I just agreed to buy a boat in Italy. Now what do I do?

[Dogone]

I went over last week to check her out. Lovely and after a week of haggling we have a deal. The owner is an Italian individual I am told, but reading between the lines family are involved financially, maybe a company, we will see. Registration and other docs not seen yet. She is registered in Malta, VAT paid.

The broker is an Italian ltd company and I suspect not too substantial financially, I need to get the accounts if they are to get any money. Not sure about that though. He wants me to sign and Italian Ship & Yacht Brokers Association memorandum of agreement with deadlines for survey, technical testing, sea trial and completion. He wants me to send him a 10% deposit. It's quite a lot and I'm uncomfortable.

I need an Italian, probably a boat lawyer to hold my hand. I need to be sure about getting the deposit returned immediately if it needs to be under very clear conditions. Escrow or an independent strong intermediary to do that job would be better if possible. Better would be no deposit, but I also want the vendor to be tied in, so I don't get gazumped, so it may have to be done somehow.

Has anyone any suggestions of people who can help. Lawyers, surveyors, also tips on the Italian system and how things work there, or any other advice that may be relevant.

 

[Portofino]

Too piccy and you will end up losing the boat .

Have you test driven it ? By which seen if it reached rated rpms at WOT ? That’s a good start before agreeing to buy any motorboat .

You should have seen the reg doc it used to be a blue book kept on board at all times it’s got who or what entity owns it written in it . Ought to have agreed to view ( ie travel all that way ) on condition of sight of the reg doc , or at least seen a copy ( email ) of the first page the ownership details before stepping on a plane .

Trust your gut feeling with the broker . We have never met the guy or know the set up so can’t comment

Plenty of threads on here about buying in Italy its pretty simple .

Ask to see a copy of the reg doc first , ideally it needs to be privately owned .If it’s company owned it might be financed so a finance Co might be listed in the reg doc ? That finance needs , the balance and any redemption fees paying off .
Problem is cash flow .Depending on the amount your deposit might be used ?
Matese flag was used for a vat concession back in the day for leased finance Co owned boats .

As said you should have gotten all this stuff very early on before arranging a viewing .

It s all do able unraveling it btw . There has to be an element of trust on your behalf and offer of a contract is a good start .Are there t+c s in that re rejection and returning the deposit ?

The only other tip I can offer is if the sale transpires simultaneously try and get it on the U.K. SSR ( assume you are a UK )
Turn up with red ensign and decals at the hand over plus a hair dryer .
A the first opportunity remove the current reg decals ( if any ? ) and put the SSR on + fly the red ensign .

Also be aware if “ family “ are involved at some stage assuming you go with the flow sign the contract pay the broker the deposit ( covers his fees they like that and ties everyone in ) you will be highly likely asked to send some of the balance to individual family members not necessarily to same brokers account you used for the deposit .Find this out asap .

Otherwise a stuffy legal person ( if end up going down that route ) might advise against this sending money to family members
Have you told the broker about your plan to get all legal and lawyer up , escrow accounts etc etc ? I would find out if they , the other side are amenable to this route .

It’s possible if you spring this lawyer up stuff on them they will find another buyer .

You need to find out first there reaction by telling the other side what your plans are before proceeding .

The broker normally deals with the De registration and you have to negotiate his fee for this inc any disbursements .
Apologies if you have already had this conversation you didn’t say ^ .His broker fee too , your side is up for negotiation and what method(s) he prefers paying , that ought to have been ironed out over lunch / meal after the viewing.

Where are you planning to keep it ?
What manufacturer is it btw so we can assess its survey risk?who built it ?

 

[petem]

You're right to be wary and wouldn't be the first person here to lose your deposit when buying from Italy. Also be aware that the Italian broker will charge you some commission for the purchase.

I would use a UK lawyer who understands the Italian process. Someone like Superyacht Consultancy | Ward & McKenzie (Yacht Consultants) Limited.

 

[DAW]

The broker is an Italian ltd company and I suspect not too substantial financially, I need to get the accounts if they are to get any money. Not sure about that though. He wants me to sign and Italian Ship & Yacht Brokers Association memorandum of agreement with deadlines for survey, technical testing, sea trial and completion. He wants me to send him a 10% deposit. It's quite a lot and I'm uncomfortable.

I need an Italian, probably a boat lawyer to hold my hand. I need to be sure about getting the deposit returned immediately if it needs to be under very clear conditions. Escrow or an independent strong intermediary to do that job would be better if possible. Better would be no deposit, but I also want the vendor to be tied in, so I don't get gazumped, so it may have to be done somehow.

Most of the larger brokers use the MYBA (Mediterranean Yacht Brokers Association) contract, which seems to be the industry standard and is drafted in English. A properly registered broker (whether ISYBA or MYBA) should have a separate account for holding client funds and should be willing to demonstrate this to you.

For my first purchase in France, I used a UK-based marine lawyer who proposed lots of modifications to the basic MYBA agreement, almost all of which were accepted by the seller and his broker. I incorporated these changes in all of my subsequent purchases. In my experience, if you have an eager seller, a fair price and are making reasonable requests, the agreement can usually be negotiated.

Under any of these agreements, you need to very clearly understand what rights you have to reject the vessel and request the return of your deposit. The agreements generally assume you have conducted an initial inspection, are happy with the overall condition of the vessel and have decided to proceed with its purchase. Once the contract is signed, the vessel can only be rejected under certain specific circumstances, such as if it doesn't perform satisfactorily or in line with expectations during the sea trial, or if material defects affecting operational integrity and seaworthiness are discovered during the condition survey by a qualified surveyor and the seller is not willing to remedy them. You can't simply change your mind because you don't like what you find.

You almost certainly won't be allowed to do a sea trial or condition survey without a signed contract, so you have to make some commitment (including whatever you can agree on the deposit), but once the contract is signed, you can't be gazumped.

Finally ... Don't underestimate the importance of obtaining complete documentation proving ownership of the vessel, its registration and VAT status and completion of any deregistration formalities. Many owners struggle to provide all of the required documentation and brokers keen to complete a sale and take their commission are often dismissive of requests from the buyer. If you don't sort this out prior to completion, you will have difficulties later. My advice would be to include delivery of a specific list of documents as a condition to completion of the sale.

 

[petem]

Most of the larger brokers use the MYBA (Mediterranean Yacht Brokers Association) contract, which seems to be the industry standard and is drafted in English. A properly registered broker (whether ISYBA or MYBA) should have a separate account for holding client funds and should be willing to demonstrate this to you.

For my first purchase in France, I used a UK-based marine lawyer who proposed lots of modifications to the basic MYBA agreement, almost all of which were accepted by the seller and his broker. I incorporated these changes in all of my subsequent purchases. In my experience, if you have an eager seller, a fair price and are making reasonable requests, the agreement can usually be negotiated.

Under any of these agreements, you need to very clearly understand what rights you have to reject the vessel and request the return of your deposit. The agreements generally assume you have conducted an initial inspection, are happy with the overall condition of the vessel and have decided to proceed with its purchase. Once the contract is signed, the vessel can only be rejected under certain specific circumstances, such as if it doesn't perform satisfactorily or in line with expectations during the sea trial, or if material defects affecting operational integrity and seaworthiness are discovered during the condition survey by a qualified surveyor and the seller is not willing to remedy them. You can't simply change your mind because you don't like what you find.

You almost certainly won't be allowed to do a sea trial or condition survey without a signed contract, so you have to make some commitment (including whatever you can agree on the deposit), but once the contract is signed, you can't be gazumped.

Finally ... Don't underestimate the importance of obtaining complete documentation proving ownership of the vessel, its registration and VAT status and completion of any deregistration formalities. Many owners struggle to provide all of the required documentation and brokers keen to complete a sale and take their commission are often dismissive of requests from the buyer. If you don't sort this out prior to completion, you will have difficulties later. My advice would be to include delivery of a specific list of documents as a condition to completion of the sale.

Excellent advice.

Personally, I wouldn't pay a penny to anyone until I have seen evidence that the service history and registration documentation actually exist. If they refuse to proof of these before placing the deposit then walk away. Do not be fobbed off by excuses like "the owner is on holiday", "owner does his own servicing", "the dog ate them and we're requesting duplicates", etc. There's a lot of boats out there where maintenance has been skipped or bills were paid in cash so no invoices exist. And brokers will get you emotionally and financially attached to the boat before confessing to the absence of documentation.

Also, bear in mind that if things go wrong (like a difference in opinion of what is a material defect that warrants the return of the deposit) then you will have to recover the deposit via the Italian courts. Unless you're willing to go through that pain then you'll have to write the deposit off.

 

[lusitano]

Ditto to all the above sound advice. I would also add that if the boat is family owned ALL part owners must sign the BOS.
Many a property purchase in southern Europe has ended in disaster, due to an "uninformed" family member/part owner showing up after money has changed hands and a deal has been done.

 

[Dogone]

Too piccy and you will end up losing the boat .

Have you test driven it ? By which seen if it reached rated rpms at WOT ? That’s a good start before agreeing to buy any motorboat .

You should have seen the reg doc it used to be a blue book kept on board at all times it’s got who or what entity owns it written in it . Ought to have agreed to view ( ie travel all that way ) on condition of sight of the reg doc , or at least seen a copy ( email ) of the first page the ownership details before stepping on a plane .

Trust your gut feeling with the broker . We have never met the guy or know the set up so can’t comment

Plenty of threads on here about buying in Italy its pretty simple .

Ask to see a copy of the reg doc first , ideally it needs to be privately owned .If it’s company owned it might be financed so a finance Co might be listed in the reg doc ? That finance needs , the balance and any redemption fees paying off .
Problem is cash flow .Depending on the amount your deposit might be used ?
Matese flag was used for a vat concession back in the day for leased finance Co owned boats .

As said you should have gotten all this stuff very early on before arranging a viewing .

It s all do able unraveling it btw . There has to be an element of trust on your behalf and offer of a contract is a good start .Are there t+c s in that re rejection and returning the deposit ?

The only other tip I can offer is if the sale transpires simultaneously try and get it on the U.K. SSR ( assume you are a UK )
Turn up with red ensign and decals at the hand over plus a hair dryer .
A the first opportunity remove the current reg decals ( if any ? ) and put the SSR on + fly the red ensign .

Also be aware if “ family “ are involved at some stage assuming you go with the flow sign the contract pay the broker the deposit ( covers his fees they like that and ties everyone in ) you will be highly likely asked to send some of the balance to individual family members not necessarily to same brokers account you used for the deposit .Find this out asap .

Otherwise a stuffy legal person ( if end up going down that route ) might advise against this sending money to family members
Have you told the broker about your plan to get all legal and lawyer up , escrow accounts etc etc ? I would find out if they , the other side are amenable to this route .

It’s possible if you spring this lawyer up stuff on them they will find another buyer .

You need to find out first there reaction by telling the other side what your plans are before proceeding .

The broker normally deals with the De registration and you have to negotiate his fee for this inc any disbursements .
Apologies if you have already had this conversation you didn’t say ^ .His broker fee too , your side is up for negotiation and what method(s) he prefers paying , that ought to have been ironed out over lunch / meal after the viewing.

Where are you planning to keep it ?
What manufacturer is it btw so we can assess its survey risk?who built it ?

Thanks.

Sure, I might lose the boat, but I like to be cautious yet to be as practical as I can be. If they are scared off by lawyers, then it's a bad sign and I'm best outa here.

I can see the SSR idea might frustrate legalities if a hidden creditor emerged, but I suppose it is best to be out of Italy as well as boats can be seized and liens pursued regardless of flag in the country.

I would have thought a transfer of registration to me with the same registry would be administratively the simplest and fastest thing to do. All the better if it could be simultaneously done. (Though my previous experience with Bermuda didn't work that efficiently).

I have agreed brokerage fees. It's in the price and the vendor is responsible for them. Not for de-registration fees though. That is a good point I will try to settle. It shouldn't be much, but best to not assume.

I plan to keep in the Med, Italy to start with, but it's a boat, it won't stay still and if you don't mind I'll keep more details about it quiet for now as things are sensitive.

 

[Dogone]

You're right to be wary and wouldn't be the first person here to lose your deposit when buying from Italy. Also be aware that the Italian broker will charge you some commission for the purchase.

I would use a UK lawyer who understands the Italian process. Someone like Superyacht Consultancy | Ward & McKenzie (Yacht Consultants) Limited.

Thanks. Have you personal experience with these people?

 

[Dogone]

Most of the larger brokers use the MYBA (Mediterranean Yacht Brokers Association) contract, which seems to be the industry standard and is drafted in English. A properly registered broker (whether ISYBA or MYBA) should have a separate account for holding client funds and should be willing to demonstrate this to you.

For my first purchase in France, I used a UK-based marine lawyer who proposed lots of modifications to the basic MYBA agreement, almost all of which were accepted by the seller and his broker. I incorporated these changes in all of my subsequent purchases. In my experience, if you have an eager seller, a fair price and are making reasonable requests, the agreement can usually be negotiated.

Under any of these agreements, you need to very clearly understand what rights you have to reject the vessel and request the return of your deposit. The agreements generally assume you have conducted an initial inspection, are happy with the overall condition of the vessel and have decided to proceed with its purchase. Once the contract is signed, the vessel can only be rejected under certain specific circumstances, such as if it doesn't perform satisfactorily or in line with expectations during the sea trial, or if material defects affecting operational integrity and seaworthiness are discovered during the condition survey by a qualified surveyor and the seller is not willing to remedy them. You can't simply change your mind because you don't like what you find.

You almost certainly won't be allowed to do a sea trial or condition survey without a signed contract, so you have to make some commitment (including whatever you can agree on the deposit), but once the contract is signed, you can't be gazumped.

Finally ... Don't underestimate the importance of obtaining complete documentation proving ownership of the vessel, its registration and VAT status and completion of any deregistration formalities. Many owners struggle to provide all of the required documentation and brokers keen to complete a sale and take their commission are often dismissive of requests from the buyer. If you don't sort this out prior to completion, you will have difficulties later. My advice would be to include delivery of a specific list of documents as a condition to completion of the sale.

Thanks for that.

I like the suggestion of a more Internationally established contract. I will check it out. Ideal would be if it were based under UK law, where I understand the principles considerably better. I'll see if that can be done.

Do you have a UK lawyer you can mention?

Agreed on the clear terms under which the deposit is to be returned. I will not take a step until that issue is bullet (lawyer) proof.

Great advice re proving title and VAT and documents. It would be my intention to ensure full clear title is provided and de-registration is completed and a proof and statement from the vendor regarding outstanding debts being cleared is given on completion. I will get the registration and VAT documents now as a first step. I don't want to even sign the contract and pay the deposit until everything but the survey, NDT examination and sea trial are done.

 

[Dogone]

Excellent advice.

Personally, I wouldn't pay a penny to anyone until I have seen evidence that the service history and registration documentation actually exist. If they refuse to proof of these before placing the deposit then walk away. Do not be fobbed off by excuses like "the owner is on holiday", "owner does his own servicing", "the dog ate them and we're requesting duplicates", etc. There's a lot of boats out there where maintenance has been skipped or bills were paid in cash so no invoices exist. And brokers will get you emotionally and financially attached to the boat before confessing to the absence of documentation.

Also, bear in mind that if things go wrong (like a difference in opinion of what is a material defect that warrants the return of the deposit) then you will have to recover the deposit via the Italian courts. Unless you're willing to go through that pain then you'll have to write the deposit off.

Thanks again. The documents tip is good advice.

One document I have asked for twice and not got yet is a statement from the owner, his skipper and the broker to list all known repairs, either under his or under the first ownership with copies of all invoices and survey reports done. All I got so far was a statement from the insurers to say there are 2 years of no-claims. I'm not happy with that. It's feeling like a fob off.

Yes, material defect is too nebulous a condition for refusal. I will be trying for another form of words. I will start with 'to my satisfaction' . It ought to be acceptable as it is hard to put any other condition on a sea trial that are anything but totally subjective. Motion, handling, noise, vibration, my judgement on smoke condition all should be valid reasons for wanting to pull out with an immediate return of deposit.

I agree. Avoiding years in the Italian courts is a high priority objective as well as protecting my deposit. That said, I want the thing if it's as good as it seems to be.

 

[petem]

Thanks. Have you personal experience with these people?

Yes, and it was an aborted sale too.

 

[petem]

Yes, material defect is too nebulous a condition for refusal. I will be trying for another form of words. I will start with 'to my satisfaction' . It ought to be acceptable as it is hard to put any other condition on a sea trial that are anything but totally subjective. Motion, handling, noise, vibration, my judgement on smoke condition all should be valid reasons for wanting to pull out with an immediate return of deposit.

You need to able to cancel the purchase at your absolute discretion.

Ideally, you should already know how the model of boat handles / noise / motion etc but it's a catch 22 that nobody will let you have a sea trial unless you're willing to commit to a purchase.

 

[petem]

One document I have asked for twice and not got yet is a statement from the owner, his skipper and the broker to list all known repairs, either under his or under the first ownership with copies of all invoices and survey reports done. All I got so far was a statement from the insurers to say there are 2 years of no-claims. I'm not happy with that. It's feeling like a fob off.

Sounds like the bullshit has started already!

Diligent owners have all their documentation in a folder. And even those who aren't that diligent would collate everything before putting the boat on the market.

Incidentally, why not three or more years of "no claims"? What happened three years ago?

 

[Dogone]

Sounds like the bullshit has started already!

Diligent owners have all their documentation in a folder. And even those who aren't that diligent would collate everything before putting the boat on the market.

Incidentally, why not three or more years of "no claims"? What happened three years ago?

Yes. I have pressed on this again. We'll see. I will be digging my heels in.

The boat is 7 years old. The current broker sold it to the new owner who has owned it only 2 years, so that's why insurance documents are only for that period. So only 2 years clear knowledge, but there may be inherited documents and surveys and knowledge and I want a declaration of anything they know about. This is what you get if you buy a property a boat should require even more due dilligence.

 

[Sticky Fingers]

Making interesting reading. I'm currently looking at (ie, thinking about) buying my next boat in the EU as an "EU-VAT-paid and keep it there" affair. The experience described by @Dogone and the caveats posted by my learned colleagues make me wonder if that's entirely as simple as it seemed on paper ....

 

[Sticky Fingers]

Yes. I have pressed on this again. We'll see. I will be digging my heels in.

The boat is 7 years old. The current broker sold it to the new owner who has owned it only 2 years, so that's why insurance documents are only for that period. So only 2 years clear knowledge, but there may be inherited documents and surveys and knowledge and I want a declaration of anything they know about. This is what you get if you buy a property a boat should require even more due dilligence.

Be useful to know what quantum of risk is in play here (approx size, price or whatever).

 

[ChromeDome]

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[Dogone]

Be useful to know what quantum of risk is in play here (approx size, price or whatever).

A seven figure sum.

 

[Sticky Fingers]

A seven figure sum.

Right. That puts it in sharp relief!

 

[Portofino]

You need to able to cancel the purchase at your absolute discretion.

Ideally, you should already know how the model of boat handles / noise / motion etc but it's a catch 22 that nobody will let you have a sea trial unless you're willing to commit to a purchase.

I have had plenty of test drives under no obligation.Even offered to fund diesel , which has always been refused .
Sof and in Italy with none Eng brokers and locally owned boats ie none Brits .

On the sale of my S / Skr by a French broker under MYBA contract I let 3 interested parties go out for a jolly / test in it .
The broker accompanying them helming .I wasn’t present ( broker made to earn his crust ) He did ask first and I saw no reason not to adopt this strategy.
A good broker can qualify a serious prospect .

The Med guys are more relaxed much more and can see this chicken / egg thing .

One notable example slammed too much in not very big waves ( for the size a 52 ) the look on the wife’s face killed any further sale .
Another was deemed too big , rode ok etc etc it was its physicality .I ought to have pre guessed , pre figured that out I know before helming it .But because it was just that a test drive best to know now with zero obligation.
We did let the same broker that day show us 3 others a bit smaller , but declined any more test drives of said three as they weren’t our cup of tea .

I can’t see how you can write up unconditional or “ absolute discretion “ to walk away and refund a deposit , if a deposit suppose to prevent gazumping .

A lot depends on how long it’s been on the mkt , how much interest the broker is getting with its listing , how saleable it is .ie How wide it’s potential customer base it has , and obviously how it’s priced compared to other examples or indeed how rare it is .
Only the op knows all this .This dictates the speed he has to act and level of risk he has to absorb , otherwise he will lose it to another buyer MORE willing to go with the flow follow the brokers lead .