Buying a Superyacht Yachts

NAUTICAL EXPERTS HOW TO

ENJOY YOUR NEXT YACHT

Are you thinking of buying a new yacht? Alberto Vidosa of Nautical Experts explains what you should think of when purchasing a new build.

BEING A PASSIONATE SAILOR, AND PASSIONATE about yachting in general, I have had great experiences on board yachts and always look forward to having the next one. I am not someone who believes in the wellknown phrase: “The two happiest days for a yacht owner are the day they purchase a yacht and the day they sell the yacht”. For me the enjoyment of a yacht are all the days and experiences and memories in between. How to ensure every yacht owner finds the right yacht to achieve this is the purpose of this article. I firmly believe that any future yacht owner, even of the smallest production yacht, deserves independent, professional advice and support to enjoy the best possible experience on board his / her yacht.

Please find below some highlights of what you should take care of to enjoy your yachts.

Ask for the right advice Look for independent advice from a yachting professional whose sole job is to look after your interests. From the very first moment you think about buying a yacht, identify the person who can join you in the process of selecting the ideal yacht for you.

With the right questions this professional will understand which kind of yachts can best fit your requirements and what additional assistance you might need to smooth your entire yachting experience; from the first moment you think of buying to the moment you are on board your yacht and enjoying that fabulous feeling of the sea.

If you make this selection early, you will ensure your long-term benefits while also learning about other yachts.

Dedicate time to learn about yachts When buying a new yacht an individual should be prepared to spend the time needed to learn all aspects about potential yachts so as to maximize their later enjoyment. Even if the purchase can be closed very quickly, the preparation time needed before the signature is vital in order to avoid future headaches with the yacht.

First-hand experience is always best. Therefore, an excellent approach is to try different yachts before actually buying your first or next one. You can gain a proper sense of the vessel, and learn her characteristics, by chartering a yacht, and being on board with family, friends and / or business partners. At the very least, review some yachts by taking them out for a short trip. With this exercise you will be able to confirm if the yacht fulfils for needs and expectations, as well as learn if it has all features you would like to have included in your yacht.

Understand the different types of yachts There are three different kind of new build yachts, depending on their manufacturing process u Production yachts: Their specifications are mostly defined and not many aspects can be chosen by the future owner u Semi-Custom yachts: Some of the significant specifications of the yacht can be defined by the buyer before the purchase, but still limited u Custom yachts: The yacht is defined mostly by and for the buyer, beginning from scratch A fourth distinction, but just offered by a few yards around the world, are Bespoke yachts. These yachts are fully tailor-made to the buyers’ wishes and do not follow any previously designed platform.

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NAUTICAL EXPERTS Consider the yacht’s future use The use of the yacht is limited by the kind of registration chosen, as well as by the flag the yacht is flying. This affects taxation, rules and regulations. Private Registration: u Wholly for the recreational use of its owner and guests u The yacht cannot be used for commercial purpose and, therefore, enjoys less strict rules and regulations Commercial Registration: u Yachts in commercial use carrying a limited number of passengers, mainly known as Charter Yachts u The rules and regulations are stricter because they carry passengers on board. Since a few years , yachts under the Marshall Islands Registry have been able to combine a private and a limited commercial use to allow for more flexibility. However, when in commercial use, the yacht had to always comply with the stricter rules and regulations set up for commercial yachts. This programme called YET (Yachts Engaged in Trade) has become a success and following the good acceptance of the industry, other flag registries are implementing a similar program. We all look forward to seeing more countries accepting this program and expanding the areas where yachts under this limited commercial register can sail.

Understand which stages involve a new build Stage 1. Pre-Signature – Development of the vision for the specification This stage begins when you first have the idea to buy a new yacht and finishes with the signature of the new build contract for the yacht.

The focus in this stage is to identify the needs and expectations of you as the potential owner, plus the reasons behind them, so as to be able to choose the most suitable yacht.

This will allow your team of professionals to nail down the technical specifications in the contract to ensure you are receiving the yacht you envisioned.

Stage 2. Post Signature – Following the specification until the yacht is delivered This stage begins once the contract has been signed. The build process must now be developed to achieve the delivery of the new yacht on time and in budget, always meeting your expectations.

Even if you have ordered a production yacht, it is important to retain your professional advisor so that they may follow the construction. Small or large decisions may have to be taken and their views will be useful. Also, they are there to confirm that these decisions have been implemented.

Stage 3. Post Delivery – Warranty period Once the yacht has been delivered to you, the warranty period begins, leading to a period in which your team needs to rise and highlight warranty items properly, both in time and form.

Any extension of this period will depend on the contractual agreement and on whether you as the owner are a company or an individual. These vary by country and region, and each has their own specific requirements and guidelines. Your expert will need to outline any variations.

This period will allow your yacht to get the final adjustments it may need after being launched and is in operation.

Reduce the risk by having a team around you The purchase of a new yacht can seem a complex and daunting endeavour. However, with the right team, and with time and attention on your part, the experience will be easier. Indeed, it can and should be exciting to see one’s vision take shape before them in the yard. A professional team will also ensure that there are no wrinkles, delays or problems that may arise with taxes, warranty issues, or (a worst case scenario) a yacht not being delivered because of financial problems of the yard, etc.

Different types of yachts (production to bespoke) need different types of experts, each of which may be involved to a greater or lesser degree.

If you consider buying a production yacht, the following professionals should be taken into consideration: u Owner’s Representative / Project Manager: an independent professional to give you professional advice about which yacht would fit to your expectations and will maintain a watch on the entire build process and monitor the work of the other experts in the team. u Legal Advisor: specialised in yachting, this role is vital to define the contract with the yard, representing your interest towards a successful delivery and also, importantly, providing guidance for eventualities that may appear during the construction. u Fiscal Advisor: a yacht is a movable asset, normally navigating within different jurisdictions and subject to different international tax regulations. This often leads to complex international operations. Your fiscal advisor will be able to provide you with the right suggestions about the corporate structure which should own the yacht to limit your personal risks, as well as to define the taxable relationships with future operations. u Financial Advisor: Depending on the size and type of yacht you will be able to find the appropriate financial entity, such as [private] banks and other financial institutions, which can provide financing for the purchase of the yacht or provide other, different, solutions to finance the yacht. For the purchase of a custom or bespoke yacht the team should be increased to cover also other relevant aspects. Some of these professionals could be, designers (interior and or exterior), naval architects, engineers and other specialists such as IT, security etc.

“It is important to retain your professional advisor so that they may follow the construction. Small or large decisions may have to be taken and their views will be useful.”

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“Selecting the right yard is not always an easy task. Relying on your team to evaluate different yards and provide you with a short list of the most suitable ones is a very good approach.”

Select the right yard Selecting the right yard is not always an easy task. Relying on your team to evaluate different yards and provide you with a short list of the most suitable ones is a very good approach.

Many yards provide similar products and most of them can provide a good yacht, but not all yards may be able to offer you the one you are looking to build. You should look for a flexible yard willing to listen to you, since it is possible that several aspects of the project will only be defined at later stages. In these situations the yard would be collaborative and understand the owner’s needs and expectations are of primary importance, and should seek to work with them to achieve that vision. Thankfully, many yards are co-operative and collaborative, as they wish to provide the best possible solution to a yacht owner’s needs.

The experiences of the yard, as well as their reliability to deliver their products on time and in budget, are very important items to consider. You should not to forget to investigate the financial situation of the yard, as no owner would like to suffer delays related to financial problems or even lose the yacht due to a bankruptcy situation.

The period before signing the purchase contract is vital as it allows the opportunity to discuss and define, together with the yard, all the details of the technical specification, as well as how the contract will cover the whole process. Payments, ownership during the building process, acceptance of the yacht and warranty clauses are some of the aspects which cannot be left aside.

Follow the construction process at the yard Even if building at the most reputable yard you should have your team of experts follow the construction process.

Your team has to assure that the yacht is being built according to the agreement signed, keeping to the agreed upon milestones and budget forecasts, as well as to react to any new developments to minimise

any variation these may have on the agreed upon yacht specifications. Being permanently on site or conducting regular visits, depending on the yard and on the yacht you ordered, your experts will represent your interests while coordinating and communicating with the yard.

Be prepared for warranty claims The warranty period is a very important stage for a new build and you should expect some claims rising during this period.

Before signing the contract, confirm how your yacht is going to be covered in the geographical areas you mainly plan to be sailing.

Even on production yachts this is not unusual, and is related to individualised manufacturing methods and to the low unit numbers produced for each model.

If you have chosen to build a one off custom yacht, you should be aware that each of the systems installed in that yacht is unique to your yachts’ configuration. Although each piece of the equipment will have been tested before delivery, adjustments and corrections may be required during the normal operation of the yacht.

After the delivery of the yacht…Enjoy! Once the yacht is delivered you should, with your family and guests, begin enjoying your time on board your new yacht. Great experiences are waiting for you at sea!

Even if you have a team around you to take care of your other assets and investments, keeping a team of yachting professionals to support you during the operational life of the yacht, will allow you to maximise your enjoyment.

Alberto Vidosa can be contacted atAlberto@NauticalExperts.com