Costly Mistakes Buyers Make in Yacht Construction - and How to Avoid Them

Bahar O.

Buying a new-build yacht is an emotional journey, but avoiding costly disappointment requires a clear understanding of the risks and responsibilities involved. The excitement of design, performance, and delivery timelines can easily overshadow critical details that, if overlooked, may turn into expensive mistakes later on.

I met Anastasia Sazanova, legal advisor from Jonacor Yachts, at the Superyacht Summit Türkiye, where we spoke about the importance of solid contracts in newbuild projects. I asked her about the biggest mistakes buyers make during yacht construction, and she shared four costly ones below.

Anastasia Sazanova at Superyacht Summit Türkiye 2025

1. Insufficient Due Diligence

One of the most critical omissions, which can seriously undermine the client’s position in the long run, is failing to check the reliability of the shipyard. Very often the client is already deeply in love with the yacht model, impressed by the hospitality of the yard and full of trust - and basic safety checks simply disappear from view. Unfortunately, not everything that sparkles is gold. In more than a decade of practice, I have seen shipyards enter insolvency proceedings just weeks after collecting new orders at a seemingly successful yacht show. Yachts are about emotions, but this is exactly where rationality is needed. I strongly recommend collecting and cross-checking information about the shipyard: review available financial data, speak to brokers and surveyors (these people are usually the first to sense trouble), ask how many hulls have been completed/are under construction, whether there are supplier delays and why. Litigation or arbitration is the very last thing you want. But if the yard collapses after you have paid installments, you are likely to spend your time in court trying to recover at least part of your money - even under a “perfect” contract.

2. Poor cash-flow planning

From our cases, another recurring issue is insufficient attention to cash-flow planning - not in terms of overall funds, but the ability to make timely bank transfers. Today, KYC procedures are extreme, particularly in Europe, and over-compliance is real. Bank issues can and do become deal breakers. Buyers must be cautious in dealing with both their own and the shipyard’s banks. Many clients also mistakenly believe they can terminate the contract at any time and recover their money if financial, banking or organisational problems arise - or if they simply loose interest. In reality, no shipyard allows this. Typically, if an installment is not paid, after a grace period the yard will either resell the unfinished hull or complete and resell it - and only after a successful resale will any remaining balance be returned, if anything remains after costs. The price of poor cash-flow planning can therefore be extremely high.

3. Not securing title

Many buyers assume that title can only pass upon full payment and delivery. This is not the only possible structure. When making advance payments, the buyer should expect some form of protection ensuring that the funds are used for their yacht and that the hull is separated from the builder’s assets in case of insolvency. The basic layer of protection is linking each installment to a specific construction milestone. Enhanced protection can be achieved through three options. The first is negotiating an earlier transfer of title, where local law allows the hull to be registered in the buyer’s name while still under construction. If early transfer is not possible, a bank guarantee may be requested, although this typically increases costs by 3-5%. The third scenario combines the first two options: a bank guarantee securing the initial installments, followed by a transfer of title to the buyer at an intermediate stage of the construction process. In practice, however, even well-established, big-name shipyards are rarely willing to offer any buyer protection beyond the basic “installment upon reaching a milestone” structure.

4. Signing without legal advice

There are many other, less significant but still important, legal issues to consider. This is precisely why it is strongly advisable to seek for a legal review before signing a contract. That said, consulting a maritime lawyer does not automatically mean you will end up with an ideal contract. Most shipyards insist on their standard forms, drafted to protect the builder rather than the buyer, and are often reluctant to amend them. Still, a lawyer will clearly identify the imbalance and make sure you understand it before signing - especially if the builder strongly resists changes. Legal review becomes absolutely crucial for yachts over 20 metres, and where construction lasts more than a year.

Sometimes the best decision is simply to walk away, even if you are still in love with the idea of owning that yacht.