How Do I Check Who Owns It/Is There Any Other Finance Interests

[Bassplayer]

As a relative newcomer on here I have just picked up on this thread. As I see it brokers don't like sellers to talk to buyers as they are scared of losing their commision. Simple way of avoiding the dodgy broker is for the deposit on the boat to be the same as the brokers commision, paid by credit card to the broker. This ammount is then secured by virtue of the fact of it being covered by the Consumer Credit Act. Broker is happy as his commision is secure, seller knows buyer is serious, buyer knows he can reclaim his money if the broker goes bust during the transaction. Final payment by transfer direct from buyer to seller. That IMHO covers the broker angle.
To make a boat a little more secure against change of identity, there are plenty of ways of adding ID using established methods from the automotive world - such as Smartwater, Datatags,etc. If my cat and parrot have a datatag, then surely a boat could have a few? Perhaps these devices could be added to the Part1 registration? I do agree, however that more security is needed. The caravan industry managed it with CRIS, so why can't the boat industry?

 

[gjgm]

As a relative newcomer on here I have just picked up on this thread. As I see it brokers don't like sellers to talk to buyers as they are scared of losing their commision. Simple way of avoiding the dodgy broker is for the deposit on the boat to be the same as the brokers commision, paid by credit card to the broker. This amount is then secured by virtue of the fact of it being covered by the Consumer Credit Act. Broker is happy as his commision is secure, seller knows buyer is serious, buyer knows he can reclaim his money if the broker goes bust during the transaction. Final payment by transfer direct from buyer to seller. That IMHO covers the broker angle.
To make a boat a little more secure against change of identity, there are plenty of ways of adding ID using established methods from the automotive world - such as Smartwater, Datatags,etc. If my cat and parrot have a datatag, then surely a boat could have a few? Perhaps these devices could be added to the Part1 registration? I do agree, however that more security is needed. The caravan industry managed it with CRIS, so why can't the boat industry?

This doesnt really work. You have no contract with the broker, so there is no need to pay him anything. You never will pay him anything.The seller pays him. The deposit is a good will gesture to show commitment, and , arguably, to give the seller some protection that he doesnt then loose a subsequent sale through unreasonable grounds.
The really grey area I believe is that people are not familiar with the risks involved in buying and selling a boat. That means they may take risks that were unnecessary.Yes, there are some risks that cant be mitigated, but these risks are due to illegal behaviour. The law is there, but as with many things in life, not everyone observes them, and then they face the consequences.

 

[Imperial One]

Default How Do I Check Who Owns It/Is There Any Other Finance Interests

SIMPLE - Use a BMF member broker.

We are happy to do everything, legally, correctly, promptly and with never a problem in the 15 years of business we've under our belt.

No, we are not a big outfit like the late BA was but then we are happy where we are............Providing a good, solid totally legal and efficient business service.
Boats are secure, they have HIN nos, engine nos all on the paperwork that a proper broker will always insist on and check for you - with the Part 1 or SSR Registration Authorities.
We operate legally run Client Account(s) and we have to prove this annually to the BMF, so far we have had no complaints from buyers or sellers alike.
Why, some of our customers even come back to us again and again.

Stop bashing brokers, embrace one and you might be pleasantly surprised.
Our reputation is hard earnt and very easily ruined if we screw up.
It is too easy to tar us all with the same brush as some of the unscrupulous others who are no longer around.

ABYA are OK but IMHO the BMF is the best qualification to look for when choosing a broker.

 

[gjgm]

SIMPLE - Use a BMF member broker.

We are happy to do everything, legally, correctly, promptly and with never a problem in the 15 years of business we've under our belt.

No, we are not a big outfit like the late BA was but then we are happy where we are............Providing a good, solid totally legal and efficient business service.
Boats are secure, they have HIN nos, engine nos all on the paperwork that a proper broker will always insist on and check for you - with the Part 1 or SSR Registration Authorities.
We operate legally run Client Account(s) and we have to prove this annually to the BMF, so far we have had no complaints from buyers or sellers alike.
Why, some of our customers even come back to us again and again.

Stop bashing brokers, embrace one and you might be pleasantly surprised.
Our reputation is hard earnt and very easily ruined if we screw up.
It is too easy to tar us all with the same brush as some of the unscrupulous others who are no longer around.

ABYA are OK but IMHO the BMF is the best qualification to look for when choosing a broker.

I m not sure who the "broker bashing" comment was directed at?

Anyway,apart from a client account, I cant see a broker can do anything that is beyond a private individual... I totally agree with you, the steps you take, the checks you make, the client account process etc etc SHOULD ( and nearly always does) mean that a purchase/sale goes happily. I think that is what many of us have been saying. Others- and fair enough-feel that if someone goes to some, perhaps extreme, lengths to con you, you might well be conned. You know, false papers, re-geled HIN numbers,engines re numbered etc etc..Or they run off with your money, and the boat. or they didnt own it anyway. Ahhhh, yes, I guess you might indeed be conned.Seems to me though, we are talking about quite some effort to achieve that. And its not very likely, but, I concede, its possible.

 

[raintownjimmy]

And if it's registered in Germany?

I understand how to check this if the boat is UK registered - anyone ever checked on a German registered boat?

 

[jfm]

SIMPLE - Use a BMF member broker.

Oh yeah, great idea. Brian Peters was the sodding chairman of BMF

ImperialOne, I don't doubt for one minute that you run an honest a good quality brokerage. But thatv is because you're honest, it's not because you are a BMF member. There is no causal link between being a BMF member and being honest. BMF accreditation per se means nothing to the punter, esp after the Peters case, where it was found that BAP did not look after client account money properly. Honesty means everything to the man on the street, but unfortunately he can't tell an honest broker like you from the next Brian Peters.

Why dont you take the bull by the horns and change transactions around as I described above, whereby the boat not the money is held in escrow and the buyer pays seller directly. Then folks wouldn't need to rely on client accounts etc as they do now, and the whole debate as to whether cleint accounts are safe largely falls away. Why don't you take a lead in the industry and structure all your brokerage sales that way from now on? Job done.

 

[Deleted User YDKXO]

I understand how to check this if the boat is UK registered - anyone ever checked on a German registered boat?

I've bought boats in Germany, Holland and Spain and I'm just in the process of buying one in Italy. AFAIK, there are even less ways of checking clear title to a boat in a foreign country than there are in the UK. For example I do not believe that German registration records details of mortgages on a boat, at least not a pleasure boat. The best thing you can do IMHO is to be physically present at the boat when you transfer the balance owing to the broker and then as soon as you have confirmation that the money has hit his account, take posession of the boat and get it out of the country or at least move it to another location. I think the worst thing you can do is transfer the money whilst you are in the UK because there's always the chance, however remote, that the boat might not be there when you eventually turn up to get it

 

[MapisM]

I've bought boats in Germany, Holland and Spain and I'm just in the process of buying one in Italy. AFAIK, there are even less ways of checking clear title to a boat in a foreign country than there are in the UK.

By buying one in Italy, do you mean one registered in IT? Because if so, there's a way: mortgages are notarised and registered.

 

[Imperial One]

morgages & clients money

Oh yeah, great idea. Brian Peters was the sodding chairman of BMF

ImperialOne, I don't doubt for one minute that you run an honest a good quality brokerage. But that is because you're honest, it's not because you are a BMF member. There is no causal link between being a BMF member and being honest. BMF accreditation per se means nothing to the punter, esp after the Peters case, where it was found that BAP did not look after client account money properly. Honesty means everything to the man on the street, but unfortunately he can't tell an honest broker like you from the next Brian Peters.

Why dont you take the bull by the horns and change transactions around as I described above, whereby the boat not the money is held in escrow and the buyer pays seller directly. Then folks wouldn't need to rely on client accounts etc as they do now, and the whole debate as to whether cleint accounts are safe largely falls away. Why don't you take a lead in the industry and structure all your brokerage sales that way from now on? Job done.

Yes, BAP was chairman of the BMF at the time of his companies demise.
That whole situation, just like the more recent one, has badly tarnished the industry, Undeniably.
As in all walks of live there will always be those who care to 'operate' close to or even the wrong side of the line. Bad news always gets headlines, the majority who operate above the law and do a good job just don't make the news.

Thank you for your kind comments, however we are not just a brokerage, we also sell new Dutch Motoryachts. The Dutch Trade association, HISWA, has very good contracts which protect the buyer and seller hugely better than the UK contracts do. When the BAP saga unfolded I wrote to the Mags, RYA and the BMF and suggested that we should adopt the same contract format. I was asked to and supplied copies to all both the RYA and BMF. I had a few conversations with the legal team at RYA and BMF but it all petered out (no pun intended).

The HISWA contract for a new boat immediately registers the new build in the name of the buyer. As each stage payment is made and items, engines, navgear etc., are procured these also become the property of the buyer.
So, in the event of the builder going bust, the boat at whatever stage of construction it is at, belongs to the buyer NOT the Official Receiver or administrator. Certainly better than in the UK you will agree.

We always advise our new boat buyers to sign a HISWA contract rather than a UK one.

As for brokerage boats, there is also a HISWA contract for that which again provides good protection for both parties. Fine, again, in Holland.

However, we are here in the UK and are left with UK practice and law.
We use BMF contracts and always put the deposit money in a Clients Account. Proper receipts are sent to the buyer.
Such money is NOT used nor counted as business cash flow because it is NOT our money but is held in trust on behalf of the buyer to show good will to the seller that he is buying the boat.

When selling, we run a check with the MCA Part One registry to see if there are any outstanding mortgages on a boat. If there is we contact the lender to advise them of the sale and ask for a settlement figure, we discharge the mortgage on the day of completion from funds received.
The balance is then sent IMMEDIATELY by same day Transfer to the sellers account.
By this time we would also hold a signed Bill of Sale in favour of the buyer and all the other Ships papers and at the point of transfer of funds, the boat changes ownership.

If the boat is not on the part one registry then things can get a little blurred.
As it stands the only way to legally secure a charge against a British Ship is to register it as such on the part one register.
That is why we check it, known as asking for a transcript of the registry.

An SSR registration is a lower cost method of registration and is often used by owners who intend to travel overseas and need to prove registry in the UK. It is not possible to register a charge against a ship on SSR.

If someone has taken a personal loan to buy a boat, it cannot be secured against the boat. It may be secured against their home if taken as a second mortgage but it cannot legally be secured against the boat.
Therefore, it is perfectly possible that the seller may have outstanding finance which he raised to buy his boat but unless it is on a part one register it cannot be secured against the boat. When he sells the boat he is still liable for the payments on that loan and if he defaults, the loan company can not have any charge on the boat.

The Bill of Sale asks the seller to sign a legal declaration that there are no outstanding mortgages or liens against the boat and he has to do this.
Not 100% foolproof as said elsewhere on the thread but it is the best we've got at the moment. You cannot legislate against law breakers. If someone wants to cheat they will find a way.

I regularly put buyers and sellers together as it is important to let them talk to each other and is often a very good thing to do.
I have no problem with it at all.
Some folk will try to 'squeeze' the broker out of the deal but they are normally predictable and they always get caught out - naturally none of them would be on this forum anyway, well, apart from a recent one who I am aware of!

I would happily let the buyer pay the seller directly if they so insisted, as long as we check the register and tell him how to divide the payment.
That is part of the job that we are here to do and most of us do it well, professionally and accurately.

There was a comment somewhere about Brokers making money on deposit accounts, yes we do get a small amount. Trust me it does not cover the running costs of the account. Most transactions for example, with the exception of the agreed deposit amount which is never more than 10%, the money is in and out of the account on the same day so may earn 8 or 10 pence on a good day.

Change is sometimes a good thing, especially if it improves a system that is in need of repair.
I am always open to change and as such JFM maybe here is an opportunity for us to improve things together.
The next time you change your boat do give me a call and lets both work together using some of your ideas and our experience. I am sure I can get a Magazine to overlook the whole transaction and report to the wider boating public on the way it all goes.

With luck, perhaps we could be remembered as the ones who improved the Broking world and restored the word trust into the boating community.

 

[Imperial One]

german boats

I understand how to check this if the boat is UK registered - anyone ever checked on a German registered boat?

Yes, we have taken them in part ex against new boats.
Their registry in Germany is always accompanied by a cetificate of de registration when sold on.

Either contact he German registry with the ships number or a good broker in the UK or Germany should be able to check this for you.

Hope this helps.
Mike.

 

[Deleted User YDKXO]

By buying one in Italy, do you mean one registered in IT? Because if so, there's a way: mortgages are notarised and registered.

Thanks Mapism, I didnt know that. Just returned from Lignano today having carried out survey and seatrial on F53. Brrr it was cold Yup, the F53 was registered in Italy but has recently been re-registered in USA (!) apparently to make it easier to move registration to another country. Does that sound right? The story is that it is difficult to change from Italian registry to British registry

 

[DAKA]

We use BMF contracts and always put the deposit money in a Clients Account. Proper receipts are sent to the buyer.
Such money is NOT used nor counted as business cash flow because it is NOT our money but is held in trust on behalf of the buyer to show good will to the seller that he is buying the boat.

You choose to do that but there is no legal requirement for you to do so, I accept you are honest and you are doing your best to protect the cash of others BUT

It is not illegal for you to take cash out the account.
When rouges get caught they just claim at the time they took the money out they intended to pay it back and a prosecution is unlikely hence we dont hear about many cases.

It is also possible that your trust account has technical issues which will allow an administrator access to your perceived clients funds, (I have no doubts from your post that you are the type of person with high morals and your business will remain solvent) but these issues put clients funds at risk with other brokers even if not in your case.

If the marine industry wish to carry on holding money which does not belong to them then a compensation scheme needs to be funded and an act of parliament is required, not good intentions.

 

[MapisM]

the F53 was registered in Italy but has recently been re-registered in USA (!) apparently to make it easier to move registration to another country. Does that sound right? The story is that it is difficult to change from Italian registry to British registry

Not right at all, I'm afraid.
And even if it was, why bother to do that before knowing if the new owner wants to change the registration at all?!?
Was the boat moored in Lignano ("Punta Faro"), or actually in the bigger "Aprilia Marittima" area nearby (turning left on the main road, a couple of miles before arriving to Lignano)?
Because if the first, a friend of mine is a regular around there. If you pm me the boat name, I can ask him if he knows anything about her.
Sorry for the weather, I hope you at least took the opportunity to try some sea food at Bidin restaurant.
That alone is almost worth a trip down there.

PS: any findings on those weird consumption numbers of the previous survey?

 

[Tranona]

You choose to do that but there is no legal requirement for you to do so, I accept you are honest and you are doing your best to protect the cash of others BUT

It is not illegal for you to take cash out the account.
When rouges get caught they just claim at the time they took the money out they intended to pay it back and a prosecution is unlikely hence we dont hear about many cases.

It is also possible that your trust account has technical issues which will allow an administrator access to your perceived clients funds, (I have no doubts from your post that you are the type of person with high morals and your business will remain solvent) but these issues put clients funds at risk with other brokers even if not in your case.

If the marine industry wish to carry on holding money which does not belong to them then a compensation scheme needs to be funded and an act of parliament is required, not good intentions.

Sorry Pete, you are again taking a wrong line here.

Of course it is illegal for somebody to take money out of a client/trust account for their own purposes! Just "borrowing" it would not be a defence!

Of course there is no "legal" requirement for a broker to use a client account. How could there be? Individuals are free to contract in the way they want. The law is there to provide the mechanisms to do this effectively.

As to the marine industry "holding money" - as Imperial has pointed out it does not normally hold money for any length of time when acting as agent. With new boats more significant sums are held but they are within the terms of the contract, which are very similar to the HISWA contract described above.

As to an Act of Parliament - what would that say and how would it provide any better protection than is already available under the current laws of contract, agency, trust and consumer protection?

 

[DAKA]

Sorry Pete, you are again taking a wrong line here.

Could be but somewhere lost in the above posts is my previous explanation which follows in brief.
Now even if my understanding is incorrect it still has a place in this thread as Yacht Brokers and Legal experts such as your good self need to understand some of the fears and apprehensions that potential buyers/sellers have.

,
"Of course it is illegal for somebody to take money out of a client/trust account for their own purposes! "

As there is no legal requirement for a trust to exist then the Trust may not be formatted correctly, in which case it isnt trust money and it can be borrowed or in the case of administration the Administrators would be legally obliged to use it to pay other creditors. Two years ago I could understand why some may assume I am trolling or talking from my rear end but now we have the Peters case for an example.

"Just "borrowing" it would not be a defence!"

Its the no 1 defence, no sign of any prosecutions from Bptrs or Tcapl perhaps if you were a judge you could see through the nonsense and find guilty but in reality CPS know it is incredibly difficult to win successful fraud cases.

'"Of course there is no "legal" requirement for a broker to use a client account. How could there be? Incontract, agency, trust and consumer protection?dividuals are free to contract in the way they want. The law is there to provide the mechanisms to do this effectively."'

If an act of parliament was passed to the effect Yacht Brokers cant hold client money unless it is in a statutory trust account then the money in the trust accounts couldnt be used by anyone other than the owner.

"As to the marine industry "holding money" - as Imperial has pointed out it does not normally hold money for any length of time when acting as agent. With new boats more significant sums are held but they are within the terms of the contract, which are very similar to the HISWA contract described above."

BPetrs or Tchaple presumably didnt hold money for long but long enough for a few to get their fingers burnt

"As to an Act of Parliament - what would that say and how would it provide any better protection than is already available under the current laws of "

As above, and it could also force a compensation scheme to be funded in the same way as the Law society and Insurance Industry, its not rocket science, its already in place to protect other consumers.

I am more than happy to agree you have a sound legal understanding of the situation, however in practise Trust accounts are incredibly difficult to format correctly (not for you no doubt but for the Brokers, and the various Marine federations who are currently purporting to give guidance, have you read it ? )

"3.2 The Member shall set up a Client Account, designated as such, and identified at the Bank as such, where he shall hold all client monies, as these monies are held in trust for the client and are not to be used for company purposes."

Nice bit of advice perhaps written by someone who doesnt really know how to achieve this but it sounds good , but this is where I fear the theory and reassurances of the trade associations stumbles, it needs further explanation and legislation.

 

[Tranona]

Very woolly thinking! What are yoiu trying to legislate against?

1 There is no compulsion to use client accounts. There are other mechanisms available to facilitate transactions if you wish. However, client accounts are well established as is the law regulating their use. Brokers get advice from their trade bodies on how to do them properly and thousands of transactions go through them every year without problems.
2 In all these threads NOBODY has come up with a real case of a Broker stealing from a client account and clients losing out.
3 Your examples are not problems with the operation of client accounts. BA Peters was an issue about what was covered by the client account. There was no suggestion that the account was not operated correctly. The issue was about which funds legitimately came within the trust. The advice now is that anyone paying funds to a client account should obtain confirmation as to where the funds were deposited. This is absolutely clear in for example ABYA procedures and advice given to clients by bodies such as the RYA. Unless you know somerthing that is not in the public domain, there is no suggestion that Tony Chapell, whatever else he may have done or not done, has stolen from a client account.

So, what is the problem you are trying to solve with an "Act of Parliament". To change the law (or create a new one) you have to demonstrate that there are wrongs that cannot be dealt with by the existing law. This is clearly not the case here.

Similarly, if you want to create a compensation scheme, you have to demonstrate people are losing out in a way that they are not able to remedy using existing laws. Again not the case here as there is no evidence of losses. However if there are losses, you have to demonstrate the probability of these losses occuring, the situations in which they occur and the sums involved. You can then establish an insurance risk (which is what a compensation scheme is) that prices that risk and requires premiums (ie additional costs) from all participants who want to be protected from that risk.

As there is no identifiable and measurable risk in using client accounts there is no need for insurance and no need to incur unnecessary additional costs.

There are of course potential holes in all laws that govern relationships between people which dishonest people can seek to exploit for their own benefit. That is why we have laws that are tried and trested to be fair to all parties. However, you can never legislate totally against dishonesty except perhaps by a law that makes any criminal action punishable by something nice like hanging, drawing and quartering. As you know this was a common punishment 400 years ago - but the fact that the punishment was used regularly suggests that even that was not a deterrent to a determined offender!

As has been pointed out over and over again in these threads, you cannot remove risk completely from transactions which are often complex and involve large sums of money. However there are more than enough mechanisms available to virtually eliminate that risk. If you do not feel you understand enough about the risks to deal with them yourself, then take professional advice. This will of course cost, but gives you the protection you need against your potential mistakes by paying somebody else to take responsibility for them.

 

[Deleted User YDKXO]

As to the marine industry "holding money" - as Imperial has pointed out it does not normally hold money for any length of time when acting as agent. With new boats more significant sums are held but they are within the terms of the contract, which are very similar to the HISWA contract described above.

Not true, tranona. As you know I've bought and sold quite a few boats and I've often had to wait days and weeks for money to be paid out to me after a boat has been sold. In one particular case with a well known Thames broker, I was given the run around (the usual excuses 'computer broken', 'director on holiday' etc) and had to resort to involving a solicitor before I got paid out and that was the best part of a month after the buyer paid the broker.
With all due respect to brokers present here, I am convinced that some unscrupulous brokers dip into client accounts to fund day to day costs of their business and hang on to clients' money to make a bit of interest. It wasn't that long ago that you could make 0.5% on depositing money for just one month which is a sizeable bit of bunce on top of the usual broker's commission.
As we have argued regularly on this forum, there may be a legal remedy against a broker misusing client accounts but by the time it is applied, the money is long gone usually

 

[DAKA]

As has been pointed out over and over again in these threads, you cannot remove risk completely from transactions which are often complex and involve large sums of money.

Not handing money to a Broker that has no legitimate reason to hold it is a start.
Legislation gives the Broker an option

Hold money in a statutory trust account and pay towards a compensation scheme

or
Dont hold on to money that doesnt belong to you.

I think most people would trust a Solicitor more than a Yacht Broker to hold money, Solicitors have compensation schemes.
Insurance brokers have compensations schemes
Banks have compensation schemes

Are you suggesting Yacht Brokers are more trustworthy or solvent than others ?
I must be missing something obvious

 

[Tranona]

Not true, tranona. As you know I've bought and sold quite a few boats and I've often had to wait days and weeks for money to be paid out to me after a boat has been sold. In one particular case with a well known Thames broker, I was given the run around (the usual excuses 'computer broken', 'director on holiday' etc) and had to resort to involving a solicitor before I got paid out and that was the best part of a month after the buyer paid the broker.
With all due respect to brokers present here, I am convinced that some unscrupulous brokers dip into client accounts to fund day to day costs of their business and hang on to clients' money to make a bit of interest. It wasn't that long ago that you could make 0.5% on depositing money for just one month which is a sizeable bit of bunce on top of the usual broker's commission.
As we have argued regularly on this forum, there may be a legal remedy against a broker misusing client accounts but by the time it is applied, the money is long gone usually

I used the word "normally", and think this properly represents what goes on. This does not of course mean that individuals may behave differently, but again in all these threads delays is not a common issue.

Really would like to see some concrete evidence to support the statement in your last paragraph. I do not recall seeing ANY documented cases of brokers stealing from client accounts, let alone being long gone.

By all means raise the potential problems and discuss ways of avoiding them - that has been a very useful outcome from this thread - but don't say things happen that don't seem to unless you have evidence to support your statements.

 

[DAKA]

By all means raise the potential problems and discuss ways of avoiding them - that has been a very useful outcome from this thread - but don't say things happen that don't seem to unless you have evidence to support your statements.

The evidence will not be there if my continued argument is correct that if the Client account isnt formatted correctly then the courts/CPS could assume the money isnt clients money and it is Yacht Brokers money he is legally free to take out the account himself especially if at the time he only intend to borrow it for a few hours or it is money available to administrators which has perhaps happened recently.

I thought there were examples above , a Corniche or Turbo 36 among others ??