Yacht Purchase & Sale Lawyers

Experienced legal counsel for yacht transactions in New York and beyond.

Our Yacht Purchase & Sale Practice

At Albert Goodwin, we provide comprehensive legal services for yacht purchase and sale transactions in New York and beyond. Our deep understanding of maritime law and yacht transactions allows us to deliver exceptional legal counsel throughout the entire process.

Whether you're a first-time buyer, an experienced yacht owner looking to upgrade, or a seller seeking to ensure a smooth transaction, our team provides the professional guidance you need to protect your interests and navigate the complex legal aspects of yacht transactions.

We combine knowledge of maritime regulations with understanding of New York-specific legal requirements, ensuring thorough protection for your maritime investments from contract negotiation through closing.

List of Services

• Purchase and Sale Agreement Drafting & Review
• Due Diligence & Title Searches
• Escrow Arrangements
• Closing Preparation & Representation
• Maritime Lien Resolution

Our Yacht Purchase & Sale Services

Contract Drafting & Negotiation

We draft and negotiate comprehensive purchase and sale agreements tailored to your specific transaction. Our contracts address key issues including vessel condition, equipment inclusion, survey contingencies, deposit terms, and closing conditions to protect your interests.

Due Diligence & Title Search

We conduct thorough due diligence to uncover any potential issues before purchase. This includes comprehensive title searches to identify liens, encumbrances, or ownership disputes, review of maintenance records, and verification of compliance with regulatory requirements.

Escrow Services

We establish secure escrow arrangements to protect buyer deposits and ensure funds are properly handled throughout the transaction. Our escrow services include drafting clear terms for release conditions and dispute resolution procedures.

Closing Preparation & Representation

We prepare all necessary closing documents including bill of sale, warranty provisions, and transfer instruments. Our attorneys represent you at closing to ensure all legal requirements are met and your interests are protected throughout the final transaction.

Common Yacht Purchase & Sale Scenarios

First-Time Yacht Buyers

First-time yacht buyers face unique challenges navigating the complex purchase process. We provide education on the yacht purchase process, guidance on survey and sea trial contingencies, explanation of ownership structures and tax implications, and coordination with marine surveyors and financing.

High-Value Yacht Transactions

High-value yacht transactions require focused legal knowledge to address complex issues including sophisticated ownership structures for liability protection, advanced tax planning strategies, complex financing arrangements, and international registration considerations.

What to Expect in a Yacht Transaction

A yacht purchase or sale is more than a marine version of a real estate closing. The vessel moves between jurisdictions, may be flagged in a foreign country, can carry maritime liens that travel with the boat regardless of who owns it, and operates in a regulatory environment that includes the U.S. Coast Guard, state taxing authorities, the Federal Communications Commission, and, for larger vessels, agencies of foreign governments. A typical yacht transaction in New York moves through several distinct phases, each with its own legal milestones.

The Letter of Intent and Initial Deposit

Most transactions begin with a letter of intent or offer to purchase that outlines the price, the proposed closing date, the inclusions (tenders, electronics, navigation equipment, water toys), and the contingencies. A modest deposit, typically 10 percent, accompanies the offer and goes into escrow. The letter of intent generally is binding only as to confidentiality, exclusivity, and choice of law; the deal terms themselves are negotiated in the definitive purchase and sale agreement.

Survey and Sea Trial

Before closing, the buyer typically conducts a marine survey and a sea trial. A SAMS-accredited or NAMS-accredited marine surveyor performs an out-of-water inspection (vessel hauled at a marina or boatyard), an in-water inspection, an engine survey (often by a separate engine surveyor for larger yachts), and a sea trial during which the boat is operated under the buyer's surveyor's supervision. The purchase agreement should specify the buyer's right to accept the vessel, reject it, or accept it subject to a price adjustment based on the survey findings. The clock for these decisions matters: the buyer who fails to make a timely decision is typically deemed to have accepted the vessel.

Title and Lien Searches

Vessels documented with the U.S. Coast Guard have a federal title record that can be searched through the National Vessel Documentation Center. State-titled vessels show up in state DMV-equivalent records. Liens against a documented vessel are recorded with the NVDC; liens against state-titled boats are recorded in state systems. Maritime liens, however, are a different and more elusive category. Under federal maritime law, certain claims — including for services and supplies furnished to the vessel — attach to the vessel itself without recording. A buyer who closes without a thorough lien investigation risks taking the boat subject to liens the seller never disclosed. We coordinate searches, obtain abstracts of title, and require seller affidavits and indemnities at closing.

Documentation and Registration

Most yachts above five net tons are eligible to be U.S. Coast Guard documented, and documentation is often preferable to state titling for larger vessels because of the federal certificate of documentation, the eligibility for preferred ship mortgages, and the ease of international travel. The documentation process requires the deletion of the seller's certificate and the issuance of a new certificate in the buyer's name. State titled boats require a transfer of title through the appropriate state agency. The choice between documentation and state titling has significant tax, financing, and operational consequences.

Sales and Use Tax

New York sales and use tax on yacht purchases is one of the most significant cost items in a transaction. New York imposes sales tax on the first $230,000 of the purchase price, with use tax applying when the boat is brought into New York after a purchase elsewhere. Several states offer exemptions, caps, or planning opportunities, and many buyers structure their purchases through Delaware, Rhode Island, or other jurisdictions with more favorable tax regimes. We work with tax counsel and yacht brokers to identify the structure that fits the buyer's intended use of the vessel.

Financing and Preferred Ship Mortgages

Most yacht acquisitions above a modest size are financed. Marine lenders offer specialized financing products, often secured by a preferred ship mortgage on a documented vessel. Preferred ship mortgages, recorded with the NVDC, give the lender priority over later maritime claims. The financing documents include the promissory note, the preferred ship mortgage, the assignment of insurance proceeds, the assignment of charter income (for vessels available for charter), and typically a personal guaranty from the owner of the borrowing entity. Loan terms are often longer than for cars but shorter than for real estate, with rates that vary by vessel age and loan size.

Insurance Considerations

Yacht insurance is its own specialized line. Standard policies cover hull and machinery, protection and indemnity (liability), towing, salvage, and pollution. Geographic navigation limits matter: a Caribbean coverage rider may be required for winter cruising, and a transatlantic crossing usually requires special arrangements. Lenders require evidence of insurance with a named loss payee. Buyers should secure insurance binders before closing.

Ownership Structures

For higher-value yachts, owners frequently hold the vessel through a single-purpose LLC. The LLC structure can provide liability protection, simplify ownership of the boat by multiple family members or investors, facilitate sale or transfer, and allow charter operations to be conducted at arm's length. For very large yachts, foreign flagging through a flag state such as the Cayman Islands, the Marshall Islands, or Malta can offer regulatory and tax advantages, though each flag has its own substantive requirements and ongoing compliance obligations.

Closing the Transaction

At closing, the parties exchange the bill of sale, the seller's affidavit confirming no undisclosed liens, the deletion of the seller's certificate of documentation, an application for the buyer's new documentation, payment of the balance of the purchase price, payment of state sales or use tax (or evidence of exemption), and final transfer of keys, manuals, equipment lists, and inventory. The buyer typically takes physical possession of the vessel at closing or shortly thereafter, with delivery often occurring at a designated marina.

Brokerage Commissions and Escrow

Most yacht transactions involve one or more brokers, and brokerage commissions can be substantial. The Yacht Brokers Association of America (YBAA) has model agreements widely used in the industry. The commission is typically split between the listing broker and the selling broker and is paid out of the seller's proceeds at closing. Disputes over commission entitlement arise when a buyer engages multiple brokers, when a listing expires before sale, or when off-market introductions blur the lines. We review brokerage agreements and structure closing instructions to avoid commission disputes.

Common Disputes After Closing

Even careful transactions sometimes lead to disputes after closing. Common issues include undisclosed defects discovered after delivery, equipment that was promised but not delivered, post-sale lien claims by maritime creditors, brokerage commission disputes between sellers and brokers, and tax assessment disputes with state agencies. The purchase agreement, the survey report, the bill of sale, and the seller's affidavits all become important evidence in any post-closing dispute. Cases that look messy are often resolved quickly when the underlying paperwork is solid.

Contact Us

Contact the Law Offices of Albert Goodwin to discuss your yacht purchase and sale needs. We offer consultations to discuss your specific situation and how we can assist you.

You can contact us by phone at 212-233-1233 or by email at [email protected].