English couple looking to buy a yacht in Florida

[Centreboard2017]

Hi - we need help please!
We live in the UK and are fairly familiar with the buying process and contract and deposit system over here. We thought that the process would be the same in the US. We have put in an offer on a french registered yacht and the broker is requesting a deposit, so far so good. He has asked us to pay 10% into an escrow account. We read that any account should be with an Attorney but in this case the payment goes directly to the broker. We also asked for proof of VAT paid status, proof of registration when the boat was new and check that there are no outstanding debts against the boat.The broker has so far not produced any of this although he assures us that this is all in order and that after the survey all the paperwork is checked. However, once the survey is done we only have something like 48 hours to accept or reject the boat - how can we do this if we haven't checked the paperwork? Argh!

I would be really grateful for any advice - is this all normal process in the US? We thought that yacht buying would generally be a similar process everywhere, maybe we are being a bit naive?

[boatman61]

Walk away..

[CSY Man]

The contract should guarantee you there is no liens on the boat.
If you use a reputable broker, very low risk.
Never used an attorney to buy a boat or deposit into an escrow.
Use Google to check the reputation of your broker, any bad news should pop up fairly quick.
Yes, you should get copies of important paperwork like registration, etc.
The 10% is fully refundable up to the point you accept the boat.

[GTom]

once the survey is done we only have something like 48 hours to accept or reject the boat

Very simple: reject now and you can save yourself from the headache. Understanding and drawing conclusions from a survey may take more than 48 hours... You'll find dozens of decent boats in the neighboring marina...

Title might be critical, depending which flag you are after. Some jurisdictions ask for the complete paperwork from the 50 years old builder's certificate and all the (sometimes 20+) bills of sale.

[Pete7]

Go on, who is insisting you only have 48 hours after the survey to accept or reject the boat? Written in a contract? cross it out and go from there, or as Phil says walk away.

Pete

[Kelkara]

Originally Posted by Centreboard2017

We also asked for proof of VAT paid status

I could be wrong, but if the sale is taking place in Florida (Outside the EU), I think the boat will lose it's VAT paid status the moment it changes ownership.

[bootneck]

We've just bought a boat in Florida, we're also from the UK and found the process worse than buying a house, we heard "yeah, don't worry about it" a lot. The process is, make an offer, transfer 10% into your broker's escrow account, sign the contract with two crucial dates on it which are
1. Acceptance or non-acceptance of boat. You agree this date on the contract and needs to be in writing, with either full acceptance, a counter offer or reasons for non-acceptance (seems these reasons can be anything)
2. Closure date - the date you take ownership, ie money is transferred to the seller
Both parties sign contract, and so have to agree the dates.
If you don't comply with the dates in the contract you forfeit your 10%, however you can extend the dates if both parties agree.
We had/still have a good relationship with the seller, which really helped.
Once we accepted the boat (with caveats to fix things found on the survey) we had a documentor do all the searches for the sale, not too sure what would happen if they found anything as ours was all good.
We re-registered the boat in the UK ourselves as there didn't seem to be anyone too knowledgeable on the process here in the states, it wasn't too difficult, but you'd have to get a tonnage survey done.
Unless you want to pay the tax in the US you'll also have to get a tax decal for 90 days exception for about $250 from your broker, which can be extended for a further 90 days for $450, you then have to get out of the US for 15 days and send the US taxman proof such as a fuel receipt. Pm me if I can fill in any blanks for you I will

[CSY Man]

. found the process worse than buying a house, we heard "yeah, don't worry about it" a lot.

What was the big problem?
I have bought plenty boats and houses in Florida and never had any issues.
Just curios, if both parties are motivated, the boat (or house) are in decent shape, no liens
and financing in place. What went wrong?

[sailpower]

Originally Posted by bootneck

We've just bought a boat in Florida, we're also from the UK and found the process worse than buying a house, we heard "yeah, don't worry about it" a lot. The process is, make an offer, transfer 10% into your broker's escrow account, sign the contract with two crucial dates on it which are
1. Acceptance or non-acceptance of boat. You agree this date on the contract and needs to be in writing, with either full acceptance, a counter offer or reasons for non-acceptance (seems these reasons can be anything)
2. Closure date - the date you take ownership, ie money is transferred to the seller
Both parties sign contract, and so have to agree the dates.
If you don't comply with the dates in the contract you forfeit your 10%, however you can extend the dates if both parties agree.
We had/still have a good relationship with the seller, which really helped.
Once we accepted the boat (with caveats to fix things found on the survey) we had a documentor do all the searches for the sale, not too sure what would happen if they found anything as ours was all good.
We re-registered the boat in the UK ourselves as there didn't seem to be anyone too knowledgeable on the process here in the states, it wasn't too difficult, but you'd have to get a tonnage survey done.
Unless you want to pay the tax in the US you'll also have to get a tax decal for 90 days exception for about $250 from your broker, which can be extended for a further 90 days for $450, you then have to get out of the US for 15 days and send the US taxman proof such as a fuel receipt. Pm me if I can fill in any blanks for you I will

This is only applicable to Florida not the entire US.

You can avoid FL tax by agreeing to remove the boat within 90 days. That decal is $20 not $250. You will have to submit proof of removal and that is on you.

You can extend for an additional 90 days under certain circumstances for an additional $425.

This information is a few years old and may be up slightly today. Definitely not $250 for the first 90 days.

Regarding acceptance of vessel, the FYBA (now IYBA) contract states that if written notification of acceptance is not received by the accept/reject date the vessel is deemed to be rejected. Not all FL brokers are members of FYBA/IYBA so may use different contracts.

[denverd0n]

Brokers in Florida are required by law to maintain a separate escrow account where deposits would go. You may be sending the deposit check to the broker, but comingling your deposit with other brokerage monies would be a criminal offense.

As mentioned, everything is negotiable. I, personally, would not agree to a 48 hr acceptance period after the survey was completed. At least, not unless the stipulation was that if they didn't hear in 48 hrs then the deal was off. And that's if I were buying a boat here in Florida, where I live. I most ESPECIALLY would not accept such a short period if I lived in a completely different country!

Good luck!

[CarstenWL]

I could be wrong, but if the sale is taking place in Florida (Outside the EU), I think the boat will lose it's VAT paid status the moment it changes ownership.

The EU flagged boat will only loose VAT paid status if longer than 3 years outside of the EU.

Regards,

Carsten

[Pete7]

Beg to differ, but a selling an EU VAT paid vessel outside the EU also causes the vessel to loose its VAT paid status.

Pete

[boatman61]

You should insist on all being proved to be as you wish paperwork wise before investing in a liftout and survey.
Also be aware that deregistration will take a minimum of 6 weeks after you have signed.. you will also be taken off the French MMSI register so will have to enter into the UK system.. so basically you will be unable to move for maybe 2 months after closing the deal.
Also.. get confirmation/proof about how long the boat has been out of the EU..

[svlamorocha]

Originally Posted by msdj69

That's definitely worth some research. Does anybody else have experience with this situation?

Originally Posted by CarstenWL

The EU flagged boat will only loose VAT paid status if longer than 3 years outside of the EU.

Regards,

Carsten

Carsten's statement is not correct at least in the UK version of harmonised VAT rules. If you buy outside the European VAT territory a boat with VAT paid and then take it to the UK you will find that none of the "relief" options applies to you. The trick yo understand this is that there is no such thing as "VAT paid status"; there are various "reliefs".

[CarstenWL]

Carsten's statement is not correct at least in the UK version of harmonised VAT rules.

Pete7, svlamorocha

Thanks for the heads-up. I once saw that if the VAT paid boat change hands and is reimported by another than the exporter, VAT is due irrespective of the period of absence but did not find the EU law underlining this when I searched for it a while back.

Regards,

Carsten