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July 4th 2018. By Alex Smith.

Buying a boat abroad

If you want to buy your next boat abroad, there are some important steps you should consider.

Buying a boat abroad has plenty of appeal. The price is of course a key motivator, but so is the sheer variety of new and used boats. After all, in order to maintain a sustainable long-term profit, British dealers tend to stock boats that reflect the more conservative requirements of mainstream UK demand. Inevitably then, there are a great many brands and models in countries like Holland, France and Spain that are not commercially imported into the UK, so if you go shopping overseas, you open up a range of boats that can be tailored to your personal needs, rather than to those of the broader UK market.
Notwithstanding the widespread prevalence of UV damage on ageing boats in Mediterranean regions, recreational boats on the continent are often higher spec and better maintained. That’s partly because drier climates are gentler on boats; and partly because more highly developed tourist industries and more active charter markets see boats given more frequent attention than those in the UK. Whether we like to admit it or not, our weather, our limited annual holidays, our lofty fuel prices and our tendency to work eight days a week means we often struggle to use our boats as often as recreational users elsewhere.
Little surprise then that the vast majority of people who buy a boat abroad would happily do it again. With the right approach, you can end up with a high-spec boat in great condition that stands out from the crowd – and all for less money than you might have paid in the UK. However, as with any boat purchase, you need to maximise your chances of success by being prepared and staying protected…

If you want to buy your next boat abroad, there are some important steps you should consider.

Title and finance

The process of buying a boat from a private seller is much the same wherever you do it. The key difference when buying abroad is simply the increased potential cost of getting it wrong – and central to that are the basic issues of ownership and finance. The seller needs to be the proven owner of the boat and in a legitimate position to sell it, which means free from outstanding financial encumbrances of any kind. If there are encumbrances (for instance, an outstanding loan against the boat or unpaid bills with a creditor for marine services), they need to be openly discussed in the presence of the creditor and the contract needs to encompass a specific plan for their settlement.
Either way, the more documentation the seller can provide, the better. In the UK, you would look for the original receipts, recent bills of sale and registration documents. But of course, each European jurisdiction has its own way of operating, so you need to work out which documents a given Registrar will be able to show you and how valid they are as proof of title. The degree of security provided by the information on offer from a given registry also varies, so it is always best to assume that you are fully responsible for whatever it is you buy and take every step to satisfy yourself, with signed testimony from the seller, that both the title and financial circumstances of a boat are sound.

VAT status

One of the main difficulties in buying abroad is understanding the nature of a jurisdiction’s taxes and duties and securing proof that all have been paid – and VAT in particular is an issue that needs absolute certainty. If you proceed with a boat purchase without proof, you may find yourself liable for the VAT bill on the basis of the boat’s current market value so, ideally, the seller should be able to provide the original VAT invoice or evidence that the boat is VAT-exempt. This is an issue that should be raised at the very outset and if the seller can’t provide conclusive proof of the boat’s VAT status, the price should be revised to enable you to pay the VAT should it be required post-completion.

RCD status

Whether new or used, a leisure boat of between 2.5 and 24 metres in length, built or put into service within the EU after 16 June 1998, needs to be CE-marked to certify compliance with the safety requirements of the Recreational Craft Directive. The boat should have a CE compliance plate, plus a written Declaration of Conformity to verify compliance. Recreational craft built or put into service within the EU before 16 June 1998 are exempt from the requirements of the RCD, but if later boats do not comply with the RCD, you need to see evidence of a legitimate exemption in accordance with the terms of the Directive. There is a process available to allow a buyer to put an imported boat through RCD compliance if necessary, but this can be costly and complicated.
Similarly, the necessity for freight, import duty and VAT can prove very costly if you intend to buy a boat from outside of the EU – and bringing a boat into formal compliance with EU regulations can also add a great deal of complexity. A boat must comply with CE requirements and the Recreational Craft Directive (RCD) and that tends to involve an assessment by a third party certification agency. So while the canny buyer can still make savings on a boat purchase from a place like America’s east coast, it makes more sense for most of us to explore the options available on the European market.

English language, English law

When buying a boat abroad, new or used, through a broker or from a private seller, you’re going to need a contract. This lays down in writing the parameters of the sale and is to be agreed upon and signed by both parties. It should specifically include written confirmation that the owner of the boat is in a legitimate position to sell and that there is no outstanding finance against the boat. It should also provide specific details of the boat, as well as an inventory of what is included in the sale, including a list of documents that will be provided upon completion, pertaining to the ownership, finance, repair and maintenance of the boat. It should also state the agreed price with an explicit proviso that the price remains dependent upon the completion of a survey, an engine assessment and a sea trial.
However, unless you’re an international lawyer with authentic fluency in the local language, it’s vital that you insist upon a contract that is accurately translated into English and bound by English law. It’s by no means an outlandish request and it will guarantee that, in the event of a post-completion dispute, you are able to pursue your claim with the same degree of traction and clarity as a domestic boat buyer. The vast majority of brokers will expect this kind of condition and you should secure the explicit consent of the vendor over this before agreeing to proceed.
The application of an English contract overseen by English law will help no end when you come to sell your boat to a UK buyer; and it will also enable you to use the RYA’s standard contract (which is limited to England and Wales) rather than paying a lawyer to draw up an entirely bespoke contract in accordance with the seller’s wishes and the requirements of that country’s legal system.

Raising the money

Using a UK lender to raise money for the purchase of a boat in a foreign nation is neither rare nor unusually complicated. As with domestic loans, specialist providers will offer finance against the proven value of the boat itself and, as a minimum, that will require a survey report allied to formal listing of the provider’s interest in your insurance policy. However, if you source an unsecured private loan or take out a loan against you house, you are free to spend the money as though you were a cash buyer, ridding yourself of the logistical complication, speeding up completion of the sale and often bringing about a greater potential loan amount, a longer term and a more affordable rate of monthly repayment.

Survey and sea trial

It always falls to the buyer to satisfy himself of the condition and value of a boat before committing to a purchase – so if it makes sense to commission a full pre-purchase survey report for a UK boat, it’s vital that you organise one for a boat overseas. In fact, the ‘Caveat Emptor’ principle (‘Buyer Beware’) is particularly relevant if you are buying a boat abroad, because the cost of a dispute across jurisdictional boundaries can be prohibitive, so if you want to buy a boat, bring it to the UK and get it registered here, it pays to pick an experienced UK surveyor who is affiliated to a recognised organisation like the YBDSA. You should also pick one with specialist experience in the type of boat you’re looking at – and if your surveyor and marine engineer are able to join you on the sea trial, all the better. When the time then comes to complete the deal at the revised or confirmed price, make sure that you receive all items documented in the Sale and Purchase Agreement and that you use an approved Bill of Sale to transfer title of the boat. If in any doubt about this, consider employing a marine lawyer to draft the appropriate document or contact the RYA’s in-house legal team for advice.

If your surveyor and marine engineer are able to join you on the sea trial, all the better.

Bringing your new boat home

If you want to trailer your boat to the UK, there is no need to register it, but if you plan to sail it back, UK registration is a lawful requirement. Perhaps the easiest solution here is if you specify in the contract that the owner will deliver the boat and complete the sale in the UK, enabling you to register the boat at your leisure. But more commonly, you need to do the legwork yourself – and there are various ways of doing that…
If the boat is registered in a foreign country, you will need to deregister it with the registry of that nation while still abroad, before registering it in the UK and then sailing her back. If the paperwork of a boat in a foreign country is incomplete, you can also apply for a Provisional Part I Registration, which enables you to bring it home before upgrading it to a full Part 1 Registration. And if you’re so inclined, you can also put your new boat on the Small Ships Register, bring it back to the UK and sort out the Part 1’s required tonnage measurement surveys at reduced cost once you get home.

Should you take the plunge?

There’s no need to be scared of buying abroad. You simply need to understand that a bargain price is often counterbalanced by expenses and logistical complications that you can’t legitimately avoid. For some, it may still be worth committing to a foreign purchase. For others, buying from a dealer, a broker or a private seller within a few miles of your house is altogether more valuable. But if you do decide to take the plunge, it is vital that you retain your perspective. There are thousands of boats around, so don’t become transfixed by one to the detriment of common sense. If you are not entirely satisfied that the boat is owned by the seller, that the tax is fully paid, that it is free of any encumbrances and that it is guaranteed as such by means of a signed document, governed under English law in accordance with the explicit consent of the seller, then you have two options. Either protect your interests and walk away or come to an agreement regarding price that properly reflects the boat’s imperfect circumstances.

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.