Who's Reaching Into Your Wallet ... When You Go to Buy a Boat?

IT ISN'T JUST THE YACHT BROKERAGE BUSINESS WHICH HAS ACCOUNTABILITY PROBLEMS; THE NEW-BOAT SECTOR HAS SOME TRANSPARENCY ISSUES AS WELL

SERIES: BROKERAGE CLASS ACTION SUIT - BACKGROUND AND OPINION

Preface: This opinion piece is presented as background for the series that Peter Swanson (Loose Cannon) and Phil Friedman (For Yacht Builders, Buyers, and Owners) have teamed up to write in covering the class-action suit brought against several major players in the U.S. yacht brokerage sector.

Before you get your shorts twisted into a knot over what you may see as an attack on the business you work in and love, consider that sweeping potential issues under the rug doesn’t serve anyone well, consumer or practitioner. Because sector growth and health depend on long-term relationships across the sales desk. And these are best nurtured through transparency.

Beyond that, consider that this particular piece is not occasioned simply by the recent class-action suits against a number of yacht brokerage firms, but grows out of a news article published by the South Florida Sun Sentinel in May 2023, which quoted me (without my prior knowledge) concerning financial protections available to buyers of new yachts to order. — PLF

Virtually all contracts for the construction to order of a new yacht provide for an initial payment, plus several more “progress” or “milestone” payments during the build. Indeed, most contracts for the construction of new custom or semi-custom yachts have the buyer paying, in-total, as much as 90% of the purchase price prior to completion and delivery. Doing so generally involves significant financial risk and, consequently, a key question for most buyers is,

“What protections are available to safeguard that up-front investment, between the time of contracting and receiving delivery of the vessel?”