Boat / Yacht Surveys - Do buyer paid surveys get sold to brokers or sellers?

[thvoyager]

If you are looking for a new boat / yacht, and pay £xxx for a new survey, and decide to not go forward with the purchase, will brokers or sellers usually buy it from you at a slight discounted price?

 

[Sandy]

Not in my experience. You, the buyer, commission the report. It belongs to you and their might be a caveat about selling it.

 

[RJJ]

There is no reason why not. It's yours, and the seller might consider it useful either as a guide for what must be fixed, or to offer to a future buyer which can speed things along and save a few quid.

The caveat typically is that the surveyor is under no contract to whoever buys the survey from you and therefore has no recourse should something go wrong. But there's pretty little recourse against surveyors anyway, for good and bad reasons.

 

[thvoyager]

Not in my experience. You, the buyer, commission the report. It belongs to you and their might be a caveat about selling it.

Just seems like a massive waste of say £500/£900 on a one off payment, why would it not be more economical to sell that on if you did not want to pursue, if you have paid for it surely you can do what you want with it? It's a free market after all.

 

[Cardinal]

I would certainly in those circumstances invite the seller to advise other potential buyers of the surveys availability inviting the seller to pass my contact details on. The surveyor’s terms would likely restrict the usefulness of this course of action however.

 

[lustyd]

If there's something on there that was bad enough to make you back out, that's a huge red flag to the next person. Why would I pay £500 to find out why you were desperate to pull out, having paid £900 to find a reason to pull out? Surely if I found out someone pulled out after survey I'd ask why and run!

 

[KevinV]

I would certainly in those circumstances invite the seller to advise other potential buyers of the surveys availability inviting the seller to pass my contact details on. The surveyor’s terms would likely restrict the usefulness of this course of action however.

Why would the seller do this? The new potential buyer would (obviously) ask what offer was accepted, and what the reason for pulling out was - neither being in the seller's interests

 

[Rafiki]

This is a bit of a minefield. Of course the survey belongs to the person who commissioned it, and only he will have a contractual relationship with the surveyor, so anyone you pass it on to ( or sell it on to) would not have a contractual relationship with the surveyor, making it very difficult to sue him for missing something.

However, when you make on offer for a boat through a broker you are usually asked to sign an agreement or contract to go ahead with the purchase unless the surveyor finds significant defects which the seller does not or cannot put right or does not want to reduce the price commensurately. If and when the surveyor finds major defects and you, the potential purchaser, indicate that you will back out then then the broker will expect to be provided with a copy of the Report ( and the initial agreement you signed probably requires you to provide it to the broker). If the Broker is proactive he will use the report to try and convince the vendor to deal with the problems or significantly reduce the price. In the meantime you as the initial interested party have walked away as you wanted the boat this year and the repairs will take 3 months.
When a second interested party comes along the broker has a quandary; he knows there are major defects and has a copy of the survey. So in my very recent experience when asked by the second potential purchaser, why the first one dropped out, he hands across a copy of the survey while simultaneously using a well-worn form of words to avoid him taking on liability for the contents of that survey.
In my case it was actually handed across with a quote from the boatyard to address all the issues, with the clear implication that everyone now had the same knowledge and let the negotiations begin. PS my wife told me to walk away, we don't need two boats even for a few months.

 

[thvoyager]

This is a bit of a minefield. Of course the survey belongs to the person who commissioned it, and only he will have a contractual relationship with the surveyor, so anyone you pass it on to ( or sell it on to) would not have a contractual relationship with the surveyor, making it very difficult to sue him for missing something.

However, when you make on offer for a boat through a broker you are usually asked to sign an agreement or contract to go ahead with the purchase unless the surveyor finds significant defects which the seller does not or cannot put right or does not want to reduce the price commensurately. If and when the surveyor finds major defects and you, the potential purchaser, indicate that you will back out then then the broker will expect to be provided with a copy of the Report ( and the initial agreement you signed probably requires you to provide it to the broker). If the Broker is proactive he will use the report to try and convince the vendor to deal with the problems or significantly reduce the price. In the meantime you as the initial interested party have walked away as you wanted the boat this year and the repairs will take 3 months.
When a second interested party comes along the broker has a quandary; he knows there are major defects and has a copy of the survey. So in my very recent experience when asked by the second potential purchaser, why the first one dropped out, he hands across a copy of the survey while simultaneously using a well-worn form of words to avoid him taking on liability for the contents of that survey.
In my case it was actually handed across with a quote from the boatyard to address all the issues, with the clear implication that everyone now had the same knowledge and let the negotiations begin. PS my wife told me to walk away, we don't need two boats even for a few months.

So ultimately it's the 2nd potential buyer who wins at the cost of the 1st buyer who forked out the £1000 for a survey?

 

[northwind]

I agree with Rafiki, I wanted to walk away from a potential purchase due to a major defect, I had to provide the survey to the broker as evidence of my right to break the contract of sale.

 

[thvoyager]

I agree with Rafiki, I wanted to walk away from a potential purchase due to a major defect, I had to provide the survey to the broker as evidence of my right to break the contract of sale.

Right to break away? Surely broker is not going to take you to court?! Or do you mean to get some of your holding money back?

 

[northwind]

Right to break away? Surely broker is not going to take you to court?! Or do you mean to get some of your holding money back?

The contract commonly used by brokers that you sign as an agreement to purchase has clauses in it, including covering rejection of the boat after survey. Generally you agree to purchase and yes the other party could take you to court or seek damages if you forfeit.

 

[WindyWindyWindy]

Yeah, basically the survey is too late to be of much use.

You should view it with a surveyor prior to offering, much more useful even though it doesn't have the contractual weight of a survey.

I really wanted to pull out after a surveyor pointed out that the gearbox was [Inappropriate content removed], but the cost of doing another survey on another boat would've near enough covered the cost of the box so I just thought sod it see what happens. Seller wouldn't move on price, and the box is actually still going ok, if a bit leaky, 3 years on.

 

[Tranona]

Right to break away? Surely broker is not going to take you to court?! Or do you mean to get some of your holding money back?

Perhaps you should invest in the RYA book on buying and selling boats as it will answer most of your questions.

However, just to clarify some of the issues raised here. Boats sold through brokers use a model form of contract , often the ABYA one which lays out the rights and obligations of the buyer and seller. An offer is accepted and a deposit paid (usually 10%) subject to survey and there are clauses that lay out the right to renegotiate or withdraw after the survey. If the buyer withdraws for whatever reason the deposit is returned less any expenses such as haulout and relaunch. It is reasonable to provide the seller with a copy of the survey to support any price negotiations or a withdrawal, but the ownership of the survey stays with the buyer. It is quite possible to ask the surveyor to assign the survey to a third party (either the seller or another buyer) for a fee. This can be useful for example to another buyer who is happy to take that survey and to use it for insurance purposes.

Last year I had a survey on a boat I was trying to buy and the contract we agreed had a modified clause that said any survey was limited to the structure of the boat - in other words no nitpicking on things that were visible and declared. I was happy with this as it was a wooden boat and I was only concerned about the structure. The survey found 2 serious structural defects and 2 less serious. Enough for me to withdraw. The seller was completely unaware if these defects and although he offered to correct them, it was enough to put me off the boat and my deposit was returned. I provided him with a copy of the survey and he used that as a basis for the repairs and subsequently had the same surveyor approve the repairs. This means he was able to show any future buyer evidence of the repairs.

You can look at surveys in a number of ways. The first is to give you confidence that boat is sound, The second is a cheap lesson if it stops you buying a duff boat. Third is the cynical view that it is all an expensive waste of time. Fortunately most sellers are honest and sell in good faith so transactions go smoothly, but boats are complex things, particularly as they get larger and historical evidence of history, both ownership and maintenance is often sketchy so due diligence in all areas at the point in time of purchase seems wise as you have to live with the consequences of your purchase - that is you have no comeback on the seller once the transaction is complete.

 

[Resolution]

As always, Tranona writes good common sense.
I have a 4th rationale for a survey, in the case of a yacht being put up for sale overseas or far from most likely buyers. With some sadness, I have just placed my Sabre 426, Resolution, up for sale with a leading broker in Greece. We are commissioning a Sellers Survey by a well-known surveyor, which will be made available FOC to interested buyers. So before taking the time and expense of flying out to look at the yacht they should have a fair idea of what it is. Additionally, any faults identified in the survey will have been disclosed and therefore removed from subsequent price negotiations. Bit back to front, but I think we can make it work well.
Of course I am now a quivering wreck until the results of the survey are known…..

 

[pandos]

I agree with Rafiki, I wanted to walk away from a potential purchase due to a major defect, I had to provide the survey to the broker as evidence of my right to break the contract of sale.

I nearly bought my first boat, but withdrew following a negative survey, I was very happy to sacrifice the survey fee, and the surveyor gave me a discount on the next survey I commissioned.

I sold my last boat on the basis that it was subject to major issues in the survey that would make the boat particularly dangerous to .take to sea, with the proviso that a surveyor had to be a professional surveyor who was aware that his survey would be relied upon to break the sale and would be provided to me....

I bought my next boat following a withdrawal by a prospective purchaser on foot of a survey, which the broker subsequently provided to me.

My subsequent purchase was made on the basis that it was not subject to survey. But subject only to an engine test.

The fault in the report which allowed the exit was osmosis...none was present when I examined it or has any appeared after 16 years of ownership.

If I was selling I would have a fresh insurance survey commissioned and provide this on a without prejudice basis to prospective purchasers.

 

[oldgit]

Bought a boat recently, broker made me aware of a survey commissioned by the previous owner.
Survey was 6 months old.
Made offer on the boat, subject to sight of that survey and a sea trial.
Owner and broker both agreed to this. Offer made and eventually accepted subject to those caveats.
Survey revealed problems which resulted in the previous owner having to pay serious money to get the boat into a safe seaworthy and insurable condition.
Owner produced the survey and all the invoices paid to sort the problems, sea trial went well.
Paid money and bought the boat home.

 

[Keith 66]

Any survey helpfully provided by a seller or broker should be regarded with extreme caution even downright scepticism, In the above case it may have worked out ok as remedial works had been carried out. In many cases the opposite would be true. I have seen many cases where a dealer would say to the surveyor, "I want two reports on that boat, one for me & one for the punters", The reports both made on the same day after a cursory poke round would be utterly different. Yet the punters would accept them without question secure in the knowledge that they were saving themselves a few hundred quid.
I have seen people get caught out by seller provided surveys many times. Boats with good surveys with keels falling off, Westerlys with bilge keel movement & accompanying cracks in the hull, Westerly's Centaurs that had supposedly been repaired & reinforced yet had either never been done at all or were terminally bodged.
Caveat emptor!

 

[Spirit (of Glenans)]

Just seems like a massive waste of say £500/£900 on a one off payment, why would it not be more economical to sell that on if you did not want to pursue, if you have paid for it surely you can do what you want with it? It's a free market after all.

It's a free market, but is it much of a market? i.e. will anybody want a survey that they have not commissioned themselves?

 

[thvoyager]

Bought a boat recently, broker made me aware of a survey commissioned by the previous owner.
Survey was 6 months old.
Made offer on the boat, subject to sight of that survey and a sea trial.
Owner and broker both agreed to this. Offer made and eventually accepted subject to those caveats.
Survey revealed problems which resulted in the previous owner having to pay serious money to get the boat into a safe seaworthy and insurable condition.
Owner produced the survey and all the invoices paid to sort the problems, sea trial went well.
Paid money and bought the boat home.

So you could either accept a discount on boat or see if seller will get the boat seaworthy and conduct the sale?
And as for insurance, id there a time limit on how old a survey should be before it is considered insurable?