Yacht Purchase Deposit & Escrow

A yacht purchase deposit is a sum the buyer pays on signing the purchase agreement, commonly a memorandum of agreement (MoA). It is usually held by a named third party, such as an escrow agent or the client account of a broker or lawyer, until the contract conditions are met. At closing it is normally credited against the purchase price.

10% is a common reference in yacht sales, but the amount is whatever the contract states.

The deposit shows commitment, compensates the seller in defined circumstances if the buyer defaults, and allows the yacht to be committed to the survey and sea-trial process.

It is agreed between the parties and written into the contract. 10% is often referred to, but it is not a legal requirement or universal rule; it can be higher or lower depending on the transaction.

A deposit is normally paid after the MoA is signed, within a time set by the contract, not when an offer is first made. Paying before a signed agreement names the account holder and release terms exposes the buyer to unnecessary risk.

The contract names who holds the deposit. Common options are an independent escrow agent, the client account of the seller's central agent or another broker, or a lawyer's client account. The deposit should never be paid to the seller directly or to a personal account.

Escrow means a neutral party holds money under written instructions and releases it only when specified conditions are met. The escrow agent is not acting for one side alone.

A client account is a segregated account in which a broker or lawyer holds money on behalf of clients, separate from their own business funds. Rules on client accounts vary by firm, professional body and jurisdiction; buyers should ask how the account is protected.

A stakeholder holds the deposit for both parties pending the outcome. Who is treated as owning the money while it is held depends on the contract and applicable law; it is not the seller's money to spend before the conditions for release are met.

Generally no. Under a stakeholder or escrow arrangement the deposit remains held until closing or another release event defined in the contract.

Not automatically. Whether the seller must stop marketing, and whether the yacht is shown as under contract, depends on the agreement.

The buyer arranges survey and sea trial within the contract's timetable, then accepts the yacht, accepts it subject to agreed repairs or adjustments, or rejects it. Each outcome has consequences for the deposit set out in the contract.

Where the buyer rejects within the contract's terms, the deposit is typically returned, sometimes less agreed costs. A rejection outside those terms may put the deposit at risk.

If the seller fails to complete, the buyer's remedies, including return of the deposit, depend on the contract and applicable law. Take legal advice promptly.

If the buyer fails to complete without a valid contractual reason, the deposit may be forfeited to the seller as the contract provides, and further claims may be possible.

If price or terms change after survey, the change should be recorded in a written addendum stating how the deposit is treated.

At closing the deposit is normally credited against the price, the balance is paid, and the account holder releases funds according to the contract and a closing statement once title documents are exchanged.

Whether a deposit earns interest, who receives it and who pays bank charges are matters for the contract and the account holder's terms. Many deposits earn little or no interest.

If the deposit is paid in a different currency from the purchase price, agree who bears exchange-rate risk and conversion costs in writing.

Obtain bank details from the named account holder through a secure channel, then verify them by phone using a contact number you already know, not one in the email. Confirm the account name matches the account holder named in the agreement.

Fraudsters intercept or imitate email accounts and send convincing payment instructions with altered bank details. Yacht transactions are attractive targets because of the sums involved.

Treat any change of bank details as a red flag. Stop, verify independently by phone with known contacts and your lawyer, and do not pay until confirmed.

A small test payment, confirmed by phone as received, can reduce risk, but it does not prove the account is legitimate. Verification must still be done independently.

Contact your bank immediately to request a recall, inform the account holder and your lawyer, and report to the police. Speed matters.

Deposits are normally paid by bank transfer to a regulated account. Crypto or other unusual methods raise legal, AML and recovery issues and should be avoided unless specifically advised by your lawyer.

The account holder will usually carry out identity, beneficial-ownership and source-of-funds checks before accepting money. Prepare documents early to avoid delays.

If the parties disagree on release, the account holder will usually hold the funds until the parties agree in writing or a dispute process under the contract is resolved.

Confirm that the agreement is signed, the account holder is named, bank details are verified by phone, the account is not personal, currency and charges are agreed, release conditions are understood, and your lawyer is involved.

Lund Group coordinates the transaction with the buyer's lawyer, the seller's central agent and the nominated account holder. Lund does not ask clients to send deposits to Lund Group and does not act as escrow agent unless it is genuinely appointed as account holder for a specific transaction and that is stated in the agreement.