Where the money sits, who controls it, and how it is released.
What the deposit does
The deposit takes the yacht off the open market and demonstrates that the buyer is committed. It is paid on signature of the sale agreement, before survey, and it is the buyer's money held on defined terms — not a payment to the seller.
Where it is held
Into an escrow account, a broker's dedicated client account, or a lawyer's client account, as the agreement specifies. The account, the account holder and the release conditions should be named in the contract. Funds should never be sent to a personal account or to an unnamed intermediary.
Release and return
The agreement sets out when the deposit is released to the seller, usually at closing against delivery, and when it is returned to the buyer, typically where the yacht is properly rejected following survey within the notice period or where the seller fails to perform. Where the buyer simply walks away outside those rights, the deposit is usually at risk.
Payment fraud
Payment instruction fraud is a genuine risk in yacht transactions. Verify account details by an independently obtained telephone number before transferring, treat any change of banking details mid-transaction as suspect until verified by voice, and expect your broker and lawyer to insist on the same discipline.
- Verify account details by voice, using a number you already hold
- Treat mid-transaction changes to bank details as fraud until proven otherwise
- Send a small test transfer where the parties agree to it
- Never accept payment instructions by email alone
Advice
Escrow terms are legal terms. A maritime lawyer should review them, and larger transactions ordinarily use a lawyer's client account rather than a broker's.
Questions
- How much is a yacht deposit?
- Ten per cent of the purchase price is a common convention, but the figure is a matter for the agreement.
- Does the deposit earn interest?
- Sometimes, depending on the account and the agreement. Where it matters, deal with it in the contract.
This guide is general information about how the yacht market conventionally works. It is not legal, tax, financial or insurance advice, and it does not describe the terms of any specific yacht. Qualified advisers should be engaged on anything material, and rates, prices, availability and access are confirmed in writing before anything is committed.