|
|
 |
|
| Boats & Yachts |
Rising with the Tide
Michael Verdon
01/01/2004
|
Up from the Depths
There are recent signs that the yacht market is firming. ShowBoats International’s 2004 Order Book, which tracks new-yacht builds over 80 feet around the world, reported that the 80- to 99-foot market is up 11.3 percent this year compared to last. The word from last fall’s Ft. Lauderdale International Boat Show, considered the industry’s finger on the pulse, is resurgence. Boatyards and brokers reported more activity than the last three shows—welcome news for new builds and the brokerage market.
Still, analysts caution it might be too early to signal a change in used-boat sales, and many brokers still see a glut of late-model product. But brokers like Kevin Merrigan believe the market is fundamentally healthy. "Yes, it’s soft, but people aren’t giving their yachts away," he says, noting that selling a yacht is different than most other luxury items. "There is a time/value ratio, since the yacht costs X amount of dollars to hold each day. We don’t want those holding costs to exceed the joy the owner gets from owning the boat. Our goal is to get the highest return on the investment in the shortest amount of time." |
Moore says that documentation will reveal maritime liens, which are "secret" until they are uncovered. "You can’t do a title search like a real estate transaction," he says. "There’s no title insurance. So you have to do due diligence on a yacht to know its history and where it has been. Liens attach to boats like barnacles, and travel from owner to owner until they’re discovered and removed," he says. "It behooves you to know that it’s being sold free and clear of any encumbrances." There can be other issues involved in yacht ownership, such as classification and taxation, adds Moore, so it pays to have a maritime attorney.
Most brokers also recommend going to specialists for items like insurance. "Marine insurance has a language and subculture all its own," says David Allen, president of Allied Marine Risk Managers in Ft. Lauderdale. "It pays in the long run to deal with an agency that understands that language."
Allen says that since 9/11, there has been a crisis in the insurance industry, and half the companies that insured luxury yachts in the ’90s have exited the business, raising rates. "There are only a few good companies left that will insure a large yacht," he says. But even those are more selective. Allen says that yacht owners tend to have complex needs for their yachts. "You don’t just insure a yacht," he says. "There are many variables. If, for instance, you plan to cruise to Mexico, you’ll need a Mexican liability insurance policy or you could end up in jail."
Allen adds that top-line insurance support does not cost any more than substandard support. "If something happens to your yacht, you want to work with a company that sends out surveyors, and not lawyers," he says.
Ultimately, though, all thoughts of lawyers and brokers drift away once an owner sets sail on the high seas—which is why one buys a yacht in the first place. "We love our yacht," says Steven
Rattner. "I liken it to a second house. The difference is that instead of being tied to Palm Beach or Nantucket, our family has traveled all over the U.S., Med and Caribbean. But on board, we feel at home."
|
|
|
|
|
|
|
