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YBAA Code of Ethics

CODE OF ETHICS & BUSINESS PRACTICE
[As Approved by the YBAA Board of Directors - January 19, 2006]

PREFACE:

YBAA member brokerage firms, and their brokers, agree to fully comply with the following
YBAA Code of Ethics & Business Practice, as a condition of membership and in furtherance of
their commitment to maintain the highest industry professional standards.
YBAA strongly recommends that all members utilize YBAA’s copyrighted, standardized
contractual Forms, which are provided as a free member benefit, designed to simplify the
transaction process and to enhance customer satisfaction. Forms include: Central Listing
Agreement; Open Listing Agreement; Purchase & Sale Agreement; and Acceptance of Yacht form
and are available in U.S. and Canadian versions. Use of the forms is strictly limited to current
members, without alteration or edits. Members will use only the current dated version of each
Form. Forms are updated annually.
Member firms and brokers are encouraged to use the YBAA member logo in their advertising and
promotions and on company web sites, letterhead and business cards
YBAA also strongly encourages eligible member brokers to earn their Certified Professional
Yacht Broker (CPYB) designation. CPYB brokers exemplify industry professionalism, having
met the established criteria for experience, knowledge and commitment and having successfully
passed a three-hour written certification exam. The CPYB program is a cooperative venture
among the nation’s leading yacht broker associations. Full details are available at www.cpyb.net.


SECTION 1. RELATIONS WITH THE PUBLIC

1.1 The Broker will maintain in a special bank account, separated from his/her own, or the
brokerage firm’s, operating funds or monies coming into his/her possession in trust for other
persons. If the Broker is handling escrow funds or deposits, these funds will be released and
distributed expeditiously once the terms of a contract or escrow agreement have been satisfied or
if the parties agree not to proceed with the purchase. Escrow or deposit funds will never be used
as operating funds until a sale is complete or the Broker/escrow agent has been instructed
otherwise in writing by all parties involved in the original agreement.

1.2 It is the duty of the Broker to be well informed on current market conditions in order to be in
a position to advise his/her clients as to the fair market value of any vessel under consideration.
YBAA Code of Ethics & Business Practice 2

1.3 It is the duty of the Broker to protect the public, to the best of his/her ability, against fraud,
misrepresentation and unethical practices.

1.4 The Broker will endeavor to ascertain all pertinent facts concerning all vessels for which
he/she accepts listings, so that he/she may present a fair and honest description of the vessel.

1.5 The Broker will not be party to the naming of any false consideration in any document.

1.6 The Broker in his/her advertising will be especially careful to present a true picture of the
vessel and/or its condition and will not advertise without disclosing his/her name, nor permit
his/her sales people to use the individual’s name or telephone numbers, unless the sales person's
connection with the Broker is obvious in the advertisement.

1.7 The Broker, for the protection of all parties with whom he/she deals, will see that financial
obligations and commitments regarding yacht transactions are in writing, expressing the exact
agreement of the parties and that copies of such agreements, at the time they are executed, are
placed into the hands of all parties involved.

1.8 Process for public complaints brought against YBAA Broker:

1.8.a. Complaints from the public concerning any YBAA member broker will only be
initiated by a written submission from the complainant to the YBAA office, clearly denoting
the nature of the complaint and the desired resolution or remedy. The YBAA office will then
request written response from the Broker. Failure by the Broker to respond within 30 days of
the request and/or to abide by the procedures noted herein may result in suspension of their
YBAA membership privileges, with notification of such suspension to the YBAA
membership. If the Broker is CPYB certified, notification will also be forwarded to the
CPYB Certification Advisory Council.

1.8.b. The YBAA Office will then forward all related correspondence to the YBAA
Professional Standards and Ethics Committee and to the Business Practice Review
Subcommittee, maintaining records of all such correspondence in the YBAA files.

1.8.c. The Business Practice Review Subcommittee will review the case, in order to render a
decision and/or recommendation on the matter within four weeks of the original complaint
date. The Subcommittee will forward, in writing, copies of its final decision and/or
recommendation to the complainant, the Broker, the YBAA office and the Professional
Standards and Ethics Committee.

1.8.d. If the Broker is found to have been in violation of the YBAA Code of Ethics, the
decision will be forwarded to the Professional Standards & Ethics Committee and to the
member brokerage firm principal with whom the broker is employed or contracted. The
principal will be asked to respond to the YBAA Professional Standards and Ethics
Committee, acknowledging the problem and defining the actions they will take to ensure that
no further such violation occurs. The decision will be kept on file in the YBAA office and, if
the broker is CPYB certified, forwarded to the CPYB Certification Advisory Council.

1.8.e. If the same Broker is found guilty of a second violation of the Code of Ethics, the
Broker, and their employing brokerage will be suspended from YBAA membership for one
year, after which membership reinstatement will be considered upon request of the brokerage.
YBAA Code of Ethics & Business Practice 3
The Professional Standards and Ethics Committee decision regarding the suspension may be
published in YBAA’s Yacht Broker News newsletter and/or referred to the CPYB
Certification Advisory Council. A record of all such actions will be maintained by the YBAA
office.

1.8.f. If the same Broker is found guilty of any third violation of the Code of Ethics the
Broker will be permanently terminated from membership in YBAA. The broker’s employing
member firm will also be reviewed by the Professional Standards and Ethics Committee for
possible suspension or termination. The loss of such memberships may be reported in the
Yacht Broker News.

SECTION 2. RELATIONS WITH THE CLIENT

2.1 In accepting employment as an agent, the Broker pledges him/herself to protect and promote
the interests of the clients. The obligation of absolute fidelity to the clients' interest is primary,
but does not relieve the Broker from the obligation of dealing fairly with all parties in this
transaction.

2.2 The Broker will neither acquire an interest in, nor purchase for him/herself, for any member
of his/her immediate family, for his/her firm or any member thereof, nor for any entity in which
he/she has a substantial ownership interest, vessels listed with him/her or his/her firm, without
making the true position known to the listing owner. In selling any vessels owned by him/her, or
in which he/she has such interest, all such facts should be revealed to the purchaser.

2.3 The Broker will neither submit nor advertise vessels without authority. In any offering, the
price quoted will not be other than that agreed upon with the Sellers as the offering price.

2.4 All offers received by the Listing Broker will be transmitted to the Seller in a timely fashion
and with a timely response to the Co-Broker or Buyer. All information regarding an offer will be
presented to the Seller without prejudice.

2.5 In the event that more than one offer on a specific vessel is made before the Seller has
accepted an offer, all additional offers presented to the Broker, whether by a prospective
purchaser or another Broker, will be transmitted to the Seller for his/her consideration. In the
event that a Broker, brokerage house or central agent has received more than one offer prior to the
acceptance of any offer, all offers will be presented to the Seller. The Broker will act on the
instructions of the Seller as to which offer will be accepted and/or negotiated. If an offer is made
after Seller has previously accepted an offer, the Seller will be made aware of its existence.

2.6 The following outline presents recommendations for Brokers to follow when several offers
are presented at approximately the same time. The following procedures are endorsed as fair and
reasonable, although not necessarily the only fair and reasonable procedures that can be
followed.

2.6.a In the event that multiple offers are presented to the Seller the Listing Broker will
follow the instructions of the Seller regarding the manner of continuing negotiations with
multiple prospective Buyers. These instructions will not only address the method of
determining which offer will be accepted, but will also address whether the Seller wishes the
existence of other current negotiations to be revealed to other Brokers and Buyers.
YBAA Code of Ethics & Business Practice 4

2.6.b Should the Seller seek the Listing Broker's advice for handling simultaneous
negotiations, it is recommended that the existence of other negotiations be revealed, in order
to minimize concerns by other Buyers and Brokers should they learn that another negotiation
was in progress. Furthermore, it is usually in the Seller's best interest that each Buyer knows
that the yacht in question is in high demand.

2.7 Recommended procedure for processing multiple offers - "The sealed Bid":

2.7.a. The Seller will instruct the Listing Broker to request, by a specified deadline, one final,
best offer from all Buyers who have made offers. The Seller may also convey the minimum
price he/she is willing to accept.

2.7.b. The Seller will, at the specified time, select the offer he/she considers most acceptable,
if any, and will respond either by accepting that offer or by requesting more information upon
which to base his/her decision. If more than one offer is equally acceptable, the acceptance
will be given to the party whose deposit was first placed into escrow by the Broker who
received the offer. The advantages of this procedure are:

2.7.b.1. It re-assures the prospective Buyers that they are not in a "bidding war" against
an unseen competitor. They may submit sealed, final bids. Experience shows that this
procedure lessens the likelihood that all or most of the Buyers will simply withdraw from
negotiations when they discover that they are bidding against someone else.

2.7.b.2. It gives the Seller some chance that the final selling price will be higher than
his/her counter- offer.

2.8 Alternative procedure - "First come, first served":

2.8.a. The Seller will instruct the Listing Broker to present a counter-offer to each
prospective Buyer via the Broker who obtained the original offer, with the understanding that
the Seller will accept the offer of the first Buyer to meet this price and his/her terms.

2.8.b. The counter-offer should be transmitted to all Buyers as quickly as possible and,
should a Broker and/or Buyer not be immediately reachable, the process of transmitting the
counter to the other Brokers and/or Buyers should continue without delay. If this procedure is
followed, it is essential that a precise deadline be specified for receipt of all bids by the
Listing Broker.

2.8.c. The advantage of this procedure is that it motivates all Buyers to be the first to meet
the counter-offer without fear that they might pay more than the lowest price that the Seller
will accept.

2.8.d. The procedure for handling any multiple-offer situations should be clearly discussed
with the Seller. Ultimately, it is the Broker's obligation to act as the Seller desires and by
whatever guidelines the Seller decides. All Buyers should be fully apprised of whatever
solution is decided by the Seller.
YBAA Code of Ethics & Business Practice 5

SECTION 3. RELATIONS WITH HIS FELLOW BROKER

3.1 The Broker will not voluntarily disparage the business practice of a competitor, nor volunteer
an opinion of a competitor's transaction. If his/her opinion is sought, it should be rendered with
strict professional integrity and courtesy.

3.2 The Broker and/or Brokerage firm who holds a Central Listing will be respected. A
Brokerage firm will not solicit a Central Listing from a Seller while that Seller has a Central
Listing agreement with another Broker. A Broker cooperating with a listing Broker will not invite
the cooperation of a third Broker without the consent of the listing Broker.

3.3 The Broker will cooperate with other Brokers on vessels listed by him/her on a Central
Listing basis whenever it is in the interest of the Seller, sharing commissions on a previously
agreed basis. Negotiations concerning vessels listed on a Central Listing basis will be carried on
with the listing Broker, not with the Seller, except with the consent of the listing Broker.

3.4 When a Broker obtains a Central Listing, he/she will endeavor to distribute the listing to
corresponding Brokers as quickly as possible. Central Listings and shared Open Listings are
generally shared on a commission basis, agreed to beforehand as a matter of policy, or agreed
upon by the cooperating parties negotiated on a particular sale. Should the central or loaning
Broker show the boat or perform work above and beyond the customary effort of providing the
listing and negotiating with the Seller, the commission arrangements should be reconsidered by
the parties involved.

3.5 The selling Broker is the Broker who obtains a Purchase and Sale Agreement signed by both
Buyer and Seller Broker along with accompanying deposit. Deposits on brokerage transactions
(in an amount acceptable to Seller) will be handled in accordance with the provisions of the
YBAA Yacht Purchase and Sale Agreement and the YBAA Code of Ethics.

3.6 Appropriate Response When a Customer Elects To Switch Brokers After Attempting a
Purchase:

3.6.a. Proper respect for one's fellow Broker requires that a Broker recommend to a
prospective Buyer that the Buyer finalize negotiations with the Broker with whom
negotiations were initiated. A listing Broker is not responsible for ensuring that a prospective
Buyer completes the negotiation on the yacht with the Broker who first obtained the Buyer’s
offer.

3.6.b. A listing Broker should not permit a prospect to switch negotiations to any member of
the listing Broker's firm unless he/she is prepared to pay the Broker who first initiated the
negations the full commission that he/she would have received if that Broker had completed
the sale in a normal manner, or unless alternative mutually satisfactory terms can be arranged
by the Brokers involved.

3.6.c. Should a buyer attempt to continue negotiation with a member of the listing Broker's
firm, and should he/she insist that he/she is unwilling to work with a Broker to whom he/she
submitted a previous offer, the appropriate response is to advise the Buyer that he/she may
choose any firm other then the listing firm to continue negotiations. If he/she wishes, the
listing firm may provide a list of YBAA members from which to choose another Broker.
YBAA Code of Ethics & Business Practice 6

3.6.d. For the purposes of this section "negotiations" are defined as when an offer is made,
and an "offer" is defined as the transmittal of a Purchase and Sale Agreement (signed by the
prospective Buyer) and a deposit (whether or not cashed by the receiving Broker) to a Broker
who, in turn, forwards the offer to the listing Broker (even if only forwarded orally).

3.7 Binding Arbitration Procedure: When A Dispute Arises Between Two Brokers, The Brokers
May Choose To Submit Their Case To Binding Arbitration As Follows:

3.7.a. Each Broker shall select one member at large from YBAA; these two members shall
together agree on one other member. These three brokers shall comprise the Binding
Arbitration Committee for the dispute. Brokers are advised to select their arbitrator based on
the person’s knowledge and experience in the business.

3.7.b. Each Broker shall submit a written statement of the case to the members of the
Binding Arbitration Committee.

3.7.c. Each Broker shall then appear in person for a hearing before the Binding Arbitration
Committee

3.7.d. The Binding Arbitration Committee shall render its decision, which shall be binding
on both parties. A written report of their decisions shall be sent to the YBAA Executive
Committee and to the chairman of the Professional Standards & Ethics Committee, and to
both parties. In addition, if either broker is CPYB certified, the report will be sent to the
CPYB Certification Advisory Council to take any action they deem is appropriate. The
Professional Standards & Ethics Committee has the option of publishing the decision in the
YBAA Yacht Broker News newsletter.

SECTION 4. RELATIONS WITH YACHT YARDS, MARINAS, YACHT CLUBS AND
OTHER SUCH FACILITIES

4.1 Maintenance of good relations between yacht yards, marinas, yacht clubs and Brokers is
mandatory. The Broker will be aware of, and adhere to, any rules, regulations and insurance
requirements of yacht yards, marinas, yacht clubs and other such facilities regarding the
requirements for subcontractors doing business in such facilities. Accordingly, the following
procedures are recommended:

4.1.a. When a listing is received by a Broker, the Broker will ask the seller to inform the
yacht yard that the Broker has permission to show the yacht.

4.1.b. The Broker will inform the seller that any agreement the seller has with the yard
regarding commission fees will not affect the Brokerage commission.

4.1.c. When showing the yacht, the Broker will check in at the yard office, and show the boat
without assistance, whenever possible. If assistance is required, the Broker will arrange
payment for all necessary fees. The yacht should be left as it was found.

4.1.d. If the Broker is unable to show the yacht, the Broker may attempt to make
arrangements with the yard to have them show it. The yard will then be advised of the
YBAA Code of Ethics & Business Practice 7



 
 

Nashville Yacht Brokers, Inc.

One Vantage Way
Suite C-120
Nashville, TN 37228, United States

Toll-free (800) 959-9444
Tel (615) 259-9444
Fax (866) 539-7158
Email Us

http://nashvilleyacht.com


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