MYBA Purchase Process

Most superyacht sales in the Mediterranean are documented on the MYBA Memorandum of Agreement. The MYBA MOA is a standard form, governed by English law, and the steps it sets out are well established. Here is how a typical MYBA purchase unfolds, and where Jaffa & Co adds value along the way.

Step 1: Letter of Intent

A non-binding, non-contractual Letter of Intent is usually submitted with a good faith deposit of 10% of the price. The deposit is refundable until a binding contract is signed, and is held by the brokerage firm or the lawyers.

Step 2: Memorandum of Agreement

The binding contract is typically the MYBA MOA. It sets out key details such as the price, clean and unencumbered title, the delivery location and which party bears responsibility for the yacht. It is accompanied by a bespoke addendum with terms specific to the transaction.

Step 3: Deposit

Within four banking days of signing, the 10% deposit becomes contractually due, if it has not been paid already. From this point the buyer can no longer simply walk away and demand the money back, although they keep that right after the sea trial.

Step 4: Sea trial

A sea trial of up to four hours takes place. If the yacht has not performed to the buyer’s satisfaction, they have 24 hours to give written notice of rejection. The deposit is then returned, less the costs of the trial, and the agreement is void.

Step 5: Condition survey

The survey usually follows the sea trial. If the surveyor finds Defects, the buyer has seven days to require the seller to fix them, propose a price reduction, or reject the yacht and recover the deposit. Defects are those an appropriately qualified marine surveyor certifies as affecting the yacht’s operational integrity or systems, or her seaworthiness. The definition is vague, but generally means non-cosmetic items, with no financial threshold: a missing working anchor is cheap to fix, but affects operational integrity.

Step 6: Ownership structure

While the survey is under way, the ownership structure is put in place. It depends on whether the yacht is VAT-paid, the owner’s domicile and whether she will be used privately or chartered.

Step 7: Title and seller checks

We investigate the yacht’s legal title to confirm the seller can sell her and that she is free of debt, and check the seller’s owning company is in good standing. Under English law, a sale can be reversed if the seller is not, so this step is crucial. With no central title registry, it is a paperwork exercise, and an important one.

Step 8: Completion

We draft and negotiate the delivery documents, coordinate the technical documents and handle the legal handover. Completion usually takes place in international or European waters, chosen to manage the yacht’s VAT status. We can act as stakeholder and escrow agent, so that funds are pre-positioned and the buyer is never without both money and yacht.

Step 9: Go yachting

And enjoy.