From disspointing to infuriating and beyond

[Whitelighter]

So for those of you who weren't in the know/guessed/worked it out I was (trying) to buy a 2000 Azimut 42. All looked good on paper and after an initial visit so a deposit was duely paid after the contract was received. The contract was very clear on what happens after rejection. Basically I should have the deposit returned.

Broker is now arguing my reason for rejection isn't a problem (not that it needs to be) and says he has passed the deposit to the buyer so cant return it even if he wants to.

Now its not a life altering amount of money but Id rather it was in my account than his.

I know these are the risks but even I thought Italy wasn't quite such a cowboy state regarding contract law. ho hum.

 

[jimmy_the_builder]

What was your reason for rejection?

 

[Whitelighter]

Saturated hull core above the waterline
Moisture readings were super high through about 3/4 of the length either side from WL to deck joint

 

[jimmy_the_builder]

Is there no way of resolving the fault so that the purchase can proceed?

Ah - I see you've added more detail. Fair enough.

 

[mparrish]

Bummer !! Worth chasing the money though - that's the purpose of the contract that you and THEY signed !!

Mines still on a go slow, although we now seem to have all the necessary bits of paper - maybe next week we'll complete.

 

[jimmy_the_builder]

Bummer !! Worth chasing the money though - that's the purpose of the contract that you and THEY signed !!

Mines still on a go slow, although we now seem to have all the necessary bits of paper - maybe next week we'll complete.

Wondered how you were getting on. Glad to hear you're nearly there.

 

[alt]

Thought that'd be plenty reason to reject a boat. So are you saying the guy just has a couple of £k in his pocket, for nothing? Name and shame!

This is why I like buying boats in Ireland... when I was interested in my (current) boat, the owner left the keys for me, told me to do whatever I wanted and let me know if I wanted it.... I bought it without ever meeting him, or even involving a broker.

Sometimes formalities can be a burden.

 

[jfm]

What an unfortunate state of affairs Jez. I'm very sorry to hear this.

What to do depends on what the contract said, about which I know nothing. My standard procedure if the money really is due to me under the contract is just to demand, then issue proceedings. Less easy if the contract is enforceable only in IT of course, but if you're going to win then your recovery of the money (and costs, so far as they are awardable) might outweigh your costs

I've only been in this position once before, when buying a berth for half a bar and the seller/broker demanding 10% deposit, under a French law contract. I didn't like the terms of the deposit so declined to agree the contract. I showed them my flight tickets and bank statement and said I'd be there on completion date to hand over 100% of the money, if they wanted to sell. They huffed and puffed ("my client is travelling 100km don't you know - what if you don't turn up?" -said the broker). But they conceded. I and they turned up on the day with no deposit ever being paid and I bought the thing. I know I'm sounding clever with hindsight, but in buyer's market that is sensible in my view. I just hate taking performance/credit risk against unknown counterparties because the chances of losing are too high

Could comment more if I knew what the contract said. I know stacks of top draw IT lawyers in Milan and Turin.

 

[benjenbav]

What an unfortunate state of affairs Jez. I'm very sorry to hear this.

What to do depends on what the contract said, about which I know nothing. My standard procedure if the money really is due to me under the contract is just to demand, then issue proceedings. Less easy if the contract is enforceable only in IT of course, but if you're going to win then your recovery of the money (and costs, so far as they are awardable) might outweigh your costs

I've only been in this position once before, when buying a berth for half a bar and the seller/broker demanding 10% deposit, under a French law contract. I didn't like the terms of the deposit so declined to agree the contract. I showed them my flight tickets and bank statement and said I'd be there on completion date to hand over 100% of the money, if they wanted to sell. They huffed and puffed ("my client is travelling 100km don't you know - what if you don't turn up?" -said the broker). But they conceded. I and they turned up on the day with no deposit ever being paid and I bought the thing. I know I'm sounding clever with hindsight, but in buyer's market that is sensible in my view. I just hate taking performance/credit risk against unknown counterparties because the chances of losing are too high

Could comment more if I knew what the contract said. I know stacks of top draw IT lawyers in Milan and Turin.

Just on a practical point, IF (and this is a big if) the contract is on similar terms to the BMF/RYA standard UK used boat thing then it will specify that (a) it is between the seller and the buyer (not the broker) and (b) that the deposit is payable to the seller with no mention of the broker and (c) there is a right of rejection and have the deposit repaid.

If so, the broker is unlikely to be in the wrong to have passed on the deposit to the seller.

However, that's not to say that the broker can't be a bit more useful than to date in getting back the money. I would suggest that before embarking on proceedings (against the seller) it is worth explaining to the broker that that is precisely what is going to happen and, if he doesn't persuade his client to unburden himself of the deposit money then he can kiss goodbye to a commission on this boat for a while for the simple reason that no-one is going to treat with a seller with a CCJ (Italian equivalent) creating a bad smell.

 

[Whitelighter]

Here is the contract

View attachment 52203

View attachment 52204

View attachment 52205

 

[jfm]

Just on a practical point, IF (and this is a big if) the contract is on similar terms to the BMF/RYA standard UK used boat thing then it will specify that (a) it is between the seller and the buyer (not the broker) and (b) that the deposit is payable to the seller with no mention of the broker and ...

BJB, hesitating to differ with you on such a matter but afaik that isn't correct. AFAIK, broker functions as stakeholder in relation to the deposit, not as agent of seller, in the "standard" UK contract. He therefore holds the deposit on trust and cannot give it to seller until the buyer's potential claim has been extinguished. That's how every UK boat contract that I've touched has been written, at least. It is a world away from what you describe and results in brokers being very careful indeed about handing over deposits to either party in the event of a survey dispute

Of course, creating trust obligations under IT law is going to be quite different

 

[andy59]

Paragraph 16 says the deposit remains with the broker ??

 

[Whitelighter]

Just on a practical point, IF (and this is a big if) the contract is on similar terms to the BMF/RYA standard UK used boat thing then it will specify that (a) it is between the seller and the buyer (not the broker) and (b) that the deposit is payable to the seller with no mention of the broker and (c) there is a right of rejection and have the deposit repaid.

If so, the broker is unlikely to be in the wrong to have passed on the deposit to the seller.

However, that's not to say that the broker can't be a bit more useful than to date in getting back the money. I would suggest that before embarking on proceedings (against the seller) it is worth explaining to the broker that that is precisely what is going to happen and, if he doesn't persuade his client to unburden himself of the deposit money then he can kiss goodbye to a commission on this boat for a while for the simple reason that no-one is going to treat with a seller with a CCJ (Italian equivalent) creating a bad smell.

Not in anyway as you describe (see above)

In fact contract specifically states the deposit shall be held by the broker.
Contract also specifically states that after a seatrial and/or inspection if the buyer rejects the boat in writing then the deposit is returned.

Contract wise they are 100% in the wrong. Practically speaking I don't know if its feasible to go any further than demanding repayment of the deposit (which I have already done via my lawyer). Their response was that to have high moisture readings in the cored hull is normal and its not a problem. They continued by saying if I don't pay for the boat by the 26th of June (completion date on the contract) they will sue me for costs and losses even though I haven't accepted the boat.

All good fun.

 

[Whitelighter]

Paragraph 16 says the deposit remains with the broker ??

Yep. Though 13 also details what happens in the event of rejection by the buyer. Not sticking to that either.

 

[mparrish]

Jez
Contract similar to mine, but missing a load of detail relating to default conditions. Hopefully at this stage I won't need to be calling on mine. While yours looks similar to the ISYBA which mine is done under, as I say there is a load missing. At least your deposit was only 5% and not the more common 10%. Anyway good luck with recovering it. Will give you a call next week with an update on my Italian dealings .

 

[jfm]

Hmm, you are on sticky wicket here Jez. The EN part of the contract reads as a bad translation of the IT (and MM could comment much better than me). OIt is full of assive verbs saying 2this will happen2 without imposing rights and obligations on anyone to do the relevant thing or demand it be done. It would get 1/10 at law school. Nevertheless:

1. Despite clause 16, broker doesn't seem to undertake any obligations to you as regards the deposit. Sure he may have breached clause 16 (though I doubt it, following rejection of the boat) but anyway you have suffered no loss as a result of that
2. the critical clause is 13, which gives you rejection right. It doesn't specify the seriousness of the defect that would allow a rejection, and that's a major flaw. Also it seems to require proof of failure by you -I'm guessing the "proven to fail" language is a bad translation because the EN sentence is garbage, and it would be good to hear from MM what the IT words say. But in any case the thing is silent on the seriousness of a defect permitting rejection, so you're going to struggle if they say that moisture that is imperceptible (other than with a surveyor's meter) doesn't stop any usage of the boat and isn't materially adrift from normal on a 15 yo boat. To get your money back you need to write in words that just aren't there.

I think you have to walk away. This is exactly parallel to the demand I faced for a deposit on my French purchase. I said the rules under which I get the money back are just not clear, or stacked against me, and possession is 9/10ths, so I signed the contract with the deposit amount crossed out and replaced by €0.01 and gave it to them with my signature on it. It was "take it or leave it" - but remember it was a firm contractual obligation on me to turn up with the money a week later so long as they signed it too and turned up with the title docs. Would make sense to apply same policy on next boat in a buyers' market. Fortunately it isn't a huge sum on this one

 

[jfm]

In fact contract specifically states the deposit shall be held by the broker.

Perhaps surprising, but that isn't really how it works.

Contract wise they are 100% in the wrong.

Far from 100%, alas.

Their response was that to have high moisture readings in the cored hull is normal and its not a problem.

Actually they are right aren't they? In the context of this contract.

saying if I don't pay for the boat by the 26th of June (completion date on the contract) they will sue me for costs and losses even though I haven't accepted the boat.

They're right on that too. If the guy ultimately sells the boat for say €70k, expect a demand for €10,750 + costs, and then they'll get judgement in your absence in an IT court

Why don't you buy the boat Jez? The ONLY thing wrong is the moisture reading but put that in perspective: it's a few water molecules FFS, in a boat. If you bought this boat and by mistake the surveyor's meter had been broken and recorded zero moisture, would you ever have noticed? OK the next buyer, if British, might complain, but that's years down the line. Just go ahead and buy it and don't worry about the moisture, which is a total non event

 

[Whitelighter]

Interesting JFM.

My marine lawyer disagrees with you - not saying you are wrong but I have two differing opinions from two people I respect.

There are other material defects which we have passed on and are summerized in an engineers report including significant damage to the generator and poorly maintained stern gear which. Perhaps not an issue but pre-contract discussions these items were offered as new.

 

[benjenbav]

BJB, hesitating to differ with you on such a matter but afaik that isn't correct. AFAIK, broker functions as stakeholder in relation to the deposit, not as agent of seller, in the "standard" UK contract. He therefore holds the deposit on trust and cannot give it to seller until the buyer's potential claim has been extinguished. That's how every UK boat contract that I've touched has been written, at least. It is a world away from what you describe and results in brokers being very careful indeed about handing over deposits to either party in the event of a survey dispute

Of course, creating trust obligations under IT law is going to be quite different

Apologies. I was looking at the RYA's standard contract for sale of a used stock boat so no wonder there was no mention of a broker having any role. Shoulda looked at the words at the top of page 1, bjb.

Having since looked at the actual contract; at least the broker has signed... But, as mentioned, there are plenty of difficulties.

 

[jfm]

Interesting JFM.

My marine lawyer disagrees with you - not saying you are wrong but I have two differing opinions from two people I respect.

There are other material defects which we have passed on and are summerized in an engineers report including significant damage to the generator and poorly maintained stern gear which. Perhaps not an issue but pre-contract discussions these items were offered as new.

Does he disagree with me on (a) the wording of the contract or (b) the severity of the moisture thing?

If (a), then I'd say 2 things. First, I'm sticking to my story and will avoid any game of lawyering Top Trumps; second, if he advised you on the contract before you signed it then he would say that.

If (b), I'd say you need to put yourself in IT shoes. In the UK we fret terribly about osmosis and moisture, but in the western Med people could hardly care less. You see osmosis blisters in all the yards during annual lift outs, and they expect moisture in a boat that has sat in water 15 years with total hardstnading time <15 weeks. They also take the view, as do I, that unless a surveyor tells you about the moisture you will never ever know about it. There are far more important things to worry about. so put yourself in their shoes: your rejection of the boat for moisture feels to them like a guy rejecting a boat because he doesn't like the scatter cushions. No wonder the broker has paid over the deposit to the seller.

As I said, and prior to the genset and winch info, I'd say forget the moisture and just buy the boat and enjoy it. As regards the genset stuff, devil is in detail but if there has been a misrep about the genset condition (I mean, if there really has, rather than a genuine "see the world differently" thing like the moisture) then of course you should ask for a €2k reduction or whatever. I cannot see that a 5kw genset (?) is a dealbreaker when you're getting an otherwise nice Azi 42 close to where you want it for £62k. you're in danger of blowing your nose to spite your face or whatever the saying is

Just saying it as I see it, not picking a fight, but for a boat that good at £62k be careful about rejecting it!

And one more thing. Might sound like manlogic but it is actually real. This boat is only costing you £59k. That is the money you are required to pay over in order to own it. The deposit is gone, and doesn't now feature in any buying analysis. If you reject this boat, how much more than £59k will you spend to get the same machine?

And extend that further - let's assume they do successfully sue you for €10k. You have to cut a check for £7k if you don't buy this boat. but not if you do buy it. So the cost - the net cash outflow to you - of buying this boat is really £52k. There is nothing this good at that price on the market