Ship and Yacht Purchase Due Diligence Lawyer in Paris

Check who owns the vessel, what encumbers the hull, and what you take on with it, before you sign.

Your situation

You are negotiating the purchase of a ship or a yacht under French flag. The seller hands you a file, photographs, a price. You do not know whether the person signing is in fact the registered owner, whether the hull carries a mortgage, or whether earlier claims can be enforced against you after the sale. Closing is approaching, the broker is pressing, and the question that decides everything has not been asked: what follows the ship?

French law answers it in one sentence. Under article L. 5114-18 of the Code des transports, maritime liens follow the vessel into whosever hands it passes. Whatever the seller has not paid, you buy along with the hull.

The register is public, and that is your first move

Every registered vessel and every vessel under construction on French territory must be entered on a file kept by the administrative authority designated by the minister responsible for maritime affairs, under article L. 5114-2. For each vessel, a record states the particulars identifying the ship, the name of the owner or, in the case of co-ownership, of all co-owners with the number of their shares, and the rights over the vessel.

More importantly, article L. 5114-4 provides that this file is public: anyone may obtain extracts from it, under the conditions of article L. 311-9 of the Code des relations entre le public et l’administration. You therefore do not need the seller’s permission to find out who is registered and what encumbers the hull.

Two formal rules complete the scheme. Any instrument creating, transferring or extinguishing ownership or any other right in rem over a registered vessel must, on pain of nullity, be recorded in writing and contain the particulars identifying the parties and the vessel, under article L. 5114-1. And the bill of sale must be produced to the competent administration within one month of the sale, under article L. 5114-1-1.

That one-month deadline is not an administrative formality. It sets the starting point of the discharge period on which the whole security of your acquisition rests.

Registration and French flag status: two separate checks

The Code des transports does not treat registration of the vessel and its French flag status (francisation) in the same way. Article L. 5114-2 requires entry on the file of every registered vessel and every vessel under construction on French territory. French flag status is a different question, that of the vessel’s attachment to the French flag, and the chapter on mortgages refers to it constantly. A buyer who checks one without checking the other leaves a blind spot.

Article L. 5114-6-1 reserves the creation of a mortgage to vessels holding French flag status, excluding those holding it under 3° of article L. 5112-1-3. The vessel’s position as regards French flag status therefore governs its capacity to be mortgaged. Two consequences follow for you. If you buy a vessel whose flag status is fragile, you buy an asset your lender may not be able to take as security. And if the seller shows you a registered mortgage, its soundness must be assessed against the flag regime under which the vessel stood on the day of registration.

Article L. 5114-6-10 deals with the loss of French flag status and with the suspension of that status referred to in article L. 5112-1-7. Neither event is a neutral administrative formality: both go to the foundation of the security itself. Before signing, you ask the seller, and you verify on the file, that French flag status is in force and that no suspension procedure has been started.

Then there is co-ownership. Article L. 5114-43 requires the authorisation of all co-owners for any disposal entailing the loss of the vessel’s French flag status. If the hull is held in shares and your acquisition is to lead to a change of flag, the agreement of the managing co-owner or of a majority is not enough. A single missing signature weakens the entire transaction. This belongs at the memorandum of agreement stage, not on the day of signing.

In practice the check comes down to three questions. Is the vessel registered and entered on the file provided for by article L. 5114-2. Does it hold French flag status, and under which regime. Is that status liable to fall away as a result of the transaction itself. The three answers govern both the validity of the security interests you take over and the soundness of the one your bank will register after the sale.

The maritime mortgage regime changed on 1 May 2026

Ordonnance no. 2026-265 of 8 April 2026 entirely rewrote the French maritime mortgage regime, in force since 1 May 2026. The former article L. 5114-6, which referred to the customs code, has been repealed. The rules are now set out in articles L. 5114-6-1 to L. 5114-6-10 of the Code des transports.

Several of them concern the buyer directly.

A mortgage must, on pain of nullity, be created in writing, and only conventional mortgages may encumber a French-flagged vessel. It may be granted only by the owner or by an agent holding a special power of attorney, which calls for verification where registration was effected by a management company or an intermediary.

Unless otherwise agreed, the mortgage extends to the hull and to all accessories, machinery, tackle and equipment. It does not extend to freight. A buyer who believes he is acquiring a clean hull because the price does not cover the outfit is therefore mistaken about the scope of the security.

Priority between competing mortgages follows the order of the dates, hours and minutes of registration, those registered in the same minute ranking equally. Publication secures, at the same rank as the principal, two years of interest in addition to the current year: a search therefore reveals not merely the capital outstanding but three years of interest ranking alongside it.

Finally, article L. 5114-6-10 prohibits any voluntary transaction entailing the loss of French flag status of a mortgaged vessel, save for the suspension provided for in article L. 5112-1-7. Where committed with the intention of breaching that prohibition, the transaction exposes its author to the penalties for breach of trust under articles 314-1 and 314-10 of the Criminal Code. A change of flag proposed by a seller whose vessel is mortgaged is therefore not an arrangement, it is an offence.

Where the mortgage is recorded, and what the vessel must carry on board

The vessel file records the owner and the rights encumbering the ship. Mortgage registrations are subject to a separate publicity regime, organised by décret no. 2023-921 of 5 October 2023: for a vessel registered on the French International Register, the registration appears on the register of those vessels; for all others, it is entered in the register of security interests over movable property kept at the registry of the commercial court, referred to in article R. 521-1 of the Commercial Code. A complete search therefore means two searches, not one.

The same décret requires every mortgaged vessel putting to sea to carry on board an extract of the mortgage registrations concerning her, which may be incorporated into the certificate of registration (article R. 5114-14-11 of the Code des transports). Ask the seller for it at the first viewing. An extract that is missing, or that you are not shown, is already information.

The décret also sets out a procedure for discharging mortgages (articles R. 5114-14-12 to R. 5114-14-15), which allows the buyer to offer the registered creditors the sale price in order to free the hull. It is not to be confused with the extinction of maritime liens two months after publication of the transfer, described below: the first deals with registered mortgages, the second with liens that are registered nowhere.

Finally, failure to produce the bill of sale to the administration, and any voluntary transaction entailing the loss of French flag status of a mortgaged vessel, are punishable, in addition to the civil and criminal consequences described above, by an administrative fine of up to 1,500 euros (articles R. 5112-2-7 et seq. of the Code des transports).

The maritime lien, by contrast, appears nowhere

A mortgage can be read. A maritime lien is not registered anywhere.

Article L. 5114-8 lists six categories of claims secured by a lien on the vessel, on the freight of the voyage during which the claim arose and on their accessories: legal costs incurred to bring about the sale of the vessel and the distribution of its price; tonnage or port dues and other public taxes of the same kind, pilotage, watching and preservation costs since the vessel entered the last port; claims arising from the seafarers’ employment contract and from that of all persons employed on board; remuneration due for salvage and assistance and the vessel’s contribution in general average; compensation for collision or other navigation accident, for damage to port and waterway works, for personal injury to passengers and crew and for loss of or damage to cargo or baggage; and lastly claims arising from contracts entered into or operations carried out by the master outside the home port for the genuine needs of the preservation of the vessel or the continuation of the voyage.

That sixth head deserves the buyer’s attention, because it is the widest. It covers indifferently the claim of the master and that of suppliers, repairers, lenders and other contracting parties. It further extends to claims arising against the owner from the acts of the ship’s agent where he attends to the vessel’s ordinary needs in place of the master. An unpaid bunkering or supply invoice in a foreign port therefore falls within this category.

These liens follow the hull, but they do not last

Two articles answer one another, and the method comes from their combination.

Article L. 5114-18 provides that maritime liens follow the vessel into whosever hands it passes. That is the right of pursuit, and that is the risk.

Article L. 5114-17 sets the limit: liens are extinguished on the expiry of one year for every claim, except for the supply claims mentioned under 6°, which are extinguished on the expiry of six months.

The pre-acquisition review therefore has a defined depth. The point is not to reconstruct the entire life of the vessel, but to examine the last twelve months, and the last six for supplies. It is the port calls, crews, bunkering and stores, repairs and marine casualties of that period that can still be turned against you.

Priority, or who is paid when the price falls short

So long as the vessel trades and creditors stay silent, priority looks like a theoretical question. It becomes the only one that matters on the day the hull is sold and the price does not cover the liabilities.

Claims secured by a lien under article L. 5114-8 rank ahead of any mortgage, whatever the date of its registration, under article L. 5114-13. The bank that financed the vessel and took care to register a first-ranking mortgage therefore comes after the unpaid crew and after port dues.

Creditors may in addition invoke liens under the general law, but those claims rank only after mortgages, whatever the date of their registration, under article L. 5114-14. The hierarchy is thus three-tiered: maritime liens, mortgages, then general-law liens.

Between claims arising from the same voyage, article L. 5114-15 makes priority follow the order of the list in article L. 5114-8. Claims falling under the same head rank equally and, if the price is insufficient, are paid in proportion to their amount. One rule deserves note: for categories 4° and 6°, salvage and general average on the one hand, master’s supplies on the other, claims are paid in preference in the reverse order of the dates on which they arose. The most recent debt outranks the oldest.

The same logic governs voyages. Under article L. 5114-16, the secured claims of each voyage rank ahead of those of the preceding voyage, subject to claims arising from a single engagement contract covering several voyages, which all rank with the last of those voyages.

What is discharged, and what is not

Article L. 5114-19 governs the extinction of maritime liens, independently of the ordinary ways in which obligations come to an end: by confiscation of the vessel ordered for breach of customs, police or security laws; by judicial sale of the vessel; and, in the case of a voluntary transfer of ownership, two months after publication of the instrument of transfer.

This is the central provision for a private-treaty buyer. Publication of your acquisition opens a two-month period, and that period clears the hull of what encumbered it without your knowledge. It still requires the instrument to be produced to the administration within one month of the sale, as article L. 5114-1-1 demands, and the payment schedule to take account of the period that then runs.

A closing where the whole price is paid on the day of signature leaves you alone to bear the risk of the following two months. A properly built closing keeps part of the price in escrow until the discharge period has expired.

Yachts: two further questions

Both are expensive when overlooked.

The first is tax and customs status. A yacht acquired outside the European Union, placed under temporary admission, or on which VAT has never been paid, exposes the buyer to a reassessment running into hundreds of thousands of euros. No registration document tells you anything about that status. Our page on yacht sale and purchase sets out how the transaction is structured.

The second is the change of flag, now backed by criminal sanction where the vessel is mortgaged. To which article L. 5114-43 adds, in the case of co-ownership: notwithstanding any clause to the contrary, a disposal entailing the loss of the vessel’s French flag status requires the authorisation of all the other co-owners. A majority agreement will not do.

How we work

We carry out the pre-acquisition review, in France and on the main foreign registers. We obtain extracts from the file, identify the registered owner and the chain of title, analyse mortgage registrations and their scope, and reconstruct the last twelve months of operation to trace claims that may still carry a lien.

We then draft or negotiate the memorandum of agreement: conditions precedent, escrow of part of the price until the discharge period expires, seller’s warranties, production of the instrument within one month, and allocation of risk between signing and delivery. Where a registration has to be released, we arrange the discharge with the creditor before closing rather than after.

We also act where the review was omitted and the difficulty has arisen: challenging a claim said to carry a lien, raising its extinction by lapse of time or by discharge, releasing a ship arrest, or suing the seller or the intermediary. Where the dispute goes to court or arbitration, see our page on maritime litigation.

Tell us about your situation. We will tell you whether we can act and how the matter would be organised. +33 1 44 32 00 40.

Due diligence covers title and encumbrances. The condition of the hull is a separate question, dealt with by survey and, where the survey has missed something, under latent defects on a yacht.

Based in Paris, the firm acts in all French ports, from Le Havre to Marseille and from Nantes-Saint-Nazaire to Antibes, as well as before the Chambre arbitrale maritime de Paris, and works in English with shipowners, P&I clubs and foreign counsel.

Cases handled

A mortgage discovered after signing

The bill of sale is signed, a thirty per cent deposit paid, delivery scheduled within the month. While preparing to produce the instrument to the administration, the buyer discovers a mortgage registered in favour of a bank, for a principal higher than the balance of the price still due. The register was public; nobody had searched it. Three questions then arise: can the seller still deliver a clean hull, is the balance of the price enough to pay off the bank, and can the buyer withhold that balance without himself being in default. We obtained a settlement figure from the creditor, had the balance of the price applied to repayment against a simultaneous discharge, and made the seller bear the shortfall, secured by a retention over the vessel’s equipment. Completion took place on the scheduled date. It would have cost one search of the register had it been anticipated.

A yacht shared between several owners

Four families wish to buy a twenty-metre yacht together and share the weeks of use. The formula is attractive for its economy; it falls apart at the first disagreement if nothing has been written down. We first weighed co-ownership of the vessel, with its shares and the rule of article L. 5114-43 requiring the agreement of all co-owners for any disposal entailing the loss of French flag status, against ownership through a dedicated company, which is more flexible for organising a partner’s exit. We then drafted the usage agreement: calendar, maintenance and berthing costs, insurance, crew, liability for damage occurring during one user’s week, and above all the exit clause with its method for valuing a share. The exit clause decides everything: without it, the first one who wants to leave blocks the other three.

Frequently Asked Questions

What does due diligence on a vessel cover?

Title and encumbrances, the registration and flag position, class and statutory certificates, technical condition, the commercial and tax status, the contracts attached to the vessel such as management, charter and berthing, the crew position, any pending claims or arrests, and sanctions screening of the seller and of the vessel’s own history. The exercise is documentary and physical at the same time, and neither part substitutes for the other.

How is title verified?

By a transcript of registry from the flag State showing the registered owner and any encumbrances, obtained as close as possible to completion and repeated immediately before the funds are released. The chain of earlier transfers is checked, as are the discharge of any previous mortgage and the powers of the person signing for a corporate owner. Where the vessel has changed flag, the previous register is examined for entries that were never cleared, a classic source of trouble.

What is checked on the technical side?

Class records and any outstanding conditions, the statutory certificates and their expiry dates, the survey and docking history, machinery hours measured against the documentation, previous damage and repairs, and compliance with the rules applicable to the intended use. A condition survey and a sea trial are carried out by an independent surveyor instructed by the buyer, not by the seller or the broker, and the report is written before the balance is paid rather than afterwards.

What should be checked on crew and operations?

The employment arrangements of the crew, their certificates, any sums owed in wages or social contributions, and the manning agency’s contract, since crew wages carry a privilege over the vessel and unpaid wages can follow her into the buyer’s hands. Operational checks cover the management agreement, existing charters that may bind the buyer, insurance and its expiry, berthing agreements and unpaid port dues. Outstanding invoices from yards and suppliers matter too, because they can support an arrest.

Which risks are specific to a yacht owned by a company?

The tax and customs position above all: the vessel’s value added tax status, any temporary admission or other suspensive procedure and the conditions attached to it, and whether the commercial regime relied on was genuinely applicable to the use actually made of her. Buying the shares of the owning company transfers its liabilities as well, which is a different exercise from buying the vessel, and it calls for a warranty package. The choice between the two structures is made early.

What happens if a problem is found before closing?

The finding is used rather than ignored. Depending on its nature it leads to a price adjustment, to a condition that the seller remedy it before delivery, to an escrow retention covering the risk, to a specific warranty, or to withdrawal where the conditions still allow it. The memorandum of agreement should provide for that sequence, which is why its conditions and deadlines are negotiated with the due diligence timetable in view rather than settled afterwards.