A Buyer’s Guide
In the Mediterranean, most pre-owned yacht sales are written on the MYBA Memorandum of Agreement. Across the Atlantic, in Florida, the Bahamas and the wider Americas market, the standard is different: the IYBA Purchase and Sale Agreement, known simply as the PSA.
The two contracts reach the same destination, a clean transfer of a yacht from seller to buyer, by noticeably different routes. The PSA is shorter, faster and, until one key moment, more generous to the buyer. After that moment, it becomes far less forgiving. This guide explains how the PSA works and what a buyer should watch at each stage.
What the IYBA PSA is
The International Yacht Brokers Association is a Florida-based association of yacht brokers, and its Purchase and Sale Agreement for Brokerage Vessels is the form its members use for pre-owned sales. The edition in wide use today is the 2021 form, four pages long, with a front page that captures the deal and seventeen numbered paragraphs behind it.
The front page records the buyer and seller, the yacht’s identifiers (name, builder, model, year, hull number, documentation or registration number, flag and engines), the selling and listing brokers, and four dates that govern the whole transaction: the offer date, the offer expiration date, the accept/reject date and the closing date. It also sets the purchase price, the deposit, any trade-in allowance, the balance due and the delivery location, which must be stated precisely if the yacht is to be moved.
Negotiated terms go into an Additional Terms section or a bespoke addendum, which takes precedence over the standard text.
The PSA as the offer
Unlike the MYBA process, where a letter of intent usually comes first, most IYBA transactions skip that step. The buyer signs the PSA and circulates it as the formal offer, with an expiry date. If the seller does not sign and return it by then, the offer lapses.
There is a good reason buyers are comfortable signing early: the PSA gives them a broad right to walk away before acceptance, as explained below. The buyer is often named personally, followed by “and/or assigns”, so the yacht can later be bought through a company or other ownership structure. The form expressly allows assignment to the buyer’s immediate family or an entity they control.
What comes with the yacht is defined generously: gear, machinery, equipment, furniture, fuel, consumables and all registered or unregistered tenders and toys on board or on the listing specification. The seller can provide an exclusion list within five days of signing, or by the accept/reject date if sooner. Accepting the yacht means accepting that list, so read it before you accept.
The deposit
The buyer pays the deposit into the selling broker’s escrow account within three business days of the seller signing, unless another period is written in. The amount is negotiated; around 10 percent of the price is common. The seller is entitled to refuse the sea trial, survey and inspections until the deposit has cleared.
The broker holds the deposit in escrow, but is only responsible for it once funds have actually cleared into its account. In any dispute over escrowed money, the parties agree to cover the brokers’ legal costs, secured on the funds themselves.
Sea trial and survey: the buyer’s open window
This is where the PSA differs most from the MYBA MOA. The buyer’s obligation to purchase is subject to their own satisfaction, in their sole discretion. They may reject the yacht for any reason, or for no stated reason at all, at any time before giving written acceptance or before the accept/reject date passes.
The mechanics:
- Inspection is optional. The buyer may run a sea trial and survey, or waive both.
- The buyer chooses the surveyor, and the surveyor alone is responsible for the survey’s accuracy, even if a broker helped arrange it.
- Costs are split. The seller pays running expenses and carries the risk of the sea trial. The buyer pays for the survey, including haul-out, dry dock and subcontractors.
- Both sides must move quickly. The seller must make the yacht available, and the buyer must complete the inspections, as soon as practicable.
The most important line in the contract is this: if the buyer fails to give written acceptance by the accept/reject date, the yacht is deemed rejected. Silence ends the deal and returns the deposit, less any costs incurred on the buyer’s behalf. It is the reverse of the MYBA MOA, where silence after the survey means acceptance.
There is no formal defect regime. Rather than serving notices on certified defects, a buyer who finds problems typically negotiates repairs or a price adjustment, and records the outcome in a conditional acceptance or addendum. The brokers carry no responsibility for the cost of correcting anything the survey finds.
Acceptance: the point of no return
Once the buyer accepts in writing, the balance of power shifts. The seller can no longer use the yacht, except to move her to the delivery location. The buyer, in turn, is committed: failing to close now puts the deposit at risk.
The contract also makes it clear what acceptance means. The buyer confirms they have inspected the yacht, or chosen not to, and are not relying on any advertisement, listing description or verbal assurance from the seller or brokers. The yacht is bought as is. Every warranty about condition, fitness for purpose and merchantability is disclaimed. Financing is not a condition either: if a loan falls through after acceptance, the obligation to close stands.
Title, structure and closing documents
Between acceptance and closing, the legal work concentrates on title and structure.
Ownership structure and flag. Most buyers acquire through a special purpose company. The right entity and flag depend on private or commercial use, the intended cruising area and the beneficial owner’s nationality. The buyer’s “and/or assigns” designation is what allows the purchase to move into that structure.
The seller’s warranty and documents. The seller warrants good and marketable title, free of debts, liens, mortgages and unpaid taxes or duties. At least two business days before closing, the seller must provide evidence of title, proof that encumbrances are paid or will be cleared at closing, and a guaranty and indemnity backing those warranties. Where the seller is a company, its beneficial owners must also give a personal guaranty.
Corporate authority. Any company on either side must show it is in good standing, that the sale or purchase has been properly authorised, and who has power to sign and deliver.
Taxes. Sales or use taxes on the purchase are the buyer’s responsibility, payable at closing.
Closing
Closing happens on the closing date at the delivery location, with payment and the original title documents exchanged at the same time. It may be completed by courier or electronically. If the yacht must travel to the delivery location, the seller should not move her until the funds are paid or held in escrow conditional on delivery. Commission and any sums the seller owes to clear encumbrances are deducted before the balance reaches the seller.
The closing location matters for tax and duty, which is why closings are often arranged in international waters. As with any yacht sale, there can be a window in which the buyer’s money has moved and title has not yet passed. Pre-positioning both funds and signed documents with an independent escrow agent removes that gap and reduces the risk of banking delays on the day.
Risk, damage and delay
The seller bears the risk of loss or damage until closing. If the yacht is damaged after acceptance and repairs will cost under 5 percent of the price and take less than 30 days, the seller must repair her to her previous standard, the buyer may inspect the work, and closing is pushed back accordingly. Anything more serious allows either party to walk away, with the same result as a rejection.
Force majeure, from hurricanes to pandemics and travel restrictions, extends every deadline. If it delays closing by more than 60 days, either party may terminate.
When things go wrong
If the buyer fails to pay the deposit or close after acceptance, the deposit is kept as agreed damages: unpaid costs first, then split equally between seller and brokers. If no deposit was paid, the buyer owes an equivalent sum. Either way, that settles all claims.
If the seller fails to perform, the buyer can recover the deposit and all other funds, or insist on specific performance, meaning a court or tribunal orders the sale to go ahead. The contract records that this is reasonable given that every yacht is unique.
Disputes go to binding arbitration. The default is the International Yacht Arbitration Council in Fort Lauderdale under Florida law. The parties may instead choose London or Monaco, English law, or arbitration in London under the London Maritime Arbitrators Association. Jury trial is waived, and the winning party recovers its legal costs.
The buyer’s checklist
Before signing and accepting, check:
- The four dates. The accept/reject date is the one that matters most; diarise it.
- The deposit. Agree the amount and confirm the selling broker’s escrow details before wiring.
- The exclusion list. Read it before accepting; acceptance confirms it.
- Inspections. Book an independent surveyor early, and budget for haul-out.
- Survey findings. Agree repairs or price changes in writing before you accept.
- Representations. Assume nothing in the listing is guaranteed; verify what matters.
- Financing. Secure it before acceptance; it is not a condition of the contract.
- Structure. Use “and/or assigns” and set up the purchasing entity early.
- Title documents. Insist on the seller’s evidence of title and guaranties two business days ahead.
- Closing location and escrow. Plan both for tax and for a simultaneous exchange.
- Dispute resolution. Check which forum and law box is ticked.
- Additional Terms. Anything promised outside the form belongs in writing.
Two contracts, one market
The IYBA PSA and the MYBA MOA reflect the markets they come from. The PSA leaves the buyer free to step back until the moment of acceptance, then holds them firmly to it. The MOA asks for commitment earlier but defines precisely, through the sea trial and defect regime, how a buyer may still withdraw. Knowing which contract you are signing, and where its point of no return sits, is the foundation of a well-managed purchase.
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This article is a general guide and not legal advice. For specific questions on a transaction, consult your broker or a specialist yacht lawyer.
