How To Buy A Share

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 for both the buyer and the seller and the other owners are all comfortable that the change of ownership the share will not change 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.

It is not important to regard the other owners as good friends, 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 will not deal with one which does not and which will not accept one and we strongly advise any buyer to avoid any share group which is not formally defined.
While 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 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.
A typical purchase will progress as follows :

  1. Buyer contacts Yacht fractions, hopefully they will complete the buyers registration form which will give us all the information we need to progress interest in a boat. Some buyers prefer to call or send a simple email expressing interest, this is fine but we will always need
    Address and phone numbers of the buyer
    A brief sailing summary of experience and qualifications.
  2. Yacht Fractions will contact the seller of the share and make them aware of the buyer, their sailing background and any needs they may have (eg School summer holidays)
  3. 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 as buyers can take comfort from the other owners who do not wish to sell and who should be very open and honest about the boat and its condition.
    When an inspection is to be done at some time involving a delay 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.
    We ask you to feed back to us.
  4. If following this conversation the buyer wishes to proceed this will always be subject to one or more condition:
    – there is always the need to be accepted by the other owners and the buyer to satisfy himself he wishes to join
    – 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 buyer may have specific needs which need to be accepted by the other owners.
  5. 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, it will be subject to the conditions being accepted.
    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.
  6. Once we have agreed the basis of the deal
    – the buyer will be accepted by the other owners. This may simply be by an email from the seller informing the other owners of the buyer, his 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.
  7. If there is to be a delay between the agreement to buy and completion of the purchase we will raise a Sale agreement.
  8. The 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 the completion will take place, the seller will be paid and the bills of sale mailed to both parties.