Buying from a broker, what's at risk ?

[Tranona]

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.

That is merely an everday statement of "caveat emptor". In other words the vendor is offering no warranty so therefore it is the buyer's responsibility to satisfy himself that he is making an offer he is prepared to complete - subject to the conditions of the contract.

In other words don't enter into the contract unless you want to buy the boat. The conditions are normally only to cover establishing whether the boat is as described, not whether you like it or not - unless you agree with the vendor otherwise.

This whole argument is whether a vendor should be forced to allow you try his boat before you commit to buying it - and the general conclusion is that is not a good idea - forcing a vendor to offer it, not that the trial is a bad idea.

 

[DAKA]

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

Mike and I were talking about Yacht Brokers clients accounts.

Mike was disappointed at the practice of sweeping clients funds from clients account and using the clients money to credit the Yacht Brokers overdraft.

I have been complaining about this for years.
For years you and others have said none sense that doesnt happen.
I patiently wait and sure enough we have proof that it does go on.

The proof that it goes on is with in the case history notes of the BA Peters case.

It is true to say that once it became obvious they were about to be caught they stopped the practice of sweeping clients funds just 3 months before the administrators were called in.

Of course because they stopped it 3 months before the bubble burst then at that time client money wouldnt be missing .
Its clear all but £10 000 had been systematically 'borrowed' prior to that date .

The way you keep pushing and pushing for more dirty on Yacht Brokers is leading me to believe you really hate them !

Dont you realize the more you dig the worse it gets .

There are 4 yacht brokers who were involved in the Osmosis Boat scam, so far I have not named any but I have detailed files , would you like to keep digging until we find out which Yacht Brokers association they are members of ?

 

[Tranona]

Pete

You are very confusing. You do not know whether funds actually moved between the accounts. You do not know whether there was any time when a client was not paid as required.

I doubt you will ever find out exactly what the arrangement was, nor its practical implications. I very much doubt that Barclays would ever place client's funds at risk.

Do you have any examples of cases where banks have transferred funds from client accounts to trading accounts without informing the beneficial owners of the funds?

So, until you have hard evidence that clients have lost out as a consequence of such an arrangement, this issue can only be in the "interesting" category.

 

[DAKA]

Im sure neither of us are finding this very interesting so lets agree to differ until the next troll brings it up next month.

I am pleased to report since our exchanges began there have been significant improvements regarding advice going to Yacht Brokers from the BMF and reported improvements from ABYA (via jonic.) although their website doesnt give much away.

So its not all bad

 

[John100156]

Well chaps, I have read through most of the threads and having recently placed my deposit for my next boat with a contributing broker to this post, I must say that I am now frightened to death!

I had two boats surveyed last year, one at EBY (I will not mention the model of the boat - some of you may remember) and a stock boat owned by Fairline. On both occasions I had placed a deposit, had the boats surveyed, negotiated who should pay for the lifts/fuel and on both occasions, I pulled out after the survey and sea-trial due to excessive defects found by my surveyor. My deposit was returned back to me promptly on both occasions.

I suppose there are many factors that can influence the negotiations, is it a wanted boat, is it a particularly good deal, is the owner being reasonable, is the broker reputable, being honest and many others. We all need to balance them as best we can, but I must say it is a risky and can be a tiresome business, particularly when parting with large sums of money. Surely, as a buyer, if you are covering the cost of sea-trialing and surveying the boat, that should be enough, why is a deposit required at all?

 

[Deleted User YDKXO]

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.

Me too. I've lost the will to live on this thread. I've got certain views on seatrials and client accounts arising from many years of buying and selling boats and nothing on this thread has changed them. I do think though that the brokers who have contributed to this thread should be congratulated for fighting their corner in this bear pit. Well done for sticking their noses above the parapet and do feel free to contribute on other less contentious subjects

 

[jonic]

. Surely, as a buyer, if you are covering the cost of sea-trialing and surveying the boat, that should be enough, why is a deposit required at all?

Two reasons. Just like any transaction where you place a deposit, you are reserving the item. You have a legally enforceable contract in place reserving the boat for you. Because of the nature of used boats you quite rightly want an independent assessment of what you are buying so will be spending a fair amount on a professional survey during an agreed time frame. But during that period the item is reserved exclusively for you and you alone. It is off the market. You cannot be gazumped by a higher offer and have your survey money wasted like you can when buying a house.

From the sellers point of view, he does not know you from Adam. If he is going to take the boat off the market, missing out on potential higher offers, he wants some security and real intent. Not only that if you are going to be lifting his expensive boat up and down and having people crawl all over it he wants security against damage and security against you not paying any lift out or yard bills.

 

[ColdFusion]

I suppose there are many factors that can influence the negotiations... is the broker reputable, being honest...

...but I must say it is a risky and can be a tiresome business, particularly when parting with large sums of money.

The problem is it can very difficult to establish how reputable and honest a broker is before it is too late. That is precisely why brokers need regulating via a legal framework. Guidelines are just that and only that. It is also the reason why Client Accounts should be protected by an insurance policy.

Surely, as a buyer, if you are covering the cost of sea-trialing and surveying the boat, that should be enough, why is a deposit required at all?

Good question.

 

[gjgm]

CFusion:


Umm there is a legal framework- its UK law. What brand new law do you think needs to be created especially for brokers selling boats?
As regards insurance, I assume you mean that the buyer pays a premium to AXA or someone ? Or you want someone else to bear your personal insurance cost?
I think it would be extremely impractical for an insurance company to establish a cost effective policy across brokers without assessing every broker. The broker earns a living out of commission paid by the seller-there is no more money. I really dont see the seller should therefore pay to protect the buyer's deposit.
You could ask a solicitor to handle this for you. You might not like the bill you get. Ah.. dont want to pay for that route either maybe?
So, the reason client accounts are used is that they are easy,practical,cheap and pretty safe. Of course you can make your money more safe- and people do so, but they pay for that security themselves.

 

[ColdFusion]

Brokers are currently unregulated. ABYA provides guidelines (and that's all they are) for those brokers who are members. The brokerage industry should be legally regulated and governed by a body such as ABYA. The ABYA in turn should carry insurance protection for member's Client Accounts. The current situation provides no protection for buyers' monies. Some here argue otherwise but the fact is that if a broker empties a client account and goes bankrupt there is little a buyer can do to get his money back.

 

[ari]

If you are unable to grasp the simple fact that the industry standard contract DOES NOT allow you to reject a boat because you don't like it during the sea trial and the contract you have (the same as the one Jonic uses) are NOT standard, then i really don't know what to say to you.

It's not that complicated.

You are quite wrong again I'm afraid. It was a standard ABYA contract from an ABYA broker.

 

[DAKA]

What brand new law do you think needs to be created especially for brokers selling boats?

1) Regulation to the effect to call yourself a Broker you have to be regulated by ? BMFabya?

2) if a Broker wants to hold clients funds he must join the FSCS (Bank/Insurance brokers compensation scheme)
The frame work is already in place and as others have said the risk is low, fees should be .25% to .85%, however the broker retains the option not to hold clients cash.

I dont see why the ?BMFabya? couldnt operate a clients account for members use.

Regulation is a certainty, its just a question of when.
Good honest brokers will prosper.

 

[ColdFusion]

Good honest brokers will prosper.

Good honest brokers would not object to regulation, I am sure.

 

[jonic]

Good honest brokers would not object to regulation, I am sure.

Absolutely not.

I already abide by the ABYA code, have a client account written in trust with Lloyds TSB, £1 Million per claim Marine Professional Indemnity insurance, £2 Million per claim Marine third party legal liability insurance, Yacht brokers third party liability insurance and I am regulated by the following:

Unfair contract terms act 1997
Misrepresentation Act 1967
Sale of goods act 1979
Contract (Rights of third parties) Act 1999
Money laundering rules of 2007 and 2009
Health and Safety act.
And the FSA regulations if offering Marine Finance.

Perhaps all that should be a legal requirement to be a Yacht Broker. It is a requirement in order to be an ABYA member and all the acts are compulsory anyway.

But as I said, if there was anything else I would sign up.

The fact is most brokers are just like me and 1000's of transactions take place within the framework without a hitch. We must be careful of scaremongering and keep some balance and proportion on these kinds of threads.

 

[ColdFusion]

But, if I may say so, it seems you are at the top end of professionalism. I can't say the same about all the other brokers out there.

 

[PaulGooch]

You are quite wrong again I'm afraid. It was a standard ABYA contract from an ABYA broker.

Yes, the new 2011 contract, which you didn't know about before you made your claims.

It's also clear from posts by another broker on here that not all ABYA members are using the contract. No doubt because it is a guideline, not a requirement.

 

[jonic]

Yes, the new 2011 contract, which you didn't know about before you made your claims.

It's also clear from posts by another broker on here that not all ABYA members are using the contract. No doubt because it is a guideline, not a requirement.

It is in the 2010 as well.

Seriously can someone tell me a real verifiable story of someone being forced to buy a boat against their will after a sea trial or losing their deposit. I have never heard of it ever happening.

 

[ari]

Steady on, don't let the facts get in the way!

 

[gjgm]

Absolutely not.

I already abide by the ABYA code, have a client account written in trust with Lloyds TSB, £1 Million per claim Marine Professional Indemnity insurance, £2 Million per claim Marine third party legal liability insurance, Yacht brokers third party liability insurance

Sorry
can you clarify what that means? For your protection or the client?

 

[Tranona]

Brokers are currently unregulated. ABYA provides guidelines (and that's all they are) for those brokers who are members. The brokerage industry should be legally regulated and governed by a body such as ABYA. The ABYA in turn should carry insurance protection for member's Client Accounts. The current situation provides no protection for buyers' monies. Some here argue otherwise but the fact is that if a broker empties a client account and goes bankrupt there is little a buyer can do to get his money back.

That is just absolute rubbish. You cannot produce one example of a broker "emptying" a client account that would justify an unnecessary and unworkable "compensation" scheme - that is there is nothing and nobody to compensate. The brokerage is governed by the law of the land in respect of misrepresentation, agency and contract and just like any other person fraud and theft - plus they carry professional indenmity insurance. What else is there to cover?

You are just tilting at windmills. Effective legal regulation already exists.