How to buy a shareScroll for more
The purchase of a share in a yacht is almost as much about the people as it is the boat. Our experience shows us that shared ownership is nearly always successful. Like any good relationship it relies on give and take, sympathy for the other person’s desires and a general respect for each other and the shared asset.
It is important therefore that both the buyer, the seller, and the other owners are all comfortable that the change of ownership will not alter the harmony of the group.
Almost all share groups will have a clause in their share agreement which states that the existing owners have a reasonable right of veto. This is rarely exercised and is normally only due to a lack of experience of a prospective buyer or a need the buyer has, which is crucial to them, but which would alter the way in which the group is run and the boat enjoyed. Eg… A new owner may wish to change sailing grounds each season whereas the existing owners are quite happy where they are. It is not important to regard the other owners as good friends moreover a healthy group operates on a business-like basis where owners interact as good work colleagues should. All groups which Yacht Fractions deals with must have a share agreement. We can provide a template for a new share agreement, but it must be written by the syndicate for the syndicate, and fully endorsed by the syndicate.
We will not deal with a syndicate which does not have a boat share agreement, and which will not accept one, and we strongly advise any buyer to avoid any share group which is not formally defined.
Whilst share groups will have an agreement they will rarely refer to it, preferring to run the group in a friendly way through discussion and agreement. The agreement is in the back-ground for reference if the owners fail to agree.
The Sale Process
- Ownership is transferred normally on a Bill of Sale. On occasion a boat is owned by a limited company in which case the ownership is in the form of a transfer of shares. The buyer contacts Yacht fractions via email or ideally by registering on the website. This will give us all the information we need to progress interest in a boat. We need full contact details and brief summary of sailing experience and qualifications.
- Yacht Fractions will contact the seller of the share and make them aware of the potential buyer, their sailing background, and any specific requirements they may have such as school summer holidays.
- Yacht Fractions will supply contact phone numbers for the seller to the buyer and ask them to make contact for an initial chat. Usually, if the boat is in the UK this will result in an agreement to meet on the boat for an inspection. The majority of shares in overseas-based boats are sold unseen. We do recommend viewing [3 rd party] and / or surveys before buying, as we are unable to validate the accuracy of the adverts placed by sellers. However, most buyers speak with the other remaining owners who should be very open and honest about the boat and its’ condition and make a decision on this basis. When an inspection is to be done at some time involving a delay in the sale process we recommend that the buyer and seller enter into a Sale Agreement, and for the buyer to pay a deposit to secure the share until after the inspection.
- Once the buyer wishes to proceed there will be one or more of the following conditions to be met:- the buyer must be accepted by the other owners, and the buyer to satisfy himself he wishes to join the syndicate.
- The buyer must be accepted as a skipper by the insurance company
- The buyer must accept the terms of the share agreement
- The buyer may wish to inspect or survey the boat
- The buyer may have specific requirements that need to be accepted by the other owners.
- Before any of the steps above are covered we need to agree the basis of the deal: *This is the price to be paid and the timing of the transfer. Without this fundamental agreement there is no point in processing the purchase, and spending lots of time talking to other owners. For most UK based boats this takes place after the initial viewing, for overseas boats it will normally happen following the initial chat.
- Once we have agreed the basis of the deal we then proceed as follows;- The buyer needs be accepted by the other owners. This may simply be by an email from the seller informing the other owners of the buyer, their experience and qualifications. Sometimes it is a phone chat with one or more of the other owners. Very occasionally it involves a meeting.
- The seller or the group manager will contact the insurance company to check that the buyer will be accepted as a skipper.
- If there is to be a delay between the agreement to buy and completion of the purchase we will raise a Sale Agreement.
- Completion- at the point of completion, Yacht Fractions will raise a Bill of Sale. This is signed by both the buyer and the seller. Once Yacht Fractions is in possession of Bills of sale from both buyer and seller, and the purchase funds are in our client account the completion will take place. The seller will be paid and the bills of sale exchange with both parties.