Yacht charter in Cyprus: how to avoid legal pitfalls

Yacht charter in Cyprus has long ceased to be the exclusive prerogative of the elite. Today, tourists, businessmen, and company owners are increasingly turning to charter sea vessels—both for leisure and for business meetings in an informal setting.

However, behind the apparent simplicity of the service lie legal subtleties. Many charterers sign standard contracts without delving into the details, which entails real risks — from losing their deposit to being held liable for technical breakdowns or accidents on board.

What to check before renting a yacht

Legal security for renting begins long before signing the contract.

It is worth paying attention to the following:

• whether the company has a license to rent vessels in Cyprus;
• whether the yacht is registered in the registry (Cypriot or foreign) and the name of the owner;
• whether the technical inspection and commercial use permit are valid.

If the lessor is a private individual, it is also worth requesting documents confirming ownership. Renting a yacht without the appropriate permission may violate the law and result in the contract being canceled.

What contracts are valid under the law

Cyprus has a common law system, where the content of the contract is key, not its form. This means you can use both standard and custom agreements, as long as they follow local rules.

One of the typical mistakes made by charterers is agreeing to terms and conditions that are drawn up solely in the interests of the charterer. Foreign charter contract templates are particularly risky: they rarely take into account the specifics of Cypriot law and may automatically place all responsibility on the client.

For a contract to be valid, it must include:

• a description of the vessel (type, registration, flag);
• details of the parties and the lease term;
• deposit terms and grounds for retention;
• allocation of liability for damage and force majeure.

The contract must be signed by both parties and drawn up in English at a minimum. When chartering with a crew, it is important to ensure that the captain and crew have valid maritime licenses, as well as separate insurance that is not related to the vessel’s insurance. This is a mandatory requirement under Cypriot law.

Who is responsible for damage and force majeure

The liability of the parties depends on the terms of the contract. Most disputes arise from vague wording regarding breakdowns, damage to the vessel, or cancellation of the trip due to external causes.

If a yacht is rented without a crew, the renter is fully responsible for its condition. Even minor defects can be grounds for withholding the deposit.

When renting with a crew, some of the risks may be transferred to the shipowner, but only if this is expressly stated in the contract. Otherwise, all responsibility remains with the customer.

Force majeure events (storms, actions of authorities) must be clearly specified. Without a clear indication in the contract of who is exempt from liability and in what cases, the parties risk being left without legal protection in a critical situation.

Nuances of marine charter insurance

Most standard policies only cover the interests of the shipowner and do not extend to the charterer or passengers. This creates a risk, especially in the event of damage caused to third parties or damage to equipment. Before signing a contract, you should request a copy of the insurance certificate and carefully review the terms and conditions. It is important that the policy covers not only the vessel itself, but also any claims related to its operation.