In a private sale, that is one where the seller is not in the business of selling boats, the buyer has only limited redress against the seller if any subsequent defects in the boat are discovered. In essence the buyer is buying what he sees or under the common law rule, ‘Caveat Emptor’ or Buyer Beware.
With this in mind, it is important that the buyer composes a list of questions to put to the seller, prior to buying the boat, with regard to condition of the boat, the type of construction of the boat, whether the boat has been grounded or involved in any sort of accident or collisions, what repair work has been carried out, when the last engine service took place etc.
The seller does not have to voluntarily offer up any information about the boat or its history but is legally obliged to provide accurate answers to any questions that the buyer may ask.
The seller must not make statements calculated to deceive a buyer and must answer all questions about the boat truthfully. Providing misleading facts about the boat, may leave the seller open to be sued for misrepresentation
The seller must also be in a position to sell the boat ‘free of encumbrances’
It is possible for a seller to sell a boat without paying off the finance company, without settling a hire purchase agreement, or a boat which is a security against a personal loan from a bank, or a boat to which a boatyard or marina is owed money, in all such circumstances, this could well leave the buyer in the position of having, later, to pay off the debt(s).
It is, therefore, important that the buyer secures, from the seller, a written undertaking that the boat is not subject to any debts, liens, charges or encumbrances etc.
Whilst there are no legal requirements for any sort of written contract to be drawn up and signed when a boat is sold privately, Boatsbrokerage LTD would always suggest that a Sales and Purchase Agreement is produced to protect both parties. The RYA produces a Standard form of Agreement for the Sale and Purchase of a Secondhand Boat, which is available as a download to members.
Boatsbrokerage LTD also recommend that once the sale of a boat has been agreed, a Bill of Sale is produced and signed, again to protect both parties and to prove new ownership. – also available from the RYA for its members.
If the boat is registered under Part I of the Central Register of British Ships then this should be evidenced using the Bill of Sale prescribed by the Maritime and Coastguard Agency