What is the first thing that comes to mind when you think of a luxury yacht charter? Probably sun, sea, incredible food, fun, and relaxation, right? And you’d be correct (that and so much more)! Terms and contracts don’t really fit in this picture. However, to get to the fun and relaxation, there is a little paperwork that needs to happen.
One of our core values at Otium Yachts is TRUST, so we try to make everything as simple and transparent as possible. We want you to feel confident in us as your broker and fully informed about the process and details so there are no surprises at sea. That is why we decided to write this blog specifically about MYBA contracts, to explain what they are, and why this is our preferred contract to use with clients.
What is MYBA?
The Mediterranean Yacht Brokers Association (MYBA) is a worldwide yachting association that was founded in 1984 by a group of yacht brokers whose goal was to promote the highest standards of professionalism and ethics in the yachting industry and to set a standard for charter agreements.
MYBA created the industry’s most respected and widely used contracts – the MYBA Sales and Purchase Agreement (MoA) and the MYBA Charter Agreement. These documents are regularly updated to ensure they stay in sync with the ever-changing needs of the global yachting market. With these contracts, clients can enjoy the peace of mind that comes from knowing these contracts have been prepared to the highest standard by industry professionals, with the client in mind.
Benefits of MYBA Contracts
1. Professional Industry Standard
The MYBA contract is the result of 40 years of experience from pioneers in the yachting industry. Some owners and agencies have their own charter terms and conditions – therefore, their own contracts. However, we prefer to trust something that has been prepared by industry professionals with decades of experience booking yachts around the world.
MYBA contracts are not available to all brokers. To have access to a MYBA contract you need to be an established and experienced broker with a proven record of professional excellence in the yachting industry. Such brokers invest a lot of time, money, and energy traveling to charter shows, inspecting yachts, and meeting the crews, owners, and Central Agents. So, brokers who have access to MYBA contracts typically only work with Central Agents or Stakeholders that they have personally met or reference-checked with their trusted colleagues. All of this benefits the client.
2. MYBA Contracts can still Work with Gulet Terms
As we mentioned in our last blog (Yacht Charter Terms and Agreements Explained), there are two sets of terms under which yachts usually operate and they are quite contrary (operating terms – the terms under which a yacht operates, and lays out what is, or is not included in the charter rate):
- Western Mediterranean Terms (WMT), also known as “MYBA Terms”
Under WMT (OR MYBA) terms the charter fee includes charter of the yacht and equipment, crew wages and food, ship's laundry, basic operating consumables, and insurance of the yacht for marine risk, third-party claims, and the crew for employer's liability insurance.
The charterer will be charged extra and at a cost to the yacht, for all other expenses. These expenses include food and all beverages for the charter guests, fuel for the yacht and auxiliary craft, dockage, VAT if applicable, taxes, harbor fees, communications, guest laundry, and shore-side electricity and water.
- Gulet Terms
Generally speaking, larger luxury crewed charter yachts operate under “MYBA terms”, and smaller standard crewed yachts (gulets) operate under “Gulet terms”. As we explained in our previous blog, different terms suit yachts for different reasons. However, regardless of the terms under which a yacht operates, we can (and prefer to) use MYBA contracts. Under Clause 8 of the MYBA contract, it states what is included in the charter rate and what is extra. However, there is a SPECIAL CONDITIONS section where we can state anything that is contrary between certain terms. For example, under SPECIAL CONDITIONS section we can put “contrary to Clause 8) of this Agreement Charter Price Includes: fuel for 4 h of the engine work daily, fuel for the generator 24/7, fuel for tender transfers to/from the yacht, Wi-Fi, VAT...” and other conditions specific to yachts operating according to the Gulet Terms. Hence, we can make adjustments required by certain terms and still use our favorite type of contract.
3. MYBA Contracts Offer the Best Protection for Clients
The MYBA contract clearly defines all terms related to yacht charter; from delivery, crew, and captain’s authority, to cancellation, breakdown, insurance, and the very important Clause 20 regarding payment of the charter fee. Every possible scenario has been covered; the MYBA contract offers protection to the client like no other contract. Clause 20 is the essence of the MYBA terms and contracts. It states that all funds received by the broker are immediately transferred to a Stakeholder (if the broker is not the Stakeholder) and then held by the Stakeholder in a designated account – safeguarding the client’s money. Fifty percent of the Charter Fee is paid to the owner of the yacht on the first day of the charter. The APA (Advanced Provisioning Allowance) is also paid to the Captain or the owner prior to embarkation. The remaining 50% of the charter fee is not paid to the owner until the first working day following the successful completion of the charter. If there are any complaints or issues raised, the funds are held until there is a resolution between the parties (with or without arbitration). In short, clients can trust that their money is safeguarded.
MYBA Contracts are our Preferred Contract
For all of these reasons, MYBA contracts are our preferred contract. We hope these two blogs (this blog and Yacht Charter Terms Explained), help clear up this side of chartering a yacht. As always, contact us if you have any questions, and trust that we will handle your inquiry with care and professionalism from beginning to end. Otium Yachts, we are here for you.