Boat transactions guide: everything you need to know when buying or selling a boat

You should confirm that the seller can provide a clear chain of ownership through Bills of Sale. You should also check that the boat is free from any mortgages and finance, review whether the boat is registered and the VAT status. During the transaction, a survey and sea trial should occur to identify any defects.

Legal advice is helpful in order to ascertain the ownership, VAT status, registration and finance arrangements. The lawyer can also draft a clear and accurate sale and purchase agreement ensuring that the correct documents are exchanged on completion and giving recourse if there are defects.

It should set out the purchase price, deposit arrangements, survey and sea trial provisions, completion mechanics and VAT considerations. The agreement should also set out the inventory, ownership warranties and the documents provided on completion. It will reduce uncertainty and minimise the risk of disputes.

The terms of the agreement will set out the options that the buyer has. A well-drafted agreement might enable the buyer to be able to proceed with the purchase, negotiate a price reduction, require repairs to be carried out before completion to rectify the defects, or withdraw from the transaction.

You should ensure you can produce ownership documents, registration certificates and VAT records. You should also prepare a clear inventory and resolve registration or documentation issues (particularly any missing Bills of Sale).

You will need a Bill of Sale to transfer. Buyers also might need registration certificates and should see historic Bills of Sale, VAT documentation, builder’s certificates and an agreed inventory.

Common issues are ownership issues, missing documentation, a dispute arising following the survey or VAT concerns. Poorly documented agreements will also cause issues. Many of these are avoided through early preparation and clear legal advice.