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Old 22-03-2013, 17:43   #1
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Quandary on yacht purchase with lack of paperwork. UK.

The scenario is that I've found a 32 year old 35ft sloop which is being offered privately by the owners long term 'friend'. This is a local yacht and being a relatively small community I can vouch that its been moored local for 10 years which the harbour master (who I know) can also vouch for.

My concern is that there is no original bill of sale or builders certificate to confirm its VAT status. There is a bill of sale from a brokers to the present owner dated 2002 but nothing else.

Running costs, storage and maintenance are of no issue whatsoever, its getting the purchase correct so I don't end up lumbered with a banana.

Any advice welcome as the more I can gather from others experiences the better.
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Old 04-04-2013, 05:12   #2
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Re: Quandary on yacht purchase with lack of paperwork. UK.

What is her registation, Part 1 or 3? Part 1 should show the owner, mortgage etc, but not liens and it is updated on every change of ownership and every 5 years.

Part 3 is a bit of paper for waving at foreign officals. It doesn't mean much!

Try getting in touch with the Ship Registry in Cardiff. They are usually very helpful.
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Old 04-04-2013, 06:10   #3
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Re: Quandary on yacht purchase with lack of paperwork. UK.

If she was built before 1984, that she is automatically deemed VAT paid.

Furthermore if you have a bill of sale, it shouldn't be "from a broker". ( ie the broker cant be the "seller" only an agent for that seller. If the seller ( broker) was in fact a "dealer" and sold a 2nd hand boat , then there should be a VAT invoice from that transaction from the dealer

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Old 04-04-2013, 14:06   #4
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Re: Quandary on yacht purchase with lack of paperwork. UK.

Thank you for taking the time.

I have found out who the dealer was and they acted upon behalf of a government institution. A government institution that the present owner used top be with prior to purchasing the yacht.

Its also pre 1984 which is good news. The only thing I need to check now is that there is no loan/mortgage on it except I don't have much time. I see that a check can be made by post but I'm wondering if this can be done over the phone with a debit card payment and left with them for the day, even if there is an excess fee. This is something I'm looking into now. Failing getting any info tonight I'll call the ships registry tomorrow and lay my case to them.

I'm first in the queue for purchase so its down to holding my nerve and maybe having to go for it not having been able to check the financial status of the yacht.

Much appreciated.
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Old 04-04-2013, 14:22   #5
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Re: Quandary on yacht purchase with lack of paperwork. UK.

i would be more worried about the "Friend" selling the yacht,it wouldn't be the first time someone sold something that wasn't theirs to sell,then dissapered!
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Old 04-04-2013, 14:36   #6
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Re: Quandary on yacht purchase with lack of paperwork. UK.

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i would be more worried about the "Friend" selling the yacht,it wouldn't be the first time someone sold something that wasn't theirs to sell,then dissapered!
I should have added that I'm now in touch with the owner, someone who I had known in the business some years ago. The friend owns a very successful hotel here and is well known in the community, but because it turns out the owner and I have past history we are now in direct contact.

Even so I need to check the financial aspect of the boat. I trust the owner 100% as his integrity is paramount to him in the yachting community, however I need to know.
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Old 04-04-2013, 14:40   #7
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Re: Quandary on yacht purchase with lack of paperwork. UK.

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I should have added that I'm now in touch with the owner, someone who I had known in the business some years ago. The friend owns a very successful hotel here and is well known in the community, but because it turns out the owner and I have past history we are now in direct contact.

Even so I need to check the financial aspect of the boat. I trust the owner 100% as his integrity is paramount to him in the yachting community, however I need to know.
all ways good to check for encumberances and make sure what you see is what you get,ask any american about the purchase of "london bridge"!
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Old 04-04-2013, 15:05   #8
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Re: Quandary on yacht purchase with lack of paperwork. UK.

Don't you mean tower bridge

If I can satisfy myself that there are no encumbrances I should be the new owner by Monday morning.
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Old 04-04-2013, 15:37   #9
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Re: Quandary on yacht purchase with lack of paperwork. UK.

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Don't you mean tower bridge

If I can satisfy myself that there are no encumbrances I should be the new owner by Monday morning.
thats the one!

good luck hope it goes well,what part of country are you in?
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Old 05-04-2013, 01:25   #10
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Re: Quandary on yacht purchase with lack of paperwork. UK.

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Originally Posted by Reverend Rufus View Post
I have found out who the dealer was and they acted upon behalf of a government institution. A government institution that the present owner used top be with prior to purchasing the yacht.
If the boat is on Part 1 (sounds like it is) then can get a full transcript of owners back to new as well as do the search that no debt secured on the boat.

Just to say that whilst Part 1 does have the capacity to register loans etc against a boat it is not compulsory to do so - although someone lending as a boat mortgage would be an idiot for not doing that, and in practice any commercial lender would - but it is not 100% definative, nothing is! (a private lender might not be aware or simply not have bothered - or the Owner could have pledged all his assets to a bank). In practice 99% seems to work ok, at least 99% of the time!

What is the norm is for the Bill of Sale to record that the Vendor is selling the boat at £XXX price, with VAT and all applicable taxes paid and "free of all liens and encumberances". Of course just because someone signs a bit of paper does not guarantee it is true, but most folks are strangely honest - or at least unwilling to sign a lie! Plus it gives you half a leg to stand on if things turn out to be less than true - especially as time goes by.

Appreciate that time does appear to be of the essence, but usual MO is to initially sign a Sale Agreement (if no broker involved can likely snaffle something off the internet) - whether a deposit is paid of 10% or £1 is largely irrelevant (and simply a matter of negotiation), but what it gives both sides is a certain time frame (usually a couple of weeks - but could be a month, but it's whatever works for both sides) to complete the deal, or not.

In practice enough wiggle room for a buyer to back out if the Survey (or own later inspection) reveals something that affects either the value (and which can't be re-negotiated into the price) or simply the desire to own the boat because not as expected when valued, but nonetheless provides some certainty for the Vendor that, all things being equal, the boat will be sold by a certain date - which should take most of the time pressure off both sides. That does not automatically mean that the boat goes "Off the Market" (still listed and even viewings) but it will mean that you have first option to buy within the agreed timescale.

Not to say that you can't proceed on just a handshake and then close with a Bill of Sale and exchange of money as soon as you want - just that if you are paying out for any expenses and putting time and effort in (Survey? / Haul out? / Marine Engineer? / Sea Trial?) before closing the deal that the Vendor could sell to someone else (with a higher offer?) and you would be out of pocket with no recourse (not to say that many ever go to court over a boat sale agreement even when the other side clearly breaks it - usually not worth the cost and hassle)......very likely all will go smoothly , but forewarned is forearmed.
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Old 05-04-2013, 01:56   #11
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Re: Quandary on yacht purchase with lack of paperwork. UK.

Actually it is the Brooklyn bridge which fits the saying.

FWIW, at least in the states there are title search services which include checking for any liens. These can be commenced over the phone with a CC number.
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Old 05-04-2013, 14:41   #12
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Re: Quandary on yacht purchase with lack of paperwork. UK.

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Not to say that you can't proceed on just a handshake and then close with a Bill of Sale and exchange of money as soon as you want - just that if you are paying out for any expenses and putting time and effort in (Survey? / Haul out? / Marine Engineer? / Sea Trial?) before closing the deal that the Vendor could sell to someone else (with a higher offer?) and you would be out of pocket with no recourse (not to say that many ever go to court over a boat sale agreement even when the other side clearly breaks it - usually not worth the cost and hassle)......very likely all will go smoothly , but forewarned is forearmed.
Thank you David. I have secured the yacht and we are meeting tomorrow to draw up a bill of sale to include his deceleration of no encumbrances. Having read your post just before contacting him today I decide to offer a reasonable deposit to secure the sale to which he has agreed, giving me some time to inspect the Part 1. I appreciate you taking the time when you did as your advice came just in time for me to reconsider my next step forward David.

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Good luck hope it goes well,what part of country are you in?
The Isle of Wight.

As soon as I have the bill of sale I'll give full details on what it is and how everything went.

Thank you again everyone. I'll be here for some time me thinks.
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Old 06-04-2013, 14:39   #13
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Re: Quandary on yacht purchase with lack of paperwork. UK.

Well I made the purchase and now have a bill of sale exempting me from any incumbencies. Fingers crossed but it went very well.

The boat is an Ohlson 35 and comes will a full suit of new unused sails as well as the current full set being used. New standing rigging 2 years ago and new running rigging that just needs pulling through.

More info and images to follow once I've stopped smiling.

Thank you for everyone's advice. When I have the searches done I'll let you know the results.
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Old 06-04-2013, 15:20   #14
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Re: Quandary on yacht purchase with lack of paperwork. UK.

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More info and images to follow once I've stopped smiling.
Pics is good
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Old 06-04-2013, 15:42   #15
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Re: Quandary on yacht purchase with lack of paperwork. UK.

+1
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