PaulGooch
Well-Known Member
We have drifted a very long way from post #1 and no-one has even answered any of the original questions lol
Buying from a broker, what's at risk ?
- Thread starter PaulGooch
- Start date
Tranona
Well-Known Member
Paul
That is because you are adamant that you are right when many peoiple have tried patiently to explain that it is a MODEL contract that is generally accepted (but clearly not by you) to be fair and workable. It is a reflection of what is considered workable as evidenced by the thousands of transactions that take place using it.
Have you ever thought that maybe it is you that is out of step? After all it is impossible to have any form of system that satisfies everybody. Why don't you just accept that you are the odd one out (or in a tiny minority judging by the lack of support for your position from others) and let everybody else get on with their business.
PaulGooch
Well-Known Member
I'm not stopping you from getting on with your business, you chose to come here
I don't accept that it's me that is out of step, any more than you have ever accepted that anything at all to do with the marine industry could do with improvement.
There are clearly people here that have less than satisfactory dealings with some brokers, although others have better experiences with other brokers.
Guys such as Jonic already provide a contract that doesn't force a buyer to commit to a boat he might not like on a sea trial.
So, why isn't his style of contract the norm, rather that the odd one out ?
No-one has STILL answered questions 1 and 2 in the first post. Funny how the ABYA and BMF websites don't show any contract details.
The manager of my local electrical store can't sell me a £5 warranty with a £19.99 toaster, unless he is trained and licensed to do so. Someone could set up tomorrow as a broker, totally clueless and/or corrupt and advertise someone's £200,000 boat for sale including taking a £20,000 deposit from a buyer. Seems to me like it's time for some regulation and standardisation of contracts to protect buyers from less scrupulous brokers and those that use ambiguous or misleading contracts.
Here's an extract from a contract that someone posted on another forum :
Laughable.
jonic
Well-Known Member
When I did the last ABYA course one of the new delegates asked how often deposits needed to be retained because of a breach of contract. The course tutor could think of just TWO occasions in 20 years. That's right -just two legitimate retentions in 20 years.
So where on earth are all these horror stories of incorrectly lost deposits coming from????????
So where on earth are all these horror stories of incorrectly lost deposits coming from????????
Coaster
Well-Known Member
I find this thread quite instructive. It shows how difficult some individuals can be. There will always be some element of risk when people deal with one another. I reckon that the likelihood of problems arising increases if one party is an awkward, argumentative character.
gjgm
Well-Known Member
But he can sell you the toaster. If you want credit or insurance products, the FSA deems many members of the public need protection, from themselves probably...Try not to confuse the two transactions.
Seems to me that you are perfectly free to make any proposal you like to a private seller, including no obligation sea trails, no deposits, no contracts.
Just go ahead.
Ohh, seems not too many people want to go ahead with you on that basis, but its them thats out of kilter ?
DAKA
Well-Known Member
Barclays bank set up an automatic transfer which swept funds from the clients account which used ALL the clients account funds less £10 000 which was left as a balance, the clients account reduced the £5.5m overdraft.
Full details here
If you paid £250 000 to BP Peters on Monday morning then only £10 000 would be left in the clients account by Friday , the £10 000 could have been joint owned by others who should also have had £000000s in the account.
Towards the end when it became obvious the pack of cards were falling they stopped this practice .
DAKA
Well-Known Member
Exactly that. There does seem to be a small faction who's main purpose in this thread is simply to rubbish brokers (references to "sloth like" etc).
Co-coincidently, my father is in the process of buying a boat at the moment, I'm involved, and we're close to agreeing a deal on one (I hope!).
It is being sold through a broker, we've been to see it, we've made an offer subject to survey and sea trial.
Now (perhaps because of this thread) I actually made a point of saying to the broker when the offer was put in subject to the above that we had never tried one of these boats, although my fathers current boat is a smaller version of a similar type so we have a good idea what to expect. So we need to ensure that if we simply do not like the boat for any reason, be it too noisy, too slow, too uncomfortable, whatever, we just don't like it, that the deposit is refundable without quibble.
Brokers response?
"Absolutely, we wouldn't expect you to commit to complete a purchase when you've not even tried it".
So there it is. This is what happens in the real world for normal sensible genuine buyers.
We'll now put down a deposit based on that and a satisfactory survey, do both, and, all being well, complete.
If all is not well we walk away with deposit returned (less lift out costs etc if it's gone that far, but we'll do the trial first) if not happy with the handling of the boat, or re-negotiate/walk away if the trial or the survey show up issues. It looks a good boat though, so fingers crossed that won't happen.
It really isn't a problem, and certainly not one warranting 18 pages of intense debate and anti broker bile.
Please be careful Ari,
The Brokers duty is to sell a boat on behalf of his client.
He can fib to you and say ' sign here its alright'.
If you do sign here then anything the Broker has said to you is simple caveat emptor. the broker does not owe a duty to advise you on the contract you are signing.
DAKA
Well-Known Member
A 'clients call' account , well done
I can tell you are an honest Broker trying to do the right thing , your total lack of understanding on how easy it is to rip the boat buying public off is a testament to your good nature.
Other high street banks are not so keen to relinquish rights to use/misuse all that cash and will set up overdrawn accounts to run in tandem to the clients account.
At some stage you also mentioned other Solicitors and Financial institutions stealing from clients accounts
The Law society have a compensation scheme that covers solicitors
FSCS covers the Bankers, Insurance Brokers.
Yacht Brokers dont have such a scheme in place, its viewed as a victimless mishap, not even a crime.
D
Deleted User YDKXO
Guest
I give up.
Solicitors can and do steal from their client accounts.
Accountants can and do steal from their client accounts.
Stock brokers do too.
Even banks do.
So don't buy a house or send your accountant any money?
Don't put any money in a bank and don't buy shares?
If you think the broker is going to steal the money do not but a boat either?
If someone were really that concerned I would say get their solicitor to transfer the money....but who's to say he won't steal it?
I am afraid that there is nothing else I can say. I do all I can but the problem being discussed here really is outright Theft/Fraud.
With all due respect, accountants and solicitors have a lot more to lose than yacht brokers because they can be struck off and stopped from practising, should they engage in fraudulent activity. They also have active membership organisations which do investigate cases of fraud and do take action against the member if a case is proven against them. Unless you know different, the ABYA has no such remit. To be blunt, if you fraudulently remove money from your client account for your own benefit, the worst that is going to happen is that the ABYA throw you out. That certainly will not stop you acting as a broker in the future so the deterrent is minimal. Again, with all due respect, there are no qualifications for becoming a yacht broker so any Tom, cowboy Dick and fly by night Harry can set up as a yacht broker and find themselves handling large amounts of money. Even I could set up as a yacht broker tomorrow and start taking customers' money the day after.
I know what you are going to say. Its up to the customer to choose a trustworthy broker but even seemingly trustworthy brokers mishandle client money as the Peters case shows.
Do you get the feeling that Daka and PaulGooch would be perfect in a civil partnership?
They could sit there grumbling about warranties on toasters and being ripped off with every transaction they make as much as they want over tea and crumpets in the evening whilst snuggled under a warm knitted blanket.
Come on guys!
Do you really honestly believe that brokers are simply out to steal your money!
Get a grip!
They want the sale to complete of course, but they also want both parties to be happy, because the vendore may well buy another boat and the purchaser may well decide to sell this one at some point down the line.
Repeat business is a really big part of "our" business.
The system in place may not be perfect, but it is tried and tested thousands of times to suit the vast majority of sales and nearly all clients. However, I think it is abundantly clear that ALL the brokers who have responded on here will do everything they can to be flexible in the right circumstances.
Try and force an exact statement or answer as PG has done and it won't come as every circumstance is different, but rest assured that the broker will bend over backwards to try and give a happy conclusion.
They could sit there grumbling about warranties on toasters and being ripped off with every transaction they make as much as they want over tea and crumpets in the evening whilst snuggled under a warm knitted blanket.
Come on guys!
Do you really honestly believe that brokers are simply out to steal your money!
Get a grip!
They want the sale to complete of course, but they also want both parties to be happy, because the vendore may well buy another boat and the purchaser may well decide to sell this one at some point down the line.
Repeat business is a really big part of "our" business.
The system in place may not be perfect, but it is tried and tested thousands of times to suit the vast majority of sales and nearly all clients. However, I think it is abundantly clear that ALL the brokers who have responded on here will do everything they can to be flexible in the right circumstances.
Try and force an exact statement or answer as PG has done and it won't come as every circumstance is different, but rest assured that the broker will bend over backwards to try and give a happy conclusion.
jonic
Well-Known Member
He CAN NOT fib.
Brokers are bound by the Misrepresentation Act of 1967 and the Unfair Contract Terms Act of 1997.
and from the ABYA guidance notes
(ii) Brokers
The Broker is responsible for providing accurate information to the best of his ability, and defects or deficiencies in a boat of which the Broker is aware should be divulged to Purchasers and the Vendor. (See Paragraph 2 (iii) of section 3)
(iii) The Lead Broker must act at all times with due regard to his statutory and professional obligations to advise Sharing Brokers of known or reported defects or deficiencies in a Shared Boat.
The actual owner also signs the following:
1.1 The Owner hereby instructs the Broker to act as Sole Agent for the sale of the above vessel, and declares that to the best of his knowledge and belief the attached particulars or those otherwise signed or supplied by the Owner are correct and that he has power to dispose of the vessel with the agreement of any joint Owner(s) or Mortgagee or Hire Purchase Company and that all known defects have been declared. He also agrees to indemnify the Brokers if any of the information given proves to be incorrect in the event of any claim being proven by a Purchaser (including the cost of defending any such claim or resisting any such liability as may arise) or from any third party should any of the information provided by or on behalf of the Owner and subject to these declarations prove to be incorrect or misleading.
Caveat Emptor applies because you are buying used goods out of manufactures warranty from a private individual. Hence the provision in the contract for you to have an INDEPENDENT survey and be able to withdraw or re-negotiate the price.
PaulGooch
Well-Known Member
I haven't confused the two, i was referring to the fact he can't sell me a £5 extended warranty, but he can sell me a multi million pound yacht AND take a 10% deposit from me.
"not too many people" = some people, therefore i am not the only one that thinks that paying 10% of the price of a boat (maybe 10's of thousands) and being unable to reject it because we don't like it, is unfair.
DAKA
Well-Known Member
This is what happened to me.
Including some respected Brokers and dealers from North to south.
It should be noted that names have been changed and are not intended to reflect any current companies or individuals. Many of you will already know parts of this , apologies to any honourable Brokers reading this who feel tainted but I feel goaded into posting the full truth, it will perhaps go some way to explaining why I have such a mistrust towards Marine Brokers and will also go some way to explaining my apparent confusion between Broker/dealer .
Mr W puts his boat for sale through a South coast Broker, E any Yacht Brokers.
E any Yacht Brokers phone Mr W to advise him that his 4 year old boat has osmosis and repairs are going to cost £6000 but the good news is E any Yacht Brokers have found a buyer who wants to meet him to show him a part exchange boat which E any Yacht Broker values @ £XX XXX.
Mr D turns up to buy the boat with his friend Mr H, the deal is done and Mr W gets next to nothing in cash but gets a £XX XXX cruiser in part exchange which transpires to be worth less than 60% of E any Yacht Brokers valuation.
Mr D is actually a friend of E any Yacht Brokers, Mr H is also known to E any Yacht Brokers as he is not just a friend of Mr D but is actually his Business partner, D & H T/A DH any Marine .
DH any Marine don't spend £6000 on repairs , in fact the boat isn't even given a lick of antifoul.
DH any Marine sell the boat through S any Yacht Brokers, the Broker states that “the boat is in very good condition” and confirms when asked that “the boat does not have osmosis, the boat is only 4-5 years old and does not need a survey as it is still under warranty.”
Mr P buys the boat on the advice of the Broker, 2 days later Mr W returns from holiday to find messages left by Mr P and gets in touch to advise about the Osmosis and the part exchange deal done with Mr D , he is amazed to learn Mr D and Mr H are in partnership together as DH any Marine
A lift out and dry survey is arranged by C (Blakes Osmosis centre.)
The hull is completely covered with blisters the size of 10p's, in a 1 square foot area there will be 4-5 blisters all the size of a 10p, the whole hull is affected.
The Broker who sold the boat to Mr W is contacted who say the manufacturers confirm the boat is still in warranty but this isn't covered as the boats performance is not significantly affected by it.
Mr D has an interest in S any Yacht Brokers and possibly by Mr H and possibly DH any Marine, it was a little difficult to establish the full connections.
E any yacht Brokers are contacted by Mr P, it is very clear that Mr D and Mr H along with their company are well known by E any Yacht Brokers who said he was trying to help them out as a favour and are livid with Mr D for not repairing the boat as agreed before selling it on.
Mr D tries to deny everything .
Mr P takes legal advice and is not allowed to use his new boat.
Costs start to mount, Barristers are charging over £200 an hour.
Mr D offers to repair the boat ( basically a sand down and coppercoat)
Mr D eventually agrees to send a compensation cheque to Mr P
Mr P wins but somewhat an Pyrrhic victory
Alright Mr P ended up with a great deal but had to endure months of hassle,
All the legal remedies you are led to understand exist really aren't any real help at all unless you are stubborn, have spare capital that you are willing to gamble, have several hours a day spare time and are fit enough with huge energy to see it through to the end, it feels more like a gladiator dual than a legal redress, you have to sink right down to their level, that's an embarrassing and a shameful place for honourable men to find themselves in.
From the Brokers point of view they must have thought it was like taking dummies from babies, easy pickings except one 'mark' didn't want to bend over.
You must speak to the previous owners before buying a boat.
If the Broker doesn't want to give you the details then you ask for the service history looking for their details.
If you cant get to speak to the previous owner then walk away, its just not worth the risk.
The boat was sold several years later privately , it was made clear the boat had Osmosis and a written statement offered that if the new owner decided further treatment was required then 50% of the cost would be paid.
__________________
PaulGooch
Well-Known Member
That is plainly untrue.
Jonic has posted a contract that does everything myself and others, unhappy with the prospect of paying a deposit and not being able to reject the boat because we don't like it, have asked for as a standard contract. It also does nothing to offend or cause out of pocket expense to the boat owner, so everyone would be happy dealing with him.
Why this contract could not be used as standard therefore escapes me.
D
Deleted User YDKXO
Guest
Bloody hell, I didn't realise that. In other words the client account was just a sham. Thats outrageous. I thought it was a case of maladministration. I cannot believe that somebody high up at Peters would not have known what was going on because that is fraud. Effectively, that is using client account money to prop up the shareholders' interest in the company. As I said, did any directors at Peters get prosecuted for that? No.
It just demonstrates that broker client accounts, as they are currently used, are not worth the paper they're written on
DAKA
Well-Known Member
Thanks Mike, its taken me 3 years, 873 posts over 3 forums , the collapse of a previously respected Broker, 4 year court case and you summarise in a one liner
The problem though in my opinion is with the high street banks.
the local bank managers push their clients into setting up these automatic transfers.
Businessmen are experts in their fields and rely on the bank manger for financial advice, they are so busy running their own business they just go along with the recommendations of the Bank manager.
I blame Barclays for the BA Peters clients account sham, the BA Peters management tried to protect some clients funds in the clients account but the judge ruled against it.
As you are aware interest is so low no one really wants cash at the moment except the Bank Manager........
Bank Manager loans to a poorly business, risks loosing the Bank £1m so props the business up.
Gets into deeper water and needs to loan beyond his authority, he loans beyond his authority but has to get passed a weekly audit, the only way he can do it is to use the clients account to balance the books.
So he pops down to see his failing company director and says, hey you are paying all these charges on £5.5 m overdraft, how about we set up an automatic transfer from your clients account and use that to reduce your charges.
Must be alright as the Bank manager has recommended it !
There is no guarantee that the next case will not be far worse not better.
And as you say no one has been convicted of 'borrowing' from the clients.
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jonic
Well-Known Member
This is what I have been trying to say about client accounts. The BA Peters one wasn't one. Not if the overdraft could be set off by it. I also think Barclays may shoulder some of the blame here, but someone in the Peters organisation must have known it was going on.
My client account specifically says it is held in trust with the bank as trustee and cannot be combined with any other account nor can any right of set off be exercised.
If the account is operated properly it is worth the paper it is written on, in respect of the fact if the broker becomes insolvent the money is outside the assets of the company and cannot be seized by creditors nor used by the bank to pay overdafts etc.
If using a broker the best you can do at the moment is use an ABYA or similarly accredited broker. This weeds out the "anyone can set up as a broker tomorrow gang". and separates out anyone who has been struck off the organisations.
Then ask to see their PI insurance certificate so you know they are insured.
Then ask to see the letter of trust from the bank so you know they have a legally separated client account.
Ensure that any sale and purchase contract stipulates that the funds will be deposited in the client account.
That is 4 steps to minimising risk.
If the broker is a crook and misuses the account or behaves in any other fraudulent manner that is a different matter. It is because they are a crook, not because of the system.
I know about this as my Mother and sister both lost their jobs at the law firm they worked for when the senior partner stole the client money. He was struck off by the law society and jailed for fraud. He has subsequently been jailed on two more occasions. The perception is that the regulation of solicitors protects against this. It doesn't if the person concerned is a crook.
The difference with law firms is there is a compensation scheme. That is because the size of the law industry is able to support it. I agree with the posters who would like to see a compensation scheme for yacht broking, but I doubt it will ever be viable or workable.
The system is not perfect but it is not as imperfect as the casual reader here
would assume from reading these posts, with brokers using it as way to wilfully defraud people.
As brokers the boating world is so small we rely utterly on our reputations.
I know of no-one who ever lost money in a client account in a used boat brokering situation through a professionally accredited broker.
Historical problems were often to do with new builds and the boat builders themselves going bust during the lengthy build process. That has been addressed to a degree by many builders having provision in the contracts for the customer to own the hull as stage payments are made.
From my stand point no member of the boat buying public should lose money when paid in good faith and I would support any measures introduced to minimise that risk.
Daka I utterly deplore what happened to you.
My client account specifically says it is held in trust with the bank as trustee and cannot be combined with any other account nor can any right of set off be exercised.
If the account is operated properly it is worth the paper it is written on, in respect of the fact if the broker becomes insolvent the money is outside the assets of the company and cannot be seized by creditors nor used by the bank to pay overdafts etc.
If using a broker the best you can do at the moment is use an ABYA or similarly accredited broker. This weeds out the "anyone can set up as a broker tomorrow gang". and separates out anyone who has been struck off the organisations.
Then ask to see their PI insurance certificate so you know they are insured.
Then ask to see the letter of trust from the bank so you know they have a legally separated client account.
Ensure that any sale and purchase contract stipulates that the funds will be deposited in the client account.
That is 4 steps to minimising risk.
If the broker is a crook and misuses the account or behaves in any other fraudulent manner that is a different matter. It is because they are a crook, not because of the system.
I know about this as my Mother and sister both lost their jobs at the law firm they worked for when the senior partner stole the client money. He was struck off by the law society and jailed for fraud. He has subsequently been jailed on two more occasions. The perception is that the regulation of solicitors protects against this. It doesn't if the person concerned is a crook.
The difference with law firms is there is a compensation scheme. That is because the size of the law industry is able to support it. I agree with the posters who would like to see a compensation scheme for yacht broking, but I doubt it will ever be viable or workable.
The system is not perfect but it is not as imperfect as the casual reader here
would assume from reading these posts, with brokers using it as way to wilfully defraud people.
As brokers the boating world is so small we rely utterly on our reputations.
I know of no-one who ever lost money in a client account in a used boat brokering situation through a professionally accredited broker.
Historical problems were often to do with new builds and the boat builders themselves going bust during the lengthy build process. That has been addressed to a degree by many builders having provision in the contracts for the customer to own the hull as stage payments are made.
From my stand point no member of the boat buying public should lose money when paid in good faith and I would support any measures introduced to minimise that risk.
Daka I utterly deplore what happened to you.
ColdFusion
Well-Known Member
Seconded.
gjgm
Well-Known Member
Fair enough, right hand corner 10,000.. left hand corner 2.
To me, the fundamental point is that the boat belongs to the seller, and he retains all rights as to how he wishes to sell his own boat.
You can of course discuss his terms with him, but your not liking them has no standing.
You could of course pay someone 6pct to find you a boat, and write your own contract.. maybe thats an idea?
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