Neo Marine

A broker is an intermediary who connects the owner selling his or her boat with the potential buyers. The broker’s goal is to make the communication easier between both parties, thanks to his or her expertise, advice and support.

As a seller, engaging a broker allows you to have support throughout the whole selling process in order for the transaction to succeed in the best conditions and as quickly as possible, without having to undergo the stress that usually goes along.

The broker’s role for the seller :

• Completing a thorough and detailed price study for a correct market positioning
• Advice for preparation and enhancement
• Carrying out a complete business case (detailed inventory, slideshow, maintenance report…)
• Setting up a communication strategy (internet, specialized press, newsletter, participation in boat shows…)
• Planning and carrying out visits
• Conducting negotiations
• Writing sale-related documents
• Carrying out the boat survey and the sea trial
• Ensuring funding availability thanks to a deposit account
• Carrying out administrative procedures related to the sale

As a seller, engaging a broker allows you to benefit from advice, guidance and support throughout your research and the whole purchasing process, helping your project become reality with complete confidence and full transparency.

The broker’s role for the buyer :

• Defining your project and criteria for your future boat
• Searching for boats matching your criteria and carrying out pre-visit(s) if necessary
• Presence and support during your visit(s)
• Offering advice and financing and insurance solutions
• Conducting negotiations
• Writing purchase-related documents
• Carrying out the boat survey and the sea trial
• Checking the boat’s tax and mortgage status
• Monitoring the transaction
• Carrying out administrative purchase procedures

In all cases, the broker is always paid on contingency, in other words, once the transaction successfully closes.

It is important to have your boat well prepared for sale. It must be ready to welcome visits from the broker who will complete the business case and from any potential buyer as well.

• Depersonalization : In order for the visits to take place in the best conditions, it is important for the potential buyer to be able to picture and project himself. That is why we recommend you to depersonalize or “uncustomize” your boat. To do that, we advise you to remove all personal belongings that you do not need on board immediately, and plan on storing the ones you want to keep on board in non-visible areas such as compartments, safes, etc.
• Cleaning : Just like in real estate property or automobile sales, the cleanliness of your boat is essential when presenting it to the potential buyers. An untidy and/or dirty boat could hold back the initially interested visitors who might think the boat is poorly maintained. It could actually even rule out any possibility of discussion. It is therefore crucial to clean your boat on a regular basis in order to be able to present it at its best to the visitors.
• Minor maintenance and repair work : Every used boat needs some minor works or improvements. It is important not to hide them from the potential buyer who might later have doubts about the boat’s condition. In fact, mentionning them at the very first visit or during inventory – showing transparency – will reassure and gain the potential buyer’s trust.
  It can also be wise to carry out some minor and low cost repairs that will enhance your boat, such as replacing mirrors or oxidized tap valves and fittings, polishing or removing the yellow from the hull(s), woodwork maintenance, etc.

It is very important not to neglect your boat and to keep maintaining it as long as it isn’t sold. That way, you will be able to present it in the best possible conditions to the future potential buyers.

1) What is the right boat for my navigation plans?

When you start doing your research for your future used or new boat, it is very important to take the time to set your research criteria that correspond to your plans, needs and expectations, in order to find the right boat.

Falling for a yacht seen online or in a harbor can often happen, but it is important to make sure that this “crush” actually corresponds to your navigation plans in order to make the right purchase.

It can be helpful and wise to set a specification for your future boat.

2) What is the right budget for my boat purchase?

The key to the right purchase : respect your budget!

Before starting your research for your future yacht, setting the budget that you want to invest (boat + repair works and added accessories) is essential since it is obviously one of the most crucial criteria of your research.

It is also important to keep a “safety margin” for your purchase and not spend all your savings. You have to think ahead and consider the upcoming operating expenses of your boat. ( 4) What are the post-purchase expenses that I need to anticipate? ).

Finally, there are various possible financing options for your boat which benefits can be interesting for you to know about ( 3) How do I finance my boat? ).

3) How do I finance my boat?

There are different possible ways to finance the purchase of your future boat. Depending on your personal investment and on the boat you wish to purchase, you can opt for :

• Purchase in « cash »
• Standard loan
• Lease To Purchase Option Agreement (LOA in French – rental contract with option to purchase)

For more information, please read this article : Boat financing : What are my options?

4) What are the post-purchase expenses that I need to anticipate?

After you purchase your boat, you will need to plan a budget every year to cover for its well functioning. This budget usually amounts to 10% of the original purchase price of your boat and includes :

• Storage (marina wet slip/berth, outdoor ground storage, handling and dock work fees…)
• Insurance ( 8) How do I choose my insurance? )
• Annual maintenance (antifouling, engine inspection/overhaul, safety gear review…)
• Taxes (In France, you have to pay the Yearly Navigation Rights each year.)

Obviously, this budget may vary depending on your boat, your plans and your navigation area. For instance, berths are more affordable on the Atlantic coast than on the Mediterranean coast. Similarly, insurance will be more expensive for a round-the-world trip plan than for coastal (inshore) boating.

For more information, please read the article : What annual budget is best for my boat ?

5) Boat storage : What are my options?

Before purchasing your boat, it is important to address the issue of its storage when you won’t be at sea. You have various options for that :

• The year-round berth : highly appreciated option for most boaters. The availability and price of a marina wet slip can signficantly vary depending on the navigation area. In France, the average time on waiting list before getting a berth is 3 years. However, many boating professionals can rent one to you if you turn to them for your boat’s purchase and/or maintenance.
• Dry boat storage : an increasingly attractive option for boaters. Whether it is for small units in dry port or for bigger units that don’t sail during several months of the year, yacht owners rely on this option more and more. It is in fact generally less expensive than a year-round marina berth rental and allows you to easily perform standard maintenance during storage time.
• Anchor mooring : an interesting alternative to the berth. The anchor mooring allows you to always have your yacht afloat at a more attractive price compared to a berth. However, this alternative implies a strict monitoring of mooring conditions, namely thanks to the services of a monitoring service.
• Alternation between in-water and dry storage : the compromise that adapts to your plans. It can indeed be interesting for you to consider switching between different storage options depending on the time of year and your navigation plans.

6) Do I need a license?

In France, holding a boat license is mandatory for boats which main means of propulsion are engines, at sea as well as for inland navigation. However, no license is required for sail boat navigation. (A license is required for steering a dinghy/tender with an engine over 9,9 horsepower.)

However, if you feel the need to, using the services of a professional skipper as part of a training course can be interesting for you . This can help you take your new boat in hand. Training is one of the key elements of safety at sea.

7) Do I need to have the boat surveyed before buying it?

Having the boat surveyed by an accredited marine surveyor before purchase is essential.

The pre-purchase boat survey allows you to be sure of the actual condition of the yacht you want to buy and to avoid any unpleasant surprise.

Usually, the survey is the subject of a suspensive clause in the sales agreement. If the assessment does not lead to a positive outcome – in other words, if the boat is not declared fit for safe navigation – the sale can be canceled or renegotiated.

The marine surveyor is generally appointed and paid by the buyer in order to ensure his or her impartiality in regards to the evaluated good.

The surveyor’s report can also later be asked by the insurance to assess your boat’s value.

8) How do I choose my insurance?

Although insuring a boat is not mandatory (except for professional or sports use), taking out insurance is essential!

Just like for real estate or automobile, there are various levels of insurance policies that you can apply for, from civil liability insurance to comprehensive all-risk insurance. Your insurance premium will of course depend on the selected coverage guarantees, but also and significantly on the boat itself (size, age, engine(s)…), your navigation plans and area.

Hence, your insurance should adapt to your plans. If your navigation program is to do some coastal sailing occasionally on week-ends, you won’t be insured the same way as you would be if you plan on cruising around the world. Likewise, your insurance will have to take into consideration your navigation area and its associated risks. In the West Indies for example, you will have to be covered against the risk of hurricanes.

Whatever the coverage guarantees that you want to apply for, it is usually preferable to turn to an insurer specialized in boating in order to be best advised and often benefit from more attractive rates.

Please note : Generally, if you wish to store your yacht, ports and companies that have an open ground storage facility, will ask for your boat to be at least covered for civil liability.

9) What is the right safety equipment for my program?

Having the right safety equipment for my program on board is essential. In addition to the mandatory equipment defined by the Division 240 [http://www.developpement-durable.gouv.fr/L-equipement-de-securite-des.html], it can be interesting to have some extra equipment such as emergency locator beacons or even survival suits, especially for long-distance cruises.

Generally speaking, there is no impediment or limit to buying abroad. However, some administrative procedures will be necessary in order to enable the boat’s new registration. Registration regulations can vary from one country to another and you may have to settle some taxes. That is why you shouldn’t hesitate to turn to a professional to help you and guide you through these procedures.

In order to register your boat to French customs (francization), your boat must :

• Belong (at least half) :
  • To one or more national(s) of a Member State of the Europoean Union, or a State part of the Agreement on the European Economic Area, and whose main place of residence or home is located in France.
  • To one or more company(ies) headquartered in France or in another Member State of the European Union or in a State part of the European Economic Area.
• Have been built in the European Union, or have been settled for the rights and eligible taxes
• Have undergone a security check

You purchased your boat in a Member State of the European Union :

• You will have to carry out the standard francization and registration procedures.
• You will also have to provide proof of the boat’s fiscal compliance (with a document provided by the tax revenue office).
• If the boat is new or considered new (less than three years since the first launch or having navigated less than 100 hours) and is more than 7.5 meters (24.6 feet) long, France’s in force rate’s VAT will have to be settled by the buyer.
• If the boat is used and you are a private individual, there is no need to pay the VAT in France. However, when requesting francization to customs, you will have to provide the deletion certificate of the foreign ensign (closed transcript of registry issued by the seller) in addition to your boat’s proof of fiscal situation.

You purchased your boat outside the European Union, you will then import it in France :

• You will have to clear your boat through customs by carrying out standard import procedures and by settling all possible import rights and taxes.
• If the boat is imported in France by a private individual, the customs’ service will determine, according to your verbal instructions, the amount of rights and taxes that you will have to pay for the import.
• CE marking, builder’s plate and hull identification number will have to be visible on your boat. Also, your boat will have to meet safety, health, environmental compliance and consumer protection standards defined by the legislation in force.
• You will also be required to have in your possession the written compliance statement (or CE control certificate) as well as the owner’s guide.
• Only after completing the import procedures will you be able to carry out the francization of your yacht. When going through the francization procedures, you will have to provide the import statement stamped by the European Union entry customs office.

For more information, please visit the French customs website.

Buying a new boat

Buying a used boat

In the end, your decision between used or new will depend on your budget and on your needs. Although a new yacht requires a significant contribution upon purchase, you will be able to enjoy the brand new craft that you chose, with its new gear, all under warranty. On the other hand, used boats offer a wider range and selection of products with more affordable prices, whose technical conditions must however be validated by an authorized marine surveyor.

Since June 16th, 1998, all European recreational crafts manufacturers have to issue a Written Declaration of”CE” Conformity for every constructed unit between 2.5 and 24 meters (8.2 and 78.74 feet) long. The declaration is delivered by the manufacturer to the first owner of the craft and must be handed over along with the boat if and when sold again.

This declaration certifies that the boat has been manufactured in line with the European standards. It includes the unit description, the CIN number and the ISO standards used during manufacturing, among other elements.

A boat cannot be sold or registered in Europe without a Written Declaration of “CE” Conformity. Therefore, it is important to know whether or not the boat you want to purchase has the Declaration of Conformity, otherwise it may be very difficult to get it registered in Europe.

• In case you do not have the Written Declaration of “CE” Conformity but your boat is “CE” certified, you can contact your boat’s manufacturer – if still in business – to request a duplicate.
• In case you do not have the Written Declaration of “CE” Conformity and your boat has not been “CE” certified, the boat will have to be checked by a notified body (organization). After thorough review and possible adjustments, the body will be able to deliver the conformity declaration. Costs incurred by this procedure will be charged to the owner of the boat.

Special case : The Written Declaration of Conformity is not necessary for the boat’s “re-registration” under the same ensign (flag).

Since 2003, the CIN number, or Craft Identification Number, has replaced the HIN (Hull Identification Number). It is a unique number that identifies your boat.

It includes the following information :

• Country of manufacture
• Manufacturer’s identification
• Boat’s serial number
• Month of manufacture (from A for January; to L for December)
• Year of manufacture
• Model year (year in which expected to sell)

Please note : The year of manufacturer and the model year (the “Millésime” in French) can be different. For example, a 2008 model’s manufacture can begin and be completed in 2007. However, the CIN number has no indication of the boat’s first launch.

Choosing your equipment when purchasing your future yacht is very important. It needs to meet your boat’s needs, your naviagtion program as well as your expectations.

It is therefore necessary to take stock of and evaluate your needs in terms of comfort, energy and water supply autonomy, performance, etc. Always keeping in mind the financial aspect of it all, as every fitting not only implies extra costs upon purchase but also during maintenance.

Whether you buy used or new, the keyword when choosing your gear is consistency. Your equipment needs to be adapted to your boat and to meet your program and needs. However, you shouldn’t be “over-equipped” with elements that you don’t really need. You must not forget that every equipment not only represents extra cost, but also extra weight on board and less space.

Regarding your energy ressources, it is important to define your fittings according to your comfort and navigation equipment and not the other way around. Of course, having an energy balance or assessment carried out would be ideal. For that, seeking professional help is highly recommended as the person will know how to advise you on the right installation for you.

In all cases, whether it’s for the mandatory safety equipment or for your extra program-adapted gear, the essential and key aspect on which you must not make any compromises when selecting your accessories, is safety.

You have different possible options to finance the purchase of your future used or new boat. Depending on your personal contribution and on the yacht you want to buy, you can opt for :

1) Purchase in “cash” : If you can, cash payment is the first available option that you have to purchase your boat. However, if you consider this option, you need to bear in mind the fact that you will pay full VAT (in continental France, the rate is 20% on the boat’s price), and that the boat will be included in the calculation of your personal property (estate, assets).

2) Standard loan : If a LOA is not possible, using a standard loan (credit) or “marine credit” for the purchase of your future boat, can be worth considering. In this case, you must keep in mind that full VAT will be applied on the boat’s price; that you will have to pay for all loan-related fees (your boat’s price will therefore be increased by the loan’s cost); and that the boat’s value on the 1rst of January of each year (to which the outstanding balance, the unpaid interest and the accrued interest are substracted) will be retained in the calculation of your property.

3) Lease To Purchase Option Agreement (French LOA – rental contract with option to purchase) : You choose your yacht with its equipment, and the financing body purchases it for you, rents it to you for the duration of the contract and then sells it to you for the initially agreed upon purchase option. Since you are renting the boat, the boat itself is not included in your property throughout the duration of the LOA. The duration of this kind of financing generally goes from 36 to 180 months. The intial contribution can go from 20 to 50% of the purchase price.

The LOA allows you to benefit from a 10% VAT discount on all your rents throughout the duration of the contract, for offshore (deep-sea) category crafts, if you navigate on European waters; and from a 0% VAT if you navigate abroad. Hence, the very profitable aspect of the Lease To Purchase Option Agreement option.

Example of boat financing with LOA :

Purchase price : 150,000 € including taxes

Initial contribution : 75,000 € including taxes (50% of purchase price)

59 monthly rents (5 year financing) : 1,140.03 € including taxes (10% reduced VAT)

Option to purchase : 15 € including taxes

Total cost : 142,276.77 € including taxes

The LOA contract is mainly for new boats. However, you can also finance a used boat if :

• The boat you want to purchase is already under LOA contract : With the approval of the financial institution, you can transfer a LOA contract from the seller to the buyer. In order to do so, the residual value must be higher than the quarter of the selling price and the buyer must be eligible for funding as for a standard loan. Upon transfer, it is possible to modify some apects of the contract (duration, insurance, etc).
• The boat you want to purchase is sold by a professional and subject to VAT : In this case, the company owner of the craft can sell it with taxes included to the funding body who will set up a new Lease to Purchase Option Agreement with you.

Tax exemption (or defiscalisation) is a term used to refer to a number of legal provisions that allow taxpayers to get tax benefits and reduce the amount of their income tax or their solidarity tax on wealth (French : ISF). These legal provisions are designed to encourage investment in various fields such as recreational boating sector overseas, since 1986.

Since then, numerous laws have passed to better regulate and restrict the tax exemption scheme. The Girardin industrial law that promoted productive investment in overseas territories for taxpayers until now (such as purchasing a boat for direct rental), will gradually be replaced by tax credit by January 2018.

What you need to know :

• The current tax exemption system does not allow you to become owner of the boat you invested in.
• Because of the tax exemption scheme’s great complexity, seeking help from wealth management professionals is essential if you want to benefit from it.

Every year, you will have to spend a budget to keep your boat fit for navigation. The amount of that budget can vary depending on the boat type, your navigation program and area. It generally amounts to 10% of the purchase price and includes (aside from provisioning, refuelling, etc.) :

• Storage : Whether you choose a year-round marina berth, mooring, dry storage or even to alternate between these options, you will have to plan expenses for your boat storage. The budget spent may vary significantly depending on the storage type, the size of your boat and the area. Hence, the importance of carefully reviewing your options in order to find the right one for your needs.
• Insurance : Just like in real estate or for automobile, there are various insurance levels possible for your boat, from Civil Liability to comprehensive all-risk insurance. Your insurance premium will depend on the selected coverage guarantees, on how you use your yacht (private use, long journey, rental, etc), on the yacht itself (size, age, engine(s), etc.) and on your navigation area.
• Annual maintenance : Regular maintenance of your boat is crucial if you want to keep it operational. Moreover, replacing worn-out parts and equipment on a regular basis is highly recommended by the manufacturer in order to ensure their smooth operating as well as their warranty. Carrying out antifouling, engine(s) inspection/overhaul and once-a-year safety gear review, are a few of the crucial maintenance operations.
• Taxes : In France, each year you have to pay an Annual Navigation Fee (in French, DAN : Droits Annuels de Navigation) when your boat is francized. The DAN fees are calculated based on the age, hull length of the vessel and administrative power of the engine(s) of your boat.

For more information, please refer to the article : Questions I need to ask myself before I purchase my boat ?

GRP (glass-reinforced plastic) hulls, mainly made out of polyester and fiberglass, were introduced in the mid 1960’s. They were an immediate success for the manufacturers as well as for the boaters. They contributed to the growth and expansion of pleasure boating as we know it today. However, GRP hulls have a flaw when it comes to humidity : osmosis.

• Definition : Osmosis is a chemical phenomenon that allows solvent molecules (usually water) to pass from one solution to another more concentrated solution, through a wall or semi-permeable membrane.

More specifically, on a vessel, this means that seawater (or fresh water if your navigating inland) diffuses into an passes through the gel coat that is not entirely waterproof, and soaks the polyester resin. This alters the rigidity of the hull and leads to delamination of the coating layers.

Please note that osmosis does not prevent a vessel from navigating. Nevertheless, it is preferable to carry out a treatment to stop this phenomenon from spreading.

• How do I detect osmosis? Osmosis is characterized by the appearance of blisters on your hull, from which leaks acetic acid – recognizable by its strong smell of vinegar – when pierced.

However, you can also determine whether or not a hull is affected before the emergence of blisters. You can do so by measuring its level of humidity. This can be done by an accredited marine surveyor.

Neither the moisture content readings nor the visual observation of blisters will give you a precise estimate of the phenomenon’s evolution stage.  Only after “stripping down” the hull by removing antifouling, primer and gel coat, will you be able to really have an idea of your boat’s actual condition.

• How can I prevent osmosis?
  • Carry out a preventive treatment : The osmosis phenomenon is due to contact between water and your hull’s resin enabled by the gel coat’s partial permeability. The anti-osmosis precautionary treatment consists in creating a impermeable barrier (sealer layer) between your hull and the water. Usually, an epoxy resin is used for that.
    Warning : Except for new vessels, it is always better to measure the level of humidity beforehand, otherwise you might block and encapsulate the humidity inside your hull.
  • Winterize your boat : Dry winterization of your boat during several weeks per year allows your hull to evacuate the accumulated humidity and can help prevent osmosis.
• How do I treat osmosis?

There are several steps that need to be followed for the anti-osmosis treatment. The most important step is the “stripping down” of the hull by peeling the gel coat followed by the drying (dry storage for several months). This helps eliminate the hull’s humidity and stop the osmosis phenomenon.  Then, you will need to fix the damaged spots on the hull before repainting the whole underside of the vessel, adding an anti-osmosis preventive. Checking the humidity level of the hull throughout the process is important to help make sure that your boat dries properly.