Buying or Selling Boats Privately

The aim of this article is to provide our members with a complete package of information relating to the different aspects of buying and selling a secondhand boat.

It is specifically aimed at private individuals who are selling or buying a British registered or unregistered boat. We hope to provide a one stop shop for boat buying and selling information, therefore saving our members time and effort.

Please note that assistance is also available if you are buying a new boat, buying or selling through a broker or buying or selling abroad.

Our Step by Step Guide to Buying and Selling a Boat provides you with some detailed information on the process and documentation involved in the transaction.

You can download our Buyer Beware document (RYA), which is a general leaflet that runs through the normal pattern of a sale. It covers the common problems and pitfalls that can arise, for example, how do you check whether the seller of the boat is the owner of the boat and how do you establish whether or not there is a marine mortgage or lien on the boat.

The RYA Agreement for the Sale and Purchase of a Secondhand Boat is a standard form agreement that lays down the common terms relating to the sale and purchase of a boat.

The Agreement presupposes that the buyer will be having a survey carried out; if you are not planning on doing so, or if the survey has already been carried out, the Agreement will need to be amended. If the boat is particularly expensive or if the sale is particularly complex, it may be necessary to make amendments to the agreement, possibly with the help of a solicitor. However, for the majority of private boat sales of a British registered or unregistered boat, the standard form Agreement should be sufficient.

Where members do edit or amend the RYA standard form Agreement, we ask that they make it clear on the Agreement that is has been edited or amended.

Title Check
Our Title Check leaflet lists some of the checks that you should consider conducting prior to handing over any money on the purchase of a boat.

It is vital to ensure when purchasing a secondhand boat, that you are aware of the title documentation that should accompany the boat. The essentials include: Bills of Sale (ideally going back at least 5 years if you wish to put the boat on Part I of the British Register), Builders Certificate, original/copy VAT invoice, Certificate of Registry (if registered) and documentation evidencing compliance with the RCD.

From a buyer's point of view, he will wish to know that the owner does indeed own the boat and has the legal right to sell it. He especially needs to know whether there are any mortgages on the boat. It is essential that he carries out a search with the UK Ship Register (RSS) as well as asking the owner and/or broker whether the boat is mortgaged and includes a clause in the contract to the effect that the boat has no mortgages, encumbrances, charges etc. If the right questions are not asked and searches are not made of the Registry, he may end up buying a boat that is mortgaged and legally the mortgage company may be considered to be the owner and seek to have the boat arrested in order to secure its funds.

This is a vital piece of information and whilst mortgage fraud is certainly not rife it does happen and it therefore pays to know what questions you need to ask and what searches you need to carry out when buying a boat.

You may wish to visit www.stolenboats.org.uk ,a website containing a free national database of stolen boats, to check that the boat you are considering purchasing is not listed on the site as stolen.

VAT Information
Both buyers and sellers need to be aware of the rules regarding VAT on boats and we therefore suggest you take a look at the VAT Section of the website which will guide you through the many different VAT scenarios relating to buying or selling secondhand boats within the EU, and points you to the relevant VAT Notice on the Customs website that deals with that particular issue.

If you are buying a secondhand boat outside the EU you should access the VAT Section of  the website . This Section gives an overview of the common VAT rules applicable to boat buying outside the EU, including how Customs value boats for VAT purposes, the rules on temporary importation, and the rules relating to transfer of residency relief.

Recreational Craft Directive
The Recreational Craft Directive applies to boats built after 16th June 1998. If the secondhand boat that you are selling or thinking of buying is older than that then the RCD will not apply, provided it has been placed on the EEA market before 16/6/98. If you are buying a non EEA boat e.g. from the US, check whether it has been in EEA waters before 16/6/98 and there is documentation to prove this. If you think the Recreational Craft Directive may apply to you, please take a look at the Technical Section of the website.

Surveys
The survey is a key part of any boat sale and purchase. You can download contact details for the different survey organisations, a general leaflet on what a survey usually covers and what it doesn't cover, and what to do if a surveyor does a negligent survey . All of these documents can be obtained from the Survey Section of the website.

Bill of Sale
On completion of the transaction the seller should execute a Bill of Sale in favour of the purchaser. If the boat you are buying or selling is unregistered or registered on the Small Ships Register then you can use the RYA Bill of Sale. This Bill of Sale may not be used if the boat concerned is registered on the Part I Register. The Part I Bill of Sale is obtainable either from the UK Ship Register (RSS) (Tel:   02920 448800  ) or by accessing the UK Ship Register (RSS) website www.ukshipregister.co.uk or www.mcga.gov.uk then follow the link for online registration.

RYA Syndicate Agreement
It is common for members to buy boats jointly, to help defray the costs of running of a boat. If you are thinking of doing this then you may find it useful to download the RYA Syndicate Agreement together with an article on some thoughts on Syndicates and an article on joint or co-ownership, which explains the different ways in which boats can be owned, and the effect that this can have.

Members can obtain further information on buying a secondhand boat by referring to the RYA publication Buying a Secondhand Boat - the legal aspects which is available from the ordering hotline on   0844 5569518   or by post at RYA House, Ensign Way, Hamble, Southampton, Hampshire, SO31 4YA or by fax: 023 80604295 or by email: orders@rya.org.uk or online, via the RYA shop, which has a secure credit card facility.

Once you have looked at this part of the site we would also suggest that you look at the Boat Registration Section and the Boat Insurance Section. This will enable you to register your boat, and give you details of insurers so you can insure your boat. Once those things are done, you will then have completed all the elements that, as a matter of good practice, you should have in place prior to using your newly acquired boat.

If you have any queries or comments, please contact the Legal Team Tel:   0844 5569519   Email: legal@rya.org.uk.

The following tiltes can be checked on the RYA web site: -

RYA Sale and Purchase Pack
Step by Step Guide to Buying and Selling a Boat
Buyer Beware
Plain Selling
Agreement for the Sale and Purchase of a secondhand boat
Title Check Leaflet
VAT
Recreational Craft Directive
Surveys
RYA Bill of Sale (SSR/Unregistered)
MCA Bill of Sale (Part I Registered)
RYA Syndicate Agreement
Some Thoughts on Syndicates
Joint or Co-ownership
Boat Registration
Boat Insurance
A Short Guide to Buying a Boat
New and Used Boat Buyer's Guide
Further Info
Buying a New Boat
Buying and Selling through a Yacht Broker
Buying a Boat Abroad