yachts are generally increasing. 

Semi-Customised yachts

A semi-customised yacht can provide you with the opportunity to tailor elements in order to provide a unique personalised touch.  For example you may change the number of cabins or on deck features.

Fully- customised

Fully- customised yachts are the most expensive and time consuming option.  They can provide you with the creative freedom in order to customise your yacht exactly to your specifications.  Whilst this will provide you with the most exclusive of yachts, there may be a long wait until completion with some projects taking up to 3 years to complete.

Used yachts

The least expensive way to invest in a superyacht is to purchase a used yacht.  There may also be opportunity to use existing crew.  If you do choose to go down this route, it may be a good idea to find out the reasons why the yacht is being sold, and how it was used. 

Whichever route you decide to choose, be sure to learn of reputable brands.  This will reflect in the quality of yacht and may be beneficial in terms of maintenance in the long run. 

Step 3: Enter a Memorandum of Agreement

 When purchasing a superyacht it is mandatory to enter a memorandum of agreement.  The agreement will be tailored specifically to the yacht you are to purchase.  In order for your to be protected, it is important that the agreement is clear, and leaves no room for ambiguity.  The agreement should be first reviewed by a lawyer for protection and to ensure a safe transfer.  The memorandum of agreement will be available to you from your broker. 

Step 4: Superyacht survey

A survey of the superyacht is required to be carried out before purchase.  An inspection of the condition of the yacht will need to be made.  Surveys are normally carried out both ashore and on sea.  The MOA (memorandum of agreement) should provide for the survey, and allow for cancellations or deductions for any repairs from the purchase price. 

Step 5: Recruiting Crew

When making a purchase it is mandatory to recruit crew for your superyacht.  If you are purchasing an existing yacht it is slightly easier as you may be able to use existing crew belonging to that vessel.  As the crew will already be familiar with the yacht it will provide you with the quickest route for use.

Step 6: Payment

The total cost will need to be agreed.  If purchasing an existing yacht, 10% of the purchase price is usually paid up front.   If purchasing a customised yacht, the builder may require you to pay upon the completion of various stages of construction. 

It is also important to know if the agreed purchase price is inclusive of all and any taxes, VAT, duties which may be applicable to the superyacht.

 Step 7 : Insurance

 Insuring against accidents is vital when purchasing a superyacht. You should arrange for the superyacht and crew to be insured in advance of the purchase so that all your covers are in place upon completion of the purchase.

 Step 8:  Documentation

 It is important that you receive all the necessary yacht documentations linked to its registration. These documents should be carefully checked by your superyacht lawyer so as to ensure that the yacht can now go ahead and be registered.

Step 9: Registration

It is a legal obligation that all superyachts are registered with one particular country and wear the appropriate maritime flag, known as an ensign.  Most superyachts tend to fly the red ensign as it indicates high safety standards.  This also reflects it’s prestige and resale value.  The red ensign is a mark of those vessels registered in the UK or one of a few Commonwealth countries including Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Guernsey, Jersey and the Isle of Man.  Your superyacht lawyer should arrange for the yacht to be registered with the appropriate flag.

 

Whilst this guide can provide you with an outline as to what is expected when purchasing a superyacht, always seek professional, legal and financial advice before entering any agreements.

GC Privé has exclusive relations with some of the most established yacht brokers around the world. Contact us at yachts@gcprive.com for further advice.


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