Buying a boat that has no docs

[classacitizen]

i'd be more concerned that no one mentioned there were no documents until after the survey stage.Before you'd made a financial outlay on the vessel.if i was on the level i'd be straight about it from day 1.for what its worth.is it a question of if you have to ask the question you already know the answer?

 

[classacitizen]

also if the seller has owned it since new and saying it wasn't cheap, how did he pay for it?cash?if not cash then there's a paper trail!!!

 

[Tranona]

The absolute essential is to establish that the seller is the beneficial owner. The only clear evidence of this is Bill of Sale from the builder or previous owner to the the current vendor. Other documents can be used to support his position such as insurance, marina bills, SSR etc which show that he has been the "keeper" but there is still the outside risk that the real owner is another. You may be able to get an indenmity from him to meet any 3rd party claims.

VAT is always a problem if the ownership trail is not clear. There are no records of it being paid except a copy of the invoice and (sometimes) a file copy with the original Builder/dealer/vendor. The risk is that it has been exported and re-imported without paying VAT. However, the responsibility for paying VAT is with the person that imported it, not with a subsequent purchaser.

Perhaps it is worth collecting all the documentary evidence there is available and seeking the advice of a specialist marine lawyer.

You will not get any help from HMRC as they will only refer you to their official advice. They have no way of knowing whether VAT has been paid, unless it is a private import when they collect the tax directly.

 

[jbweston]

AHoy2, I'm wondering what form of contract you've used.

If you've contracted on the RYA standard form then the seller is contractually obliged to provide you with the documents in the schedule and, of course, you and the broker should make sure before signing that the schedule includes the right documents (11 categories are suggested as those that should be 'normally available'). If the seller can't produce a document then he needs to make sure it's not included in the schedule - giving the buyer the choice whether to enter into the contract or not.

There's nothing to stop the buyer agreeing to an inadequate list if he wants, or even 'letting the seller off' from producing on completion the documents listed in the contract. Not wise, in my opinion, but certainly possible if the buyer wants to take the risk.

I can't remember what the YBDSA form says, but I can't imagine it lets the transaction proceed to a point where money has been spent while the documents to be produced are still subject to argy-bargy.

So if you've got a written contract, what's in it about documents to be produced? If there isn't a written contract, and the seller can't produce the basic documents showing how and when he bought the boat, whether she's VAT paid, RCD compliance, etc, then I can't see how he's going to get anyone to buy her. She could be worth a lot less than zero (for example, mortgage or HP to be paid off by whoever is holding the parcel when the music stops, or impossible to sell until expensive action has been taken to get the documents in order such as paying VAT on her).

I'd be very disinclined to accept a boat if there's any material document missing. It''s important the the seller realises this isn't just a trivial gripe, it's very much his problem to sort out if he wants to sell the boat to anyone ever.

 

[doris]

The broker tells me this is not an uncommon situation (to my amazement). Other documentation exists (I am told) which would probably convince me of the ownership, however, the absence of any other history or evidence of VAT payment may well be issues when I come to sell the boat on. The builder is no longer in existence and the original dealer is unlikely to have retained records this long (being checked). I don't want to walk away from the deal unnecessarily as the boat fits my requirements well, but have significant concerns. Any advice?

AHoy2

I can't believe you are even considering going ahead. The broker is a liar, the whole thing stinks. Walk away, get your deposit back and if they don't pay for the survey go to the small claims court. Someone in that story is bent.

 

[Ubergeekian]

The absolute essential is to establish that the seller is the beneficial owner. The only clear evidence of this is Bill of Sale from the builder or previous owner to the the current vendor.

Even then you would need proof that the so-called bill of sale was genuine and not a fake. And that the person purported therein to be the seller actually had the right to sell it. And that it was still the property of the person trying to sell it to you. And ...

Paperwork, I'm afraid, proves nothing. Paperwork is easy.

 

[Refueler]

What a crock ....

All boats I've bought have had little or no paper-work. That's a total of 8 boats.

Many boats of early years are without docs ... other than maybe a marina receipt or club for mooring ... cannot remember the year / date that VAT receipt is req'd for a boat ... but none of mine have VAT receipts but they are all pre 90's boats.

It's a strange thing with boats ... that you can own a boat and have no papers or other whatsoever to prove you are owner. You can have docs to indicate you are most likely the owner, but nothing unless a full Bill of Sale issued when you bought ....

If you are reasonably happy that seller is owner ... and you can sort the VAT bit - then why not go for it ... I would.

 

[Heckler]

I am in the process of buying a mid '90s boat, one owner from new, originally supplied by official UK dealer, with the sale being handled by an established broker. Having agreed a price, paid a deposit and arranged for survey I have been informed that the seller is no longer in possession of any recognized documentation in respect of the boat i.e. invoices, ownership, construction documents. The broker tells me this is not an uncommon situation (to my amazement). Other documentation exists (I am told) which would probably convince me of the ownership, however, the absence of any other history or evidence of VAT payment may well be issues when I come to sell the boat on. The builder is no longer in existence and the original dealer is unlikely to have retained records this long (being checked). I don't want to walk away from the deal unnecessarily as the boat fits my requirements well, but have significant concerns. Any advice?

AHoy2

One thought, why didnt the dealer tell you before you had gone down the route of committing yourself?
I could make a good guess as to why!!
Entice you in and then when you have paid for the survey etc then it costs you too much to back out!! I have my thoughts on brokers/dealers!!
If you pay for the lift and survey, you wont get that cost back if he doesnt "find" the docs and you walk away.
Bad buggers if you ask me!!
Think about it and the position when you come to sell, no papers, how much does that knock of the value of the boat?
If you really want it get the dealer to pay for everything and make it quite plain that no papers NO DEAL:!!

 

[BlueChip]

BUT A VAT RECEIPT DOES .. Not a copy either ..

Just thinking out load, how can one be sure that the documents offered are the origionals or only copies or even carefully crafted forgeries?

Peter.[/QUOTE]



The original will be embossed with the company seal

 

[David_Jersey]

If you think the broker has been leading you on which has cost you money (IMO he has)........why not ask the VATman for "advice". Say that xxxx is trying to sell you a boat with no VAT paid, and is saying "not to worry - been doing it for years - VATman never checks"......but you are not sure this is 100% above board


But in one respect broker is right, lots of folks lose their paperwork and therefore plenty of boats around with none. The good news is that many buyers also don't care / don't understand. But some will - therefore any paperless boat has a more restricted market, if nothing else that alone should be reflected in the price.........same as buying from a man in a pub

 

[Refueler]

If anyone tried to reduce price on my boat because of docs - I would show them the door if they were adamant about it.

Thousands of boats out there get sold / bought without proof of ownership docs .... where is this bumf about walk-away etc. coming from ?

OK - most boats of cruising size will have SSR or something - which is indicative of right to sell ... not proof, but in reality what can you show. Even with a car - unless you have bought new / from dealer with official receipts etc. - what shows you as legal owner ? V5 only says you are keeper of the vehicle.

If some what is posted here was applied to boat sales - very few boats would change hands ...

 

[fastjedi]

Insist they find the documents .... or allow another 15% (17.5%) off the purchase price

 

[Pye_End]

Insist they find the documents .... or allow another 15% (17.5%) off the purchase price

If the docs no longer exist then how?

It sounds like only the original owner is liable for VAT if there were ever a query (unless importing it), so why the discount?

Can't really see the problem, so long as there is a reasonable degree of confidence that it is his to sell.

Suspect this is not an uncommon problem.

 

[AHoy2]

Thanks for all the additional posts.

The forum "market view" seems quite clear on what is expected in terms of original documentation and the possible effect of them not being available. Reality also seems to be that many boats do not have complete documentation so there must be a compromise arrangement for each and every case, although I have not yet decided what if any compromise I would accept.

Since my last post I think I have managed to discover and scan every YBW forum thread in existence on documentation/ownership/VAT/selling/buying ....., also contacted the RYA legal advice folk. At least I am better informed when it comes to decision making ;>)

I have given the broker/seller a time frame to provide appropriate documents and any other information to restore confidence in the deal. Fortunately my surveyor is understanding of the situation and agreed to rearrange time/boat as circumstances require. Waiting time now.

AHoy2.

 

[xxyyzz]

You can insure against the VAT risk (you can actually insure against almost any risk), if there is a risk, a solicitor will be able to advise if and how.

Your surveyor will have experience of many boat sales and is probably the best source of advice about questions of missing docs. Assuming you hired him and not the yard of course.

It boils down to how much you trust the seller as do all transactions. When you buy a pasty you don't know, and the seller won't prove, that the meat isn't rat.

 

[ValleyForge]

What value are we talking of here ? if the craft is say £30k + then some docs are probably required, if nothing else to prove some sort of maintenance history which personally I'd be keen to see in that situation. Much less than that then just caveat emptor, thats just old boats. What age does VAT history apply ? I thought it was not relevant beyond a certain age.

 

[Theshipscat]

If it is being sold by a proper broker they should supply you with a bill of sale which makes them legally responsible if the boat turns out to be half inched. That's the whole point of buying through a broker. As for the vat there's millions of boats out there without vat certs. You may be lucky and manage to get proof from the builder/supplier. I bought my first boat through Opal, lots of history which could have proved the bought had always been in the British Isles since construction (in France) but no vat cert as it had been lost. Current boat (built 1986) bought through boatshed so I have a full legal bill of sale but no other history. The ownership is the important thing. Proof of vat is only an issue with HM tax office in the uk as it will be registared in the uk (I assume) Unless it's a worth 100's and 100's of £1000's and obviuosly been sneaked in to avoid vat they ain't interested (yet).

 

[Twister_Ken]

I think xxyyzz has the answer.

If you really want the boat, get a quote for insurance against unpaid VAT and the possibility it is stolen. It should be a one-off premium. Deduct that from the selling price.

 

[Resolution]

Well I do have some sympathy with the seller. I am in a similar position - my car was stolen with all my boat's documentation in a briefcase in the boot. When the car was recovered the briefcase was gone and has never been recovered. I do have photocopies of some of the documents but no originals.

Clear lesson for us all here - assuming that you do have proper documentation for your boat, take a full set of photocopies and keep them safe at home. (Actually I keep the originals at home and a really convincing set of colour copies on the boat.......)

 

[Tranona]

If it is being sold by a proper broker they should supply you with a bill of sale which makes them legally responsible if the boat turns out to be half inched. That's the whole point of buying through a broker. .

Not sure where that idea comes from. Your contract is with the owner/vendor and the Bill of Sale is transferring ownership from him to you. It does not involve the broker who is an agent of the vendor. He has no legal responsibility to the purchaser except in very narrow circumstance.

A reputable broker should of course ensure that all the documents are in order, but if they do not exist he cannot "invent" them.

It would be different if the broker was actually acting as a trader and owned the boat. Then he would have to provide the Bill of Sale. However, you woulkd still need to check he is the beneficial owner by seeing the Bill of Sale covering his purchase of the boat.