Yacht Purchase Due Diligence

Title and ownership

A yacht is normally held in a corporate owning structure. Due diligence establishes who holds title, whether the registered owner has authority to sell, and whether any mortgage, lien or arrest affects the vessel. Registry searches and lawyer-led confirmations are the standard route.

Where the transaction is structured as a share sale rather than an asset sale, the exercise extends to the company itself, its liabilities and its history.

Flag, class and compliance

Flag state, class society and the yacht's commercial or private status determine which codes apply and what is required at delivery. Outstanding conditions of class, overdue surveys and pending statutory requirements are material to both price and timetable.

• Registry certificate, tonnage and safety documentation.
• Class status, survey cycle and any conditions or recommendations.
• Private or commercial coding and the implications for charter use.
• Radio, MARPOL, ballast and emissions compliance as applicable.

VAT, tax and importation

VAT status is one of the most frequently underestimated items in a European transaction. Proof of paid status, temporary admission history and the intended cruising and charter pattern all affect the position, and they differ between jurisdictions.

This is a matter for a maritime lawyer and a specialist tax adviser. Assumptions carried over from a previous yacht are rarely safe.

Technical and operating records

Maintenance logs, engine hours, refit specifications, warranty records and yard invoices are read together with the survey. A yacht with complete, consistent records supports its asking price; gaps in the record usually widen the scope of inspection.

• Refit history, yard periods and documented works lists.
• Running hours for main engines, generators and tenders.
• Warranty and service coverage still in force.
• Inventory, spares and equipment included in the sale.

Crew, contracts and handover

Crew employment, management agreements, berth contracts, insurance and any charter commitments in place all survive or terminate on agreed terms. Whether crew transfer with the yacht is a commercial negotiation, and it is usually settled before closing rather than after.

Closing itself is documented through the bill of sale and the protocol of delivery and acceptance, with funds released against agreed conditions.