How Your Charter Money Moves: Deposit, Balance, Escrow and APA

Six weeks before departure. Ten guests. Two payments left.

An email arrives from the broker. Same logo. Same signature.

It says the bank details have changed.

The client reads the new account number twice.

Then the client does something small. They call the number saved in their phone, not the number in the email.

The broker has sent nothing.

One phone call.

The short answer

In the standard MYBA charter agreement (2017 version), your money goes through a stakeholder who holds it, and not straight to the owner (Clause 20).
50% of the charter fee, less commission, goes to the owner on the date the charter starts, or the first working day after.
The APA goes to the captain before you embark. The balance goes to the owner after the charter, unless a written complaint has arrived.
Pay from an account in your own name, and check every set of bank details by phone.
Currency and intermediary banks cause more delays than anything else, so leave room in the calendar.

Your own contract governs. Clause wording differs between versions and contract forms, so ask your broker to show you the clause.

The route your money takes

Under Clause 20 of the standard MYBA charter agreement (2017 version), the broker passes your funds to the stakeholder. The stakeholder holds them and releases them on set dates. The contract does not tell the stakeholder to pay everything to the owner on signing.

What	Where it goes	When
50% of the charter fee, less commission	The owner	On the date the charter starts, or the first working day after
APA (advance provisioning allowance)	The captain	Before you embark
The balance	The owner	The first working day after the charter, unless the stakeholder has received written notice of a complaint
Security deposit, if the contract has one	Held by the stakeholder for the owner	Refunded without interest after the charter (see below)

Instalment dates are set in your own contract. Ask your broker for the dates in a short list, and put them in your calendar with a few days spare.

What happens to the balance if you complain

Clause 20 also holds the balance back when the stakeholder receives written notice of a complaint. The form shows a default of 14 days. In that window:

If you and the owner settle, the balance is released as agreed.
If neither side has appointed an arbitrator after the 14 days, the stakeholder pays the balance to the owner on the first working day after that.
If either side has appointed an arbitrator, the stakeholder holds the balance until an award or a settlement.

The key word is written. A phone call does not stop the clock. Our page on how a complaint actually works goes through what to put in the note, and our page on the first 24 hours covers what to do while you are still on board.

APA, the part that moves on board

APA is an advance for costs at cost: fuel, food, drink, berths. It is paid to the captain before embarkation and the captain keeps the accounts. Before you disembark, Clause 8 says the captain presents a detailed account of expenditure with as many supporting receipts as possible. A balance is repaid to you, or a shortfall is paid by you.

The same clause says cheques and credit cards are “not normally acceptable” for settling a shortfall. Have a way to settle that is not a card on the last morning. Ask your broker how much extra to keep available.

We cover this in full on is APA refundable.

Security deposits

Clause 17 provides for a security deposit. The amount is left blank on page one of the form. If there is one, the stakeholder holds it on the owner’s behalf. It can be used against damage or liability you cause.

The deposit is refunded without interest on the first working day after the charter ends, or after all outstanding questions are settled, whichever is later. In practice, deposits are rare on crewed charters. Check page one of your contract and ask if you see a figure.

How to pay safely

Pay from an account in your own name. A payment from someone else’s account can trigger a compliance check, and the money can be returned.
Check bank details by phone. Email can be spoofed. Call a number you already had before the email arrived.
Check the currency. A euro account and a dollar account are different things. A refund sent in euros to a dollar account can bounce back.
Allow for intermediary banks. A wire can sit with an intermediary bank for days. Ask your own bank for a trace document if it does.
Pay each instalment early. Do not send it on the due date.
Keep the confirmation. Send it to your broker the same day.

If a wire stalls, tell your broker the same day. A late payment can give the owner grounds to cite default, so it is better to ask for a written extension than to wait.

What your broker does

Answers the same day and always tells you when you will hear next.
Checks in personally on day 2 of the charter: “Are you having a 5-star vacation? If not, what can be done?”
Puts your issue to the yacht’s management in writing the same day.
Helps you put a complaint in writing on time, so your rights under the contract stay protected.
Pushes the owner for specific fixes, such as a technician or replacement equipment, and for credits for things not delivered, shown on your APA statement.
Keeps separate problems separate, so a payment question does not hold up a charter issue, and a charter issue does not hold up a payment.
After the charter, chases the APA account and any balance, and keeps you updated until it is closed.

Back to the overview: what happens when a yacht charter goes wrong. If your plans change, read cancelling a yacht charter.

Questions people ask

Who holds my money when I pay for a yacht charter?

Under Clause 20 of the standard MYBA charter agreement (2017 version), your broker passes funds to a stakeholder, who holds them and releases them on set dates. Ask your broker who the stakeholder is in your contract.

When does the owner get paid?

In the 2017 form, 50% of the charter fee, less commission, goes to the owner on the start date or the first working day after. The balance goes after the charter, unless the stakeholder has received a written complaint.

Is the APA part of the charter fee?

No. The APA is a separate advance for costs at cost, paid to the captain before embarkation. It is accounted for on board, with receipts.

Can I pay a yacht charter by credit card?

Ask your broker which methods your contract and the stakeholder accept. For APA shortfalls, the 2017 form says cheques and cards are “not normally acceptable”.

How do I know the bank details are real?

Phone your broker on a number you already had, and read the details back. Do it for every payment, even when the email looks right.

Why has my wire not arrived?

Intermediary banks can hold wires, and currency mismatches cause returns. Ask your own bank for a trace document and send it to your broker. Your broker can then chase the other end.

Make the call before you send the money.

Planning a charter? Start with our yachts, or see what to have ready before you talk to a broker. More guides like this one are in our Knowledge Base.