Buying from a broker, what's at risk ?

[DAKA]

"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.

3

but you guys are missing the point again.
Currently the Broker is working for the seller and not you.
He is not some sort of umpire to make a fair deal for both of you, his only interest is making a good deal for the seller and himself.
You are nothing more than his mark , he has to make you feel like his best mate but thats it, buyer beware. The idea of letting you try a boat that has been sat rotting for 18 months during which time the Broker hasnt even adjusted the fenders before he has you hooked is ridiculous.

Find a boat for sale privately and enjoy the experience.

 

[jonic]

3

but you guys are missing the point again.
Currently the Broker is working for the seller and not you.
He is not some sort of umpire to make a fair deal for both of you, his only interest is making a good deal for the seller and himself.
You are nothing more than his mark , he has to make you feel like his best mate but thats it, buyer beware. The idea of letting you try a boat that has been sat rotting for 18 months during which time the Broker hasnt even adjusted the fenders before he has you hooked is ridiculous.

Find a boat for sale privately and enjoy the experience.

Total tosh in respect to how I work. Yes, engaged by the seller but without happy buyers I have nothing. The job is to BROKER a deal. Once it gets to survey stage we very much become umpires.

Thats like me saying never buy a boat privately because no-one has checked the title documents, or the VAT or the RCD and they have probably falsified the VAT invoice and they probably have a mortgage which you will now inherit and they probably have a false address and they see you as nothing more than a way of offloading a boat that they know has hidden engine problems and you are just his mark. The idea of paying hundreds of thousands to someone you have never met before without an intermediary is ridiculous.

Daft isn't it.

 

[DAKA]

Total tosh in respect to how I work. Yes, engaged by the seller but without happy buyers I have nothing. The job is to BROKER a deal. Once it gets to survey stage we very much become umpires.

Thats like me saying never buy a boat privately because no-one has checked the title documents, or the VAT or the RCD and they have probably falsified the VAT invoice and they probably have a mortgage which you will now inherit and they probably have a false address and they see you as nothing more than a way of offloading a boat that they know has hidden engine problems and you are just his mark. The idea of paying hundreds of thousands to someone you have never met before without an intermediary is ridiculous.

Daft isn't it.

Sorry Jonic, I probably went a bit over the top .
Posting the above details on my past dealings with Brokers just brought a lot of anger back.
Not all Brokers are conscientious like you.

 

[PaulGooch]

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?

I think amongst the "debating" of various other issues, such as BA peters and client accounts, some of the simplicity of the "argument" has been lost.

In essence, all that's being suggested is that a contract such as the one Jonic uses be the standard contract. One where a buyer cannot be compelled to part with 10% of the boat value, just to find out he doesn't like the boat.

It's equally accepted that the boat owner shouldn't be out of pocket as a result (a luxury not afforded in other sales areas), by stating the buyer should pay out of pocket expenses.

I also fully accept that a buyer could choose not to allow such a contract, but why would he ? Easily dealt with in a private sale, you just say yes or no. In a brokerage sale, the broker can choose to say no, without notifying the seller, or he can write unfair contracts and cause problems, or lose sales.

In short, i cannot see why Jonic's contract should be unacceptable to any serious seller or serious buyer and why such a contract is not an industry standard.

 

[jonic]

Sorry Jonic, I probably went a bit over the top .
Posting the above details on my past dealings with Brokers just brought a lot of anger back.
Not all Brokers are conscientious like you.

That is extremely kind, and thank you.

Trust me I understand your anger.

I have been re-reading your post and have a question or two.

Did MR P not get a survey before buying?

Did MR P sue broker D under the sale of goods act, as he effectively was now selling in the course of business?

Did you receive any compensation for the Part ex and did your surveyor agree the value with broker E?

 

[PaulGooch]

Total tosh in respect to how I work. Yes, engaged by the seller but without happy buyers I have nothing. The job is to BROKER a deal. Once it gets to survey stage we very much become umpires.

Thats like me saying never buy a boat privately because no-one has checked the title documents, or the VAT or the RCD and they have probably falsified the VAT invoice and they probably have a mortgage which you will now inherit and they probably have a false address and they see you as nothing more than a way of offloading a boat that they know has hidden engine problems and you are just his mark. The idea of paying hundreds of thousands to someone you have never met before without an intermediary is ridiculous.

Daft isn't it.

Personally, with regards to sea trials, i'd be perfectly happy to give you my 10%. Perfectly happy. I'd also be perfectly happy for you to keep the costs of the trial if the sale didn't proceed (Unlikely i'm sure, but it would be reassuring to know i could).

I wouldn't be happy to pay a deposit where i could only withdraw if a) there were defects or b) the broker was feeling generous and gave it back. In this case i'd walk away.

With your very clear and honest approach, coupled with your crystal clear and very fair contract, i wish you lots of success. Perhaps it is brokers such as you that will set the new standard.

 

[3571]

3

but you guys are missing the point again.
Currently the Broker is working for the seller and not you.
He is not some sort of umpire to make a fair deal for both of you, his only interest is making a good deal for the seller and himself.
You are nothing more than his mark , he has to make you feel like his best mate but thats it, buyer beware. The idea of letting you try a boat that has been sat rotting for 18 months during which time the Broker hasnt even adjusted the fenders before he has you hooked is ridiculous.

Find a boat for sale privately and enjoy the experience.

Without a reasonably happy buyer there will be no sale = not a happy broker or a happy seller.

It very much takes 2 (or 3) to tango in the boat sales arena imho.

 

[jonic]

.

In short, i cannot see why Jonic's contract should be unacceptable to any serious seller or serious buyer and why such a contract is not an industry standard.

It is taken from the 2011 edition ABYA conditional sale and purchase contract.

I would advise anyone buying using that contract to sit down with the broker and both discuss on what grounds the sea-trial is taking place. That you wish to be clear that your deposit, less any expenses, be returned if you reject the boat for any reason. If necessary have the words for any reason inserted.

A good broker should have no problem with that if he feels you are a genuine and committed buyer.

 

[jonic]

Personally, with regards to sea trials, i'd be perfectly happy to give you my 10%. Perfectly happy. I'd also be perfectly happy for you to keep the costs of the trial if the sale didn't proceed (Unlikely i'm sure, but it would be reassuring to know i could).

I wouldn't be happy to pay a deposit where i could only withdraw if a) there were defects or b) the broker was feeling generous and gave it back. In this case i'd walk away.

With your very clear and honest approach, coupled with your crystal clear and very fair contract, i wish you lots of success. Perhaps it is brokers such as you that will set the new standard.

Thank you. My whole approach is based on being clear and honest and I do hope to set that standard.

 

[DAKA]

That is extremely kind, and thank you.

Trust me I understand your anger.

I have been re-reading your post and have a question or two.

Did MR P not get a survey before buying?

Mr P was advised by the Broker that the boat did not need a survey as the boat was only ?3-4? years old and still covered under warranty.

Did MR P sue broker D under the sale of goods act, as he effectively was now selling in the course of business?
Mr P was young (20) at the time and went a bit OTT he went for DH anybroker, S anyyacht Brokers , Mr D, Mr H and helped Mrs D divorce Mr D

Did you receive any compensation for the Part ex and did your surveyor agree the value with broker E?
Mr W was left out in the cold, E any Yachts got away with it along with the previous Broker who had also sold this boat, the Boat was passed around between 4 Brokers who used it to scam money from first time buyers, because mr W didnt pursuit a court case I can not post the names of the Brokers/dealers.

my reply

 

[PaulGooch]

It is taken from the 2011 edition ABYA conditional sale and purchase contract.

I would advise anyone buying using that contract to sit down with the broker and both discuss on what grounds the sea-trial is taking place. That you wish to be clear that your deposit, less any expenses, be returned if you reject the boat for any reason. If necessary have the words for any reason inserted.

A good broker should have no problem with that if he feels you are a genuine and committed buyer.

Well, that's point one of the opening post sorted then

Think i'll have a lie down before i seek further clarification on the other points

 

[jonic]

my reply

Ok, Thanks.

So both boats were not surveyed, because the brokers advised not to?

A broker should always advise on a having a survey, It's the only real independent knowledge the buyer has regarding condition and value.

If brokers start advising not to have a survey be very suspicious.

If they owned these boats as a business then they would also be bound by this:

3.3 The Member who sells boats as Part Exchange shall be aware of his responsibilities and shall ensure that he has good title to pass to the purchaser. As a commercial vendor he is bound by the terms of the Sale of Goods Acts including, inter alia, that the goods shall be fit for the purpose. In the case of a defect being found, the burden of proof for the 6 months after the sale is on the seller to prove the defect was absent at the time of the sale; thereafter it is for the purchaser to prove that it was.

 

[jonic]

Well, that's point one of the opening post sorted then

Think i'll have a lie down before i seek further clarification on the other points

I think I'll have a lie down too. I only popped in from the rag and stick forum.

It has made me wonder, as I only sell sailing yachts, that motor boat sellers perhaps do things a different way?

 

[Tranona]

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

As usual, DAKA is being highly selective with his quotations to suit his view of the world.

There is no suggestion in the case that an earlier arrangement with the bank to offset the credit balance in the client account against the overdraft on the general account that any funds moved frrom the account, nor that the account ever had insufficient funds to meet the claims on it. Indeed exactly the opposite is the case as the judgement stated

"The judge found that in most of the brokerage sales and in some of the direct sales money was paid into the client account. He also found that the administrators had established that the credit balance in the client account at all material times exceeded the amounts held in respect of brokerage sale and direct sales customers. Accordingly, he held that the relevant amounts were held in trust on behalf of the relevant direct sales customers and as stakeholders in the brokerage sales"

In other words the account was handled correctly and claimants received their funds. The previous arrangement in respect of the overdraft, whatever potential effect it might have had was irrelevant and had no effect on the administration.

The issue in the case was about establishing the strength of various different claims on the funds in the client account. You need to read the whole case to appreciate what went on. You will then also understand the reasoning behind the revised guidance on the structure and operation of client accounts as described by Ionic.

BTW this does not mean there were not failings at Peters which needed addressing, but it is interesting that there does not seem to have been any further legal action in relation to the deposits that were not in the client account. (You need to read the court report to understand the somplexities of the issue).

 

[DAKA]

Ok, Thanks.

So both boats were not surveyed, because the brokers advised not to?

This didnt go to court, this came from Mr W direct to me.....

Mr W sold the boat through E anyyacht Broker, E anyyacht broker arranged for Mr W to be present as the deal was done.
At the deal Mr D was purporting to be a surveyor and Mr H (could have been other way round, not got the file here) a private buyer with a boat to part exchange that E anyyacht broker over valued.
The 'surveyor' pointed the osmosis out to Mr w, E anyyacht brokers knew the 'surveyor' and private buyer were in fact Brokers in partnership.

 

[DAKA]

"The judge found that in most of the brokerage sales and in some of the direct sales money was paid into the client account. He also found that the administrators had established that the credit balance in the client account at all material times exceeded the amounts held in respect of brokerage sale and direct sales customers.

That is a deliberately misleading statement.
You know that at the time of the failing the practice of sweeping the clients funds had stopped.

 

[Tranona]

Well, that's point one of the opening post sorted then

Think i'll have a lie down before i seek further clarification on the other points

Every single one of your points has been answered - just that you refuse to accept the answers provided.

Just to make it absolutely clear.

A buyer has no "rights" until he enters into a contract with the vendor

The contract has specific conditions desigend to facilitate the transaction while protecting the interests of both parties.

The contract normally used is a MODEL (not standard, which has a different meaning) but can be changed by agreement of both parties who are then bound by it.

The MODEL used is one that has been shown to be effective. It is not the Brokers contract but the vendors.

A buyer cannot dictate what goes into the contract. He can negotiate terms and conditions, but the vendor can refuse them as he is under no obligation to accept anything he does not like.

In reality your unfounded fear that you will be forced to buy a boat you don't want is unlikely to happen, nor that you will lose your deposit. The law places the responsibility on you to satisfy yourself that you are prepared to buy the boat before you enter into the contract. If you cannot negotiate acceptable terms and conditions then walk away. At that point the vendor has no obligation to you nor you to him.

Just because you seem to want more freedom to do what you what to do, does not make the vendor (or his agent) wrong in insisting on their terms and conditions even if they know you will walk away - maybe that is their objective anyway!

Just pleased you are never likely to want to buy a boat from me, but knowing that I am always at liberty to refuse to deal with you is an extra comfort.

 

[PaulGooch]

The thread seems to have lost it's purpose now.

A similar thread on WSF has now degenerated to veiled threats and personal insults from Nautibusiness so i'l make this my last post.

Many thanks to all who have contributed. In particular, thanks to Jonic for sharing the contract details, those are just what some of us were asking for. Why, as an ABYA registered broker, Nautibusiness doesn't use the same contract and has argued against it, i can't say.

 

[Morpheous]

Apparently not sorted, we are clearly going round in circles. I lost interest in this thread about 10 pages ago but do want to pick up on this statment
<Quote:>

The law places the responsibility on you to satisfy yourself that you are prepared to buy the boat before you enter into the contract

</Quote>

The boat buying process or model does not allow you to fully satisfy yourself before entering into contract - in the views of many here. The contract makes provision for for some of the issues that can arise, such as material defects should they be found, but whether you are fully satisfied in all areas. Now having been through this I shall have a better idea of what to negotiate on before entering in to the next contract.

 

[Tranona]

That is a deliberately misleading statement.
You know that at the time of the failing the practice of sweeping the clients funds had stopped.

How can it be misleading when it a direct quotation from the judge's summing up?

I have already said that the practice had stopped, so it is completely irrelevant. I do not know why the issue about the overdraft arrangement was included in the report as it had no influence on either the funds available to meet claims in the client account, nor does it seem to be a contributory factor to the failure of the business.

As I have said before, I think you are misreading the importance of the statement because it does not say what you like to think it says. You and I cannot resolve whether it is relevant based on the bare words in the court report. You need to take specialist legal and banking advice, perhaps from Barclays and KPMG. I am perfectly happy to accept your interpretation if it is confirmed by an appropriate authority. However, based on my somewhat limited knowledge of the finer details your interpretation does seem highly improbable. After all it does fly in the face of the general principles of client/trust accounts.