Buying a yacht in the Netherlands
Category: Buying a yacht
Blenheim Advocaten provides assistance with the legal aspects of a yacht transaction in the Netherlands. We provide maritime legal services to assure that the purchase of a yacht will be a good decision. Please do not hesitate to contact us if you would like assistance of a Dutch lawyer with the drafting or reviewing of a contract of sale for a yacht or for us to assist you with your process of due diligence in relation to the purchase of a yacht or construction of a yacht in the Netherlands.
Considerations before you sign a contract to purchase a yacht
There are a number of things to consider before deciding to purchase a yacht. The initial considerations for a buyer you in making your decision to buy a boat are to know what you want, be confident of your ability to assess the boat’s capacity to perform as required and to be sure that when you pay for the boat you get good title to it from the seller and value for the price paid. Especially if the Yacht is exported from the Netherlands it is important to handle the legal paperwork properly and seek assistance from a Dutch attorney. We also represent individuals purchasing or selling yachts and corporate bodies involved in (major) yacht construction contracts in the Netherlands.
The benefit of legal assistance of a Dutch lawyer when buying a Yacht in The Netherlands
Contracts of sale of a yacht we review will be modified where necessary to protect our client’s interests. The changes made may be subject to discussion with the Seller or Broker of the yacht. And while not all changes may be accepted by the seller the boat, the client will always be in a better position had the contracts not been amended by a Dutch attorney. The significant issue here is that many purchasers either don’t read or comprehend the contract or the contracts are purely for the benefit of the vendor and that it should be realized that contracts are negotiable instruments that should reflect the interests of all parties.
Duty to investigate the yacht under Dutch law
You should seek advice and a written report from an independent expert. These are often called Marine Surveys and Valuation Reports and are prepared (after inspection of the boat both in and out of the water) by accredited marine surveyors. Your insurer may also require a report of this nature prior to providing you with insurance cover.
If the Broker or Seller gives you a copy of a report about the boat it should be viewed as informative only. Similarly accepting a recommendation of a boat surveyor or inspector from the Seller’s broker or agent may not result in your obtaining a completely unbiased report. Make some enquiry if your surveyor has experience in the type of boat you are interested in. Get a fixed quote for the report that details what inspections are to be carried out.
Important topics in the inspection report
First you must find the right surveyor suitably qualified and having experience with the type of boat that you are interested in buying in the Netherlands. A surveyor’s report will provide some level of guarantee about the vessel since he will be legally liable for the costs of remedying any defects that he has negligently missed. Make sure the surveyor has professional indemnity insurance. Any material defects discovered in the surveyors report can be used to negotiate a reduction of the purchase price for repairs, or requesting seller to rectify matters at his own expense prior to completion of the contract. Preferably you should accompany the surveyor when the inspection is carried out. You should insist on a written survey report. You will be expected to pay for the report up front so make some enquiry about what you are going to get by way of report before you commit. It may be necessary to have a separate test or inspection done for major items like the boat’s engines. You will want an out of water inspection so that the inspector can ascertain the condition of the underwater parts of the hull. Seawater, wood, metal, and fiberglass can all coexist under water provided that adequate coatings are applied and the boat is regularly maintained. Failure to do so or lack of maintenance of the boat may cause electrolysis that can cause major damage to the hull structure and the boat’s fittings both above and below the water.
Disclaimers and exclusions in the survey under Dutch law
A survey is often expensive so it is important that you find out what you are going to get before you commit to a survey. If the report is full of comments to the effect that the inspector was not able to inspect certain areas of the vessel because of its fixed structures you should ask whether the areas affected are high risk areas. A competent surveyor should be able to advise you of any risk such inaccessible areas may contain.
Enquiries on title and registration of ship in the Netherlands
A Dutch ship may be registered in the Dutch Register (Kadaster). Upon transfer this registration may be deleted. The Buyer can decide to register the boating any other suitable jurisdiction. Only if the boat is registered the title of the boat for sale can be verified independently from the Seller. If the boat for sale is not registered then then Buyer depends fully on the information of the Seller. A security right may not be ‘visible’ in that case. The Seller however has a duty to inform the Buyer on all specific issues that are relevant to the Buyer to decide on the purchase of the boat. Ask the seller to produce documents of title showing the chain of ownership from when the boat was built to present time (paperwork should include building certificate and signed bill of sales). Ask for evidence of mooring fees paid, insurance documents and/or sailing club membership, boat yard invoices for any repairs.
Security on the yacht under Dutch law
The Seller may have taken out a loan to buy the boat that may remain outstanding and be secured by some sort of charge like your house mortgage. These are generally called ‘encumbrances’. There is no problem if this is so provided that at settlement the person or company having the benefit of the charge gives you a release to allow clear and unencumbered title to pass from the Seller to you. In case of a mortgage this will be registered in de Dutch Register and the sale should be conducted through a Dutch Notary who will take care of the transfer free of any encumbrances. Blenheim Advocaten can instruct a notary in the Netherlands to facilitate the transfer of the boat.
Conditions or terms in a boat sale contract under Dutch law
A contract of sale of a Yacht in the Netherlands will verily likely be under Dutch law. Some legal principles and terms may be quite different than other (European) countries. It is advisable to instruct a yachting lawyer to review the contract of sale before you sign it. The marine lawyers of Blenheim can advise you on this. Some of the terms in the contract of sale will be:
- Full description of the boat sold including registration number and an inventory of its gear and accessories; the boat may be registered in the Dutch Register (Kadaster)
- Price and deposit; terms of repayment of the deposit
- Subject to satisfactory inspection report; and subject to repair of deficiencies discovered in the Survey
- Subject to Buyer obtaining a satisfactory finance approval to complete the purchase (if required)
- Right to terminate and refund of deposit paid if finance refused or inspection report unsatisfactory
- Title and property will not pass until the price is paid in full, unless agreed otherwise
- Seller owns the boat and is able to sell to the Buyer
- Boat will be free of any encumbrance, maritime claims or charge on delivery and transfer
- Trials and protocol upon completion of trials and place of delivery
- Any warranties and/or disclaimers as to fitness and condition should be clearly stated
- Risk for loss or damage before transfer of the boat
- A choice of law clause an choice of dispute resolution.
In the case of a sale between non-professionals of an non-registered yacht, the seller must ensure the vessel for a period of 6 months for latent defects that may arise. This follows from Dutch law. Therefor it is also in the interest of the Seller to be aware of any (hidden) defects or deficiencies. In case a hidden defect is discovered within the period of six months the buyer can apply to the resolution of the operation or reduction in the price paid for the yacht. You may also be intersted to read this blog on yacht purchase.
More information on legal advice on buying a boat in The Netherlands
The lawyers of Blenheim have been providing Buyers from all over the world wishing to sell and buy recreational and commercial boats with advice of for many years.
If the purchase of a yacht in the Netherlands represents a substantial financial commitment it may be in your interests to minimize your risk if you seek and obtain professional legal and financial advice before committing to the purchase.
The issues that arise and the risks attendant on buying boats increase proportionately with the size and price of the boat.
Please contact Mark van Weeren if you have any questions relating to the purchase of a Yacht in The Netherlands.