Undelivered Yacht Built in Turkey: Recovering Advances and Checking Rights in the Hull

Classify the contract and identify the legal builder

A bespoke yacht construction project commonly includes an undertaking to produce a defined result against payment. Article 470 of the Turkish Code of Obligations, Law No. 6098 defines a contract for work in those terms. However, the English heading yacht purchase is not decisive. Supply of an existing vessel, a partly completed hull, design services and a commissioned build can involve different obligations. Examine the agreed result, who supplies the materials, the acceptance process and the actual relationship before selecting a remedy.

Identify the company that signed as builder, the company receiving the instalments and the legal person controlling the yard. A broker, designer, shipyard and seller can be different parties. A payment to a broker is not proof, without the relevant mandate and receipt, that the builder received the same sum. Keep the corporate details, contract signatures, invoices and bank instructions together. If a representative signed, establish the basis and scope of that person’s authority.

The vessel must also be identifiable. Use the contractual build number, design reference, dimensions and any observed hull or yard identifier. Record changes of project number or yard location. A general photograph of a yacht under construction does not prove that the pictured vessel belongs to the client’s project. Identification becomes especially important when seeking an inspection, asking about security or responding to an assertion that the hull was reassigned to another customer.

Reconstruct the agreed progress and payment schedule

Build a schedule containing the original delivery date, milestones, permitted extensions and approved variations. Distinguish a contractual milestone from a builder’s later progress forecast. The payment schedule may require instalments upon specified construction events, surveyor certification or delivery of documents. Each payment request should be compared with the agreed trigger. An invoice describing a stage as complete is evidence of a demand, not conclusive technical proof that the stage was reached.

Article 479 links the ordinary payment obligation to delivery and addresses separately priced staged deliveries. Parties may have a specific contractual payment arrangement that needs to be examined. In a yacht project, advance financing, milestone certification and ownership provisions must not be collapsed into one question. Paying a stage invoice can satisfy a payment obligation without proving that legal ownership of all materials passed on that date.

Record which variations changed price, construction time or performance standards. Preserve the client’s instruction, the builder’s acceptance and any agreed extension. A later choice of equipment may affect the schedule, but the builder must still identify the contractual and factual basis of the delay attributed to that choice. Likewise, work required to correct an existing defect should not automatically be treated as a paid customer upgrade.

A progress table should show the evidence for every entry: survey report, dated yard record, supplier delivery document or correspondence. Mark unknown stages instead of filling them with estimates. This allows an independent technical reviewer to assess the remaining work against the delivery programme. The legal analysis depends on that evidence, particularly when the buyer seeks to act before the final delivery date has passed.

Article 473 permits action before delivery in defined circumstances

Article 473 addresses failure to start on time, delay contrary to the contract and a delay not attributable to the client which clearly shows, on the available assessment, that the contractor cannot complete the work by the agreed date. When the statutory conditions are established, the client need not wait until the contractual delivery day to withdraw. The provision requires more than dissatisfaction with the pace or a speculative forecast.

Compare the actual state of construction with the tasks still required, agreed testing, delivery documents and realistic sequencing. A technical assessment should identify its factual basis and the date of inspection. If access was refused, preserve the access request and refusal. If the builder relies on an extension clause, identify the qualifying event, notice requirement and duration claimed. The original delivery date should not silently remain the benchmark after a valid amendment.

Responsibility for delay must be addressed honestly. Missing client specifications, late agreed payments or instructions to suspend can affect the analysis. Include records that support the builder’s explanation as well as those supporting the buyer. A legally credible withdrawal notice identifies the actual delay and why the relevant statutory or contractual conditions are met. Calling the project abandoned without investigating work still taking place creates an avoidable factual weakness.

Article 473 also contains a distinct mechanism where, during construction, faulty or contractually inconsistent performance is clearly apparent because of the contractor’s fault. It allows a suitable period and warning concerning correction or third-party continuation at the contractor’s risk and expense. That route should not be confused with unrestricted permission to enter the yard or remove equipment. Access, ownership and the authorised remedial step require separate attention.

Distinguish builder default from voluntary cancellation

Where the builder’s default is relied upon, Articles 117 and 123–125 provide the general framework for default, an appropriate additional period and alternative remedies, subject to the contract and applicable special provisions. Article 124 lists situations in which an additional period is unnecessary. The notice should state the performance demanded, relevant period and intended legal consequence accurately. An indefinite request for a refund does not necessarily make the required legal election clear.

A buyer’s decision to abandon a still-viable project is different. Under Article 484, the client can end an unfinished works contract by paying for the part performed and compensating the contractor’s entire loss. Our article on voluntary cancellation under Article 484 examines that account. A notice saying the client no longer wants the yacht can carry a different meaning from a notice invoking established builder default.

The parties can also negotiate an exit. A settlement should state which obligations end, the repayment amount and currency, dates, security, ownership of work and materials, release of documents and treatment of outstanding claims. Do not treat a proposed settlement as payment already received. If a release is required, its timing and scope should be coordinated with actual performance and the legal effect of any guarantee.

Calculate repayment from the contract and the chosen remedy

Begin with amounts actually paid, identifying payer, recipient, date, currency and purpose. Include direct supplier payments only when their legal relationship to the build is established. Separate advances, security deposits, broker commissions and payments for separately delivered design work. The contract may allocate them differently. A single total described as deposit can conceal several obligations with different repayment consequences.

Under Article 125, withdrawal following the relevant default route releases reciprocal performance obligations and permits return of performance already supplied, with the further consequences governed by that provision. That does not eliminate the need to account for what each party received. If the client retains equipment, designs or part of the work, the legal and financial treatment must be addressed rather than claiming both the entire price and unqualified ownership of every project asset.

Examine any deduction against its basis. The builder should identify performed work, authorised variations or another supported entitlement rather than use an unexplained percentage. Equally, a buyer should not assume that all work has no value merely because the complete yacht was never delivered. Technical valuation and legal entitlement answer different questions: an expert can describe work and value, while the relevant contract and remedy determine what is payable or returnable.

A fixed price and an approximate estimate require different analysis. Article 480 governs a lump-sum arrangement and its exceptional adaptation conditions; Articles 481–482 address other price situations. Our contractor price-overrun guide explains those distinctions. Do not convert a dispute about extra charges into an unsupported claim that any increase automatically entitles the buyer to recover every payment.

An advance is not a substitute for investigating ownership

The repayment claim is a personal claim against the responsible debtor. Rights in a hull, machinery or materials must be established from the relevant ownership rules, contractual arrangements and registry position. A clause labelled ownership on payment needs careful examination of its subject matter and legal effectiveness. The buyer’s bank transfers alone should not be presented as a universal certificate of ownership over everything in the yard.

Read Article 935 of the Turkish Commercial Code, Law No. 6102 when determining which maritime provisions apply. It extends specified rules to pleasure yachts and specified construction-related rules, where compatible, to vessels built in Turkey for foreign states or their nationals. Commercial use, registration and the vessel’s stage can therefore matter even when the buyer intends only private cruising.

Before attempting collection, obtain a reliable description of the asset and investigate existing rights. The yard may contain equipment supplied by third parties, property allocated to other projects or assets subject to security. A builder’s promise to hand over a hull does not answer claims by those parties. Physical possession, legal ownership and priority against creditors are separate questions. Unauthorised removal can create additional disputes instead of securing repayment.

Review a refund guarantee and a construction mortgage separately

A refund guarantee should be read as an independent document. Identify the issuer, beneficiary, maximum amount, currency, expiry, demand conditions and required supporting documents. Confirm whether amendments to the build contract affect the guarantee and whether the original instrument is needed for a demand. An email stating that a bank will provide a guarantee is not the same as an issued instrument. A guarantee also does not eliminate the need to make a compliant demand before any applicable expiry.

Articles 1054–1055 of the Commercial Code regulate mortgages over vessels under construction. The statute sets conditions concerning the construction stage, continuing identification of the build and the expected size, and requires the agreement and registration prescribed by Article 1055. This is a formal security mechanism, not a right that arises merely because the buyer paid instalments. Availability must be checked against the particular project and parties.

The formal conditions are concrete. Article 1054 excludes a construction that will measure less than eighteen gross register tons when completed. The build must be clearly and continuously identifiable by its visible name and number within the construction-stage conditions in that article. Under Article 1055, the mortgage requires agreement between the construction owner and creditor and entry in the register for ships under construction. The agreement must be written with notarised signatures, or made at the ship registry office. These steps must be completed; describing an advance as secured in an invoice does not replace them.

Article 1056 addresses the scope of that mortgage and excludes specified items, including components not owned by the construction owner. Article 1057 addresses the continuation of rank after completion. These provisions demonstrate why a list of materials and a registry investigation are useful. Do not assume that security over a project automatically includes every engine, fitting or insurance payment connected with the yard.

Preserve the condition of the build before it changes

Construction can continue, stop, deteriorate or move while negotiations proceed. A dated technical inspection should identify the vessel, the inspected areas, inaccessible parts, documents reviewed and limitations. Preserve plans, agreed specifications and revision histories. Record engine or equipment identifiers where lawfully available. Photographs should be linked to the inspection date and build location rather than filed as an undifferentiated gallery.

Articles 400–405 of the Code of Civil Procedure provide a court evidence-preservation mechanism where legal interest is established. Explain the actual risk of loss or increased difficulty of proof. An expert inspection is not an automatic order transferring the yacht, freezing every yard asset or granting a refund. Each protective request requires its own conditions and an appropriate court or arbitral route.

Keep the financial evidence equally precise. Preserve payment confirmations and the instructions that preceded them, especially when the beneficiary name changed. Save the complete correspondence concerning delay, inspection and repayment. A chronology should distinguish an admission, a disputed assertion and an unaccepted offer. Accurate classification makes the file useful for both settlement and formal proceedings.

Plan the practical handover within any agreed exit

An agreement transferring an unfinished build needs an inventory of the hull, equipment, drawings and documents actually to be delivered. Identify excluded items, who bears transport and yard charges, and how access will be coordinated. Obtain the relevant owner’s or rights holder’s participation where required. A settlement signed only by the builder cannot safely be assumed to extinguish an independent supplier’s rights.

The handover record should distinguish possession of an item from acceptance of its technical condition and settlement of the financial account. Document missing components and unresolved defects without inventing admissions. Agree how the buyer or replacement contractor can use necessary plans and technical information. Physical transfer without those documents can leave the project difficult to complete even after the immediate yard dispute ends.

Coordinate governing law, forum and a workable recovery objective

An international yacht contract may choose a governing law and contain arbitration or court provisions. Article 24 of Law No. 5718 is a starting point for contractual choice-of-law analysis, but mandatory rules and special issues need separate treatment. The place where the hull sits, the builder’s registered office and the forum clause should all be recorded. A Turkish yard location does not by itself resolve every international jurisdiction question.

The buyer should identify the practical objective before legal notices are finalised: completion under enforceable safeguards, repayment, delivery of a legally owned unfinished vessel or a negotiated transfer. Each requires different evidence and implementation. A realistic recovery plan connects the legally supported claim with the debtor, available security and assets that can lawfully answer it. Overseas residence does not prevent preparation of that file, but it makes precise authority, reliable local inspection and coordinated document handling especially important.

Frequently asked questions

1. Can I withdraw before the yacht’s delivery date?

Article 473 permits that in specified delay circumstances, including where the evidence clearly establishes that timely completion is impossible for a reason not attributable to the client. A mere concern about progress does not establish the conditions.

2. Does every advance payment give me ownership of the hull?

No universal rule follows from payment alone. Investigate the contract, applicable ownership rules, registry position and third-party rights. A refund claim and rights in the vessel are separate matters.

3. What if I simply decide I no longer want the yacht?

For an applicable unfinished works contract, Article 484 provides a client-led termination route involving payment for completed work and the contractor’s loss. It should not be confused with withdrawal for established builder default.

4. Can I collect the unfinished yacht myself?

Do not assume a right to remove it merely because money is owed. Ownership, access, third-party rights and a lawful handover process must be established. A payment dispute does not create unrestricted entry to the yard.

5. Is a broker automatically responsible for the builder’s refund?

No. Examine the broker’s own contractual obligations, authority, receipt of funds and representations. Identify the actual debtor for each payment instead of treating all participants as the same legal person.

6. Does a technical report prove the refund amount?

It can establish progress, condition and valuation. The legal basis for repayment and any deductions still depends on the contract and the remedy chosen. Technical and legal conclusions serve different functions.

7. What should I check in a refund guarantee?

Check issuer, beneficiary, amount, currency, expiry and the exact demand requirements. Preserve the issued instrument and amendments. A promise to obtain a guarantee is not itself enforceable bank security.

8. Can a yacht under construction be mortgaged?

The Commercial Code permits construction mortgages subject to statutory conditions and formal registration. The project must qualify. An instalment payment does not automatically create such a mortgage.

9. Do foreign buyers fall outside the Turkish construction-vessel rules?

No blanket exclusion applies. Article 935 extends specified rules to vessels built in Turkey for foreign states or nationals where compatible. The relevant vessel and transaction still require individual analysis.

10. What is the first document bundle for a lawyer?

Provide the signed agreement, specifications, amendments, payment trail, progress and inspection records, notices, guarantee documents and known registry details. State whether the objective is completion, repayment or a lawful transfer of the unfinished vessel.

Official legal sources

• Law No. 6098 — Articles 117, 123–125, 470–473, 479–484
• Law No. 6102 — Articles 935, 1054–1058
• Law No. 6100 — Articles 400–405
• Law No. 5718 — Articles 24

Recorded primary-source check dates: 26 October 2026. The official Turkish legislation controls. A new publication-date check is still required.