June 12th 2018. By Alex Smith.

Closing a boat sale

If you want your boat transaction to be clean, quick and problem-free, you need to know how to complete the deal.

Remarkably, there is no standard process laid down in UK law for the sale and purchase of a boat. In simple terms, therefore, if a buyer wants the boat you’re selling, you can make a verbal agreement, exchange some money and the transaction is complete. The problems tend to begin when a disagreement arises. With no documented paper trail to validate the agreed price, ownership status or vessel condition, any legal disputes can be very difficult to settle. Of course, such simplistic and informal transactions continue to happen on very low value craft or between close friends, but for most of us, the clean, rapid, legally viable and confidence-inspiring completion of a boat sale is a much more desirable outcome – and for that to happen, preparations need to begin much earlier than the point of exchange.

Cruising Power Boats: Hatteras 80

If you want the sale to be quick and problem-free, you need to know how to complete the deal.

Ten tips for closing a boat sale

1. Preparation for trouble-free completion begins the moment you put your boat up for sale.
2. While there is no formal legal process for the sale and purchase of a boat in the UK, it pays to use written documents to provide a record of the sale.
3. Make sure your boat’s documents portfolio is as complete as possible.
4. Make sure any outstanding finance is discussed with both buyer and creditor.
5. If your boat is not registered, get it registered prior to sale to add weight to your proof of title
6. While you are not required to volunteer every bit of information regarding your boat, be as candid and straightforward as possible to avoid any issues further down the line.
7. Use an approved Sale and Purchase agreement to make it plain what is included in the sale.
8. Use an approved Bill of Sale to transfer the title of the boat.
9. Don’t hand over the keys and listed documents until the buyer’s funds have cleared.
10. Consider a marine lawyer or specialist agency for particularly large, valuable or complex boats.

Understand your obligations

Private boat sales are governed by the perennial dictates of ‘Caveat Emptor’ – which means the buyer is responsible for satisfying himself of the quality and value of the product he’s buying. In essence, if he buys a boat before acquainting himself with the pertinent information, it’s his own fault. However, just as a professional boat salesman can be held accountable for making untrue statements in accordance with the Misrepresentation Act 1967, so a private seller can be sued for misrepresenting the facts. So while you don’t have to volunteer every last fragment of information, you do have to be honest when asked about elements of the boat that are imperfect.

Similarly, as the boat seller, it is ethically correct as well as legally expedient that your boat should be free of encumbrance – which means that no finance is outstanding on the boat; that it is not your means of security against a personal loan; and that no debts are owed in relation to its use, for instance for mooring, storage or other marina services. If it is encumbered in any way, you should be transparent about that and reach a written solution that is understood and agreed by both your creditor and your buyer.

If you don’t and the interested party buys your boat, he could well find himself assuming responsibility for any ongoing debts – and his only recourse in that case, whether for misrepresentation of the facts or for undisclosed financial issues, would be legal action. It is therefore vital that you put the buyer’s mind at rest by providing a signed document stating that the boat is free of all such encumbrances. It’s good for the buyer, it’s good for the boat sale and it’s good for your peace of mind once the boat is sold.

Get your documents in order

Failing to provide a watertight documents portfolio can delay progress with a boat sale, sap the buyer of confidence and undermine what had looked like a done deal. So before you reach the agreement stage, you need to ensure that every relevant document is present and correct. You can then show potential buyers a streamlined collection of relevant documents, which can simply be handed over on completion of the sale. While no two boat sales are likely to be the same, you should try to include the following:

– Proof of title, to illustrate that you own the boat and have the right to sell it. If you are the first owner, this will include the Builder’s Certificate. If not, it should include any previous Bills of Sale and, ideally, Part 1 Registration.
– Boat Safety Certificate (where applicable)
– Evidence of RCD compliance
– Evidence that the boat is VAT paid or VAT exempt
– A portfolio of itemised receipts, detailing all boat-related expenses, upgrades and repairs.
– A portfolio of service information for all relevant on board machinery
– Manuals for all on board equipment

Closing a boat sale

Before you reach the agreement stage, you need to ensure that every relevant document is present.

Use a Sale and Purchase Agreement

A written Sale and Purchase Agreement sets out the rights and duties of both parties involved in the private exchange of a boat. It is essentially a contract, designed to reflect the wishes of both buyer and seller and to enable both parties to understand what is included in the sale. It should include details of the documents the seller will hand over on completion and, to avoid any subsequent disagreements, it should contain an itemised inventory, which should be signed and dated by both parties. The contract required will of course vary. Some contracts will be for registered boats and others for non-registered vessels; some will be subject to the completion of satisfactory sea trials and surveys and others can be unconditionally binding – but in all cases, it pays to avoid misunderstanding by putting a written agreement in place. There are approved contracts available from the BMF and ABYA, which can be tailored to encompass whatever unique circumstances your own boat sale involves.

Complete the deal

Once the repercussions of the survey and sea trial have been addressed and the agreement has been confirmed or amended in accordance with any fresh findings, it is time to complete the deal. That basically comprises the witnessed signing of the Bill of Sale, the transfer of the balance of the agreed price to the seller and (subject to the successful clearing of those funds) the handover of the keys and title documents to the buyer.
Be aware though that, if you fail to hand over any documents detailed in your Sale and Purchase Agreement, the buyer is within his rights to pull out, even at this late stage – so again, it is vital that the contract is drawn up in accordance with your circumstances and that you are fully transparent about what you are (and are not able) to provide.
While the Sale and Purchase Agreement sets out the terms of the sale, the final transfer of the boat is handled by means of a Bill of Sale. This can often be as simple as a signed, witnessed and dated document with basic details of the seller, the buyer, the boat and the agreed purchase price, but it remains a vital completion document. Again, standard templates are available from the RYA but if the value of the boat is particularly high or the boat and its equipment is particularly complex, it may be prudent to appoint a marine lawyer to help draft a satisfactory document. All that then remains is for the buyer to transfer the title into his own name or to have the boat put on the register.

Get professional input

If you want a faster, more reassuring completion with reduced effort, you have several options. You could appoint an experienced marine lawyer to handle the paperwork and act on your behalf; you could appoint a yacht management company to handle the entire sales process, as many of them have their own in-house legal departments; or you could take advantage of the RYA’s marine expertise by paying a minor fee (£39) to become a member. You can then download their ‘Buying and Selling Pack’, which includes comprehensive templates for the Sale and Purchase Agreement and the Bill of Sale, as well as a Step-by-Step Guide to Buying and Selling.

Adopt the right mindset

Closing a boat sale is not simply about taking the buyer’s money and protecting yourself from legal repercussions. It’s about anticipating the buyer’s doubts and giving him the knowledge and the confidence to feel good about signing on the dotted line, transferring the funds and completing the deal. Keep your marketing honest, your documents portfolio complete and your pricing realistic and, subject to the completion of the necessary sea trial and survey and the signing of a mutually satisfactory Bill of Sale, you will maximise your chances of your buyer remaining committed to the deal right through to the point of completion.



Alex Smith is an ex-Naval officer, with extensive experience as a marine journalist, boat tester and magazine editor. Having raced as a Pilot in the National Thundercat Series and as a Navigator in the inaugural Red Sea RIB Rally, he has now settled in the West Country, where he lives and works as a specialist marine writer and photographer from his narrowboat in Bath.