If a Broker goes bust and takes the Client account monies with them - who loses out

[ontheplane]

Oh Gawd it just gets worse!!

Now in the motor trade, when I buy in a stock car I just HPI it.

This tells me if it's stolen, has outstanding finance and so on....

I take it that there is no equivalent in boating, and so how the heck do I know if the boat has been used as security on a debt? - Marine loan, mortgage or any other debt for that matter?

 

[DAKA]

Yes point taken, I should have qualified that better.

I mean it is never the banks money in the sense that the bank cannot use it to offset any other loans or overdrafts the broker may or may not have.

as in..


b) you are not entitled to combine this account with
any other account or to exercise any right of set-off or
counterclaim against money in this account in respect
of any sum owed to you on any other account of ours;

Hi Jonic,

I realize you are not intentionally misrepresenting the facts and I have no doubts that you and many other Yacht Brokers are attempting to act morally , however your post comes across as a fact of all Yacht Brokers transactions, please qualify it in order to make it clear that your phrase is actually just a voluntary code of conduct which a few yacht Brokers choose to comply with.
*If you do not qualify as such I am afraid I have to state its a load of cobblers !*

*to be deleted as soon as you qualify your remark*

 

[PCUK]

No proof of VAT paid in the form of original invoices is likely to be a nightmare for you. Without these you should expect a large reduction in price.

 

[jfm]

A broker's client account is ringfenced from the broker,and becomes an asset of the bank, but not ringfenced from the bank?
I am a bit confused. A bank can also have a client account, where I thought the idea was to ringfence the funds from the bank's business. Have I got that wrong then, or is this a difference between the broker having a client account, and the bank having a client account?

Not sure I fully agree with paul gooch's reply, though I might be misunderstnading. The money isn't ringfenced from the bank's other businesses and is therefroe at risk if the bank goes bankrupt. The broker, even though he is a trustee holding the clinet account money, is a mere creditor of the bank. The bank does not hold the money on trust, as trustee, in a client account. But really there are bigger things to worry about than this. Otherwise none of us would deposit our cash with banks at all

Jonic explains what he meant anyway in a subsequent post, which makes sense. And Daka correctly reminds us a broker can borrow from a client account but of course that should be fixed by documenting the trustee's powers and prohibitions as to what he may do with the trust moneys, and prohibiting him from borrowing (not that that will really protect you if broker is dishonest, though as jonic points out, few are). and i would remind you it is possible to sell a boat with no material money held by any trustee or broker; you just put the physical boat into the trust (which broker cannot really steal), not the cash, QED, but no-one least of all the brokerage industry seems to want to do that, ho hum!

 

[jonic]

Oh Gawd it just gets worse!!

Now in the motor trade, when I buy in a stock car I just HPI it.

This tells me if it's stolen, has outstanding finance and so on....

I take it that there is no equivalent in boating, and so how the heck do I know if the boat has been used as security on a debt? - Marine loan, mortgage or any other debt for that matter?

You are correct. There is no equivalent.

A good broker will perform a due diligence check before taking the boat on.

There is no absolute proof of title through registration.

SSR is almost worthless in that respect.

Part 1 is pretty good evidence but not absolute proof.

There is no central database to refer to so we will begin by cross referencing all the paperwork against the HIN or Engine number.

We will then check photo ID (i.e passport) against the names on the paperwork.

We will look for an unbroken chain of original title documents starting with the Builders Certificate, then each subsequent Bill of Sale until present ownership.

We will also want to see original VAT paid evidence.

If any of these documents are copies, particularly if it is a combination of the VAT documents and Title documents, alarm bells start ringing as the documents may be being held as security by a bank.

If part one registered we will order a copy of the registration transcript. This should show any recorded mortgages, however you are relying on the bank making that record in the first place.

If suspicious we will also write to the major marine finance houses and ask them to check their records. They will reply, usually along the lines of we have no record of outstanding finance, but we can't guarantee it.

If the boat gets past these tests I insist the following is signed before I will take it on.



This confirms that I wish xxxx xxxxxxxxx Yachts to act as Brokers in the sale of the above yacht and declare:

[Delete as applicable]

1. I am entitled to offer this yacht for sale and posses full and clear title [YES] [NO]
2. I can provide the current original Bill of Sale and at least five years of original title history e.g. previous Bills of Sale and/or Builders Certificate. [YES] [NO]
3. I can provide the current ships registration certificate. [YES] [NO]
4. I can provide original evidence the yacht is vat paid e.g. vat invoice or customs receipt. [YES] [NO]
5. I can provide the RCD certificate of conformity or the yacht is exempt from the RCD. [YES] [NO]
6. Is the yacht encumbered with mortgages, hire purchase, taxes, debts or liens of any kind? [YES] [NO]
7. Is the owner selling in the course of a business? [YES] [NO]
8. Is VAT chargeable on the sale price? [YES] [NO]
9. Is the yacht insured and will it be insured for the duration of this agreement? [YES] [NO]

To the best of my knowledge and belief, the attached or supplied details and particulars of the yacht are correct and I know of no defects in the yacht other than those disclosed in writing. I agree to indemnify xxxx xxxxxxxxx Yachts against any liability, costs and expenses incurred in the event of the particulars or the above statements being proven incorrect or misleading. In the event of a sale by xxxx xxxxxxxxx Yachts or a sale to a buyer first introduced by xxxx xxxxxxxxx Yachts I agree to pay commission at the applicable rate as per terms agreed and that the original (not copy) documents listed above will be made available at the time of completion.

Once we list it they also sign up to this:


14 DUTIES AND TAXES (Delete if inapplicable)
The Owner declares that his yacht is offered free of all import duties and other UK, EU or foreign taxes in respect of which the Owner agrees either to indemnify the Broker, or that these will be settled by the Broker from the sale proceeds on completion of the sale.

1.1 .... 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....


And when the boat is sold they sign again to this:


(iv) By delivery of documents in (i) and (ii) and (iii) of this Clause, be deemed to covenant that he has the power to transfer property in the vessel and that the same is free from encumbrances, duties, taxes, debts and liens except as are the responsibility of the Purchaser under Clauses 4 and 8 hereof.

and finally on the Bill of Sale

IF ANY REGISTERED MORTGAGE IS OUTSTANDING YOU MUST TICK THIS BOX
Further, **I/we, as transferor(s), hereby declare that **I/we have the power to transfer in the manner described above the above
mentioned shares, and that they are free from encumbrances [save as appears by the registry of the above ship].
(delete this paragraph and initial the deletion if there are NO outstanding mortgages



It never ceases to amaze me how often I am asked to sell boats that have defective title paperwork.

I had one guy come to me with no original title documents and on the Bill of Sale only 32/64ths had been transferred.

He had a vague explanation for this, so I asked for his passport to begin cross checking. He refused and said no other broker wanted to go into such detail and I was clearly trying to steal his identity!

 

[Mrs Doubtfire]

No Chance

The money side of things can only be dealt with by a civil court. So long as you have a Bill Of Sale from the previous owner passing title to you (new Owner) that is clear ownership.
It would be the previous owners fault if he let the boat go without the funds being paid for the boat, and this is highly unlikely. Also he would of had to of signed a new Bill Of Sale so would of known full well that the funds were or already paid to the broker.
After P&M went side ways this is almost impossible to do. Every brokerage house now has a client account.

 

[jfm]

You are correct. There is no equivalent.

A good broker will perform a due diligence check before taking the boat on.

There is no absolute proof of title through registration.

SSR is almost worthless in that respect.

Part 1 is pretty good evidence but not absolute proof.

There is no central database to refer to so we will begin by cross referencing all the paperwork against the HIN or Engine number.

We will then check photo ID (i.e passport) against the names on the paperwork.

We will look for an unbroken chain of original title documents starting with the Builders Certificate, then each subsequent Bill of Sale until present ownership.

We will also want to see original VAT paid evidence.

If any of these documents are copies, particularly if it is a combination of the VAT documents and Title documents, alarm bells start ringing as the documents may be being held as security by a bank.

If part one registered we will order a copy of the registration transcript. This should show any recorded mortgages, however you are relying on the bank making that record in the first place.

If suspicious we will also write to the major marine finance houses and ask them to check their records. They will reply, usually along the lines of we have no record of outstanding finance, but we can't guarantee it.

If the boat gets past these tests I insist the following is signed before I will take it on.



This confirms that I wish xxxx xxxxxxxxx Yachts to act as Brokers in the sale of the above yacht and declare:

[Delete as applicable]

1. I am entitled to offer this yacht for sale and posses full and clear title [YES] [NO]
2. I can provide the current original Bill of Sale and at least five years of original title history e.g. previous Bills of Sale and/or Builders Certificate. [YES] [NO]
3. I can provide the current ships registration certificate. [YES] [NO]
4. I can provide original evidence the yacht is vat paid e.g. vat invoice or customs receipt. [YES] [NO]
5. I can provide the RCD certificate of conformity or the yacht is exempt from the RCD. [YES] [NO]
6. Is the yacht encumbered with mortgages, hire purchase, taxes, debts or liens of any kind? [YES] [NO]
7. Is the owner selling in the course of a business? [YES] [NO]
8. Is VAT chargeable on the sale price? [YES] [NO]
9. Is the yacht insured and will it be insured for the duration of this agreement? [YES] [NO]

To the best of my knowledge and belief, the attached or supplied details and particulars of the yacht are correct and I know of no defects in the yacht other than those disclosed in writing. I agree to indemnify xxxx xxxxxxxxx Yachts against any liability, costs and expenses incurred in the event of the particulars or the above statements being proven incorrect or misleading. In the event of a sale by xxxx xxxxxxxxx Yachts or a sale to a buyer first introduced by xxxx xxxxxxxxx Yachts I agree to pay commission at the applicable rate as per terms agreed and that the original (not copy) documents listed above will be made available at the time of completion.

Once we list it they also sign up to this:


14 DUTIES AND TAXES (Delete if inapplicable)
The Owner declares that his yacht is offered free of all import duties and other UK, EU or foreign taxes in respect of which the Owner agrees either to indemnify the Broker, or that these will be settled by the Broker from the sale proceeds on completion of the sale.

1.1 .... 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....


And when the boat is sold they sign again to this:


(iv) By delivery of documents in (i) and (ii) and (iii) of this Clause, be deemed to covenant that he has the power to transfer property in the vessel and that the same is free from encumbrances, duties, taxes, debts and liens except as are the responsibility of the Purchaser under Clauses 4 and 8 hereof.

and finally on the Bill of Sale

IF ANY REGISTERED MORTGAGE IS OUTSTANDING YOU MUST TICK THIS BOX
Further, **I/we, as transferor(s), hereby declare that **I/we have the power to transfer in the manner described above the above
mentioned shares, and that they are free from encumbrances [save as appears by the registry of the above ship].
(delete this paragraph and initial the deletion if there are NO outstanding mortgages



It never ceases to amaze me how often I am asked to sell boats that have defective title paperwork.

I had one guy come to me with no original title documents and on the Bill of Sale only 32/64ths had been transferred.

He had a vague explanation for this, so I asked for his passport to begin cross checking. He refused and said no other broker wanted to go into such detail and I was clearly trying to steal his identity!

Jonic
With respect, and i know your intentions are good and don't doubt your honesty as a broker, that is a pretty amateurish set of papers. Lots of legally looking paragraphs but full of holes.

"Owner agrees either to indemnify the Broker..." WTF? What possible use is an indemnity in favour of broker in relation to import duties? And why give him a choice about indemnifying versus having the moneys paid out of preceeds? Or do you - in relation to the "either", exactly who has the choice? And so on. It's just Mickey Mouse legal drafting

And your "There is no absolute proof of title through registration....Part 1 is pretty good evidence but not absolute proof." shows that you just don't understand property law and the difference between title and ownership.

And "deemed to covenant" FFS! Why not an actual covenant?

Not wishing to shoot you down, but in forum's interest I feel a bit compelled to point out the crapicity of those clauses

 

[jonic]

Hi Jonic,

I realize you are not intentionally misrepresenting the facts and I have no doubts that you and many other Yacht Brokers are attempting to act morally , however your post comes across as a fact of all Yacht Brokers transactions, please qualify it in order to make it clear that your phrase is actually just a voluntary code of conduct which a few yacht Brokers choose to comply with.
*If you do not qualify as such I am afraid I have to state its a load of cobblers !*

*to be deleted as soon as you qualify your remark*

I am not misrepresenting anything. The phrase in the post you have highlighted is from Lloyds Bank.

All ABYA members are required to have a similar set up with their bank.

It is not law that you must join ABYA/YBDSA or similar body but I doubt you would get much business. I would recommend anyone using a yacht broker ensures they are a qualified and registered brokerage and have a correctly set up client account along with professional indemnity insurance. Ensure that any deposits or payments you make are to the client account.

YBDSA has been in existence for 100 years this year and there are over 170 brokerage firms that are members.

 

[ontheplane]

I can't believe that this is not sorted better in this day and age!!

The boat I am looking to buy is chump change compared to what some people spend on their boats - but it's still a lot of money to me.

The VAT thing I understand, I think the risk of HM Customs coming after me for the VAT on an old sportsboat originally sold in the UK is so small it's not a major consideration - a concern, but not a deal-breaker.

BUT FFS!!!! How hard can it be to start up a database of boats and mortgages? I mean lets be honest, there are how many million cars in the UK and HPI can do it for them - yet for a fraction of the number of boats, they can't! Yet the sums of money involved here can be colossal!

I think FWIW it's time the Marine industry through it's brokers and your umbrella organisation(s) need to sit down with the major finance houses and the boatbuilders and HPi - get in one room and just do it.

It's not hard - every time a boat comes up on brokerage, you HPI it - if it's not on the list, you add it - you do all the checks you normally do and upload them. Every boat sold new has to be added to HPI - which could have a section as to whether it's VAT paid or qualifying, and so on and so forth. It could log stolen boats, it could log everything.

It's so simple, the mechanism is already there for cars - a slight database tweek and it's done - has anyone actually ever asked HPi whether they could do the same for boats?

 

[DAKA]

I am not misrepresenting anything. The phrase in the post you have highlighted is from Lloyds Bank.

All ABYA members are required to have a similar set up with their bank.

It is not law that you must join ABYA/YBDSA or similar body but I doubt you would get much business. I would recommend anyone using a yacht broker ensures they are a qualified and registered brokerage and have a correctly set up client account along with professional indemnity insurance. Ensure that any deposits or payments you make are to the client account.

YBDSA has been in existence for 100 years this year and there are over 170 brokerage firms that are members.

here we go again

I gave you every opportunity possible to amend your post slightly in order to make it worthy of space however you choose to issue another smoke screen

BA Peters were ABYA members .
Need I say again what was going on, let me make it a bit simpler for you to understand................


You pay £100 000 for a boat to a Yacht Broker.
by close of business £90 000 or more has been offset against their over draught.


ABYA membership is not compulsory and any ABYA members can 'borrow' from their clients accounts without the risk of imprisonment, at worst they might get a stiff letter from the ABYA or expulsion but are free to do it again.

 

[ontheplane]

I am not misrepresenting anything. The phrase in the post you have highlighted is from Lloyds Bank.

All ABYA members are required to have a similar set up with their bank.

It is not law that you must join ABYA/YBDSA or similar body but I doubt you would get much business. I would recommend anyone using a yacht broker ensures they are a qualified and registered brokerage and have a correctly set up client account along with professional indemnity insurance. Ensure that any deposits or payments you make are to the client account.

YBDSA has been in existence for 100 years this year and there are over 170 brokerage firms that are members.

Surely if the YBDSA have been going for 100 years it's about time they sorted this out isn't it??

Also, I reckon there are 170 Brokerages just in Poole and Southampton alone - so that means the majority of Brokers probably aren't members!!!

And what if a member doesn't have the boat you want, but a non member does?

No - it's no good, buyers need better security - not just for their money, but for knowing what they are buying!! I wouldn't buy a £2000 car without knowing it's HPI clear, yet I am expected to buy a £8000 -£10000 boat without knowing if it's been stolen, subject to being security for a loan or anything else.

And c'mon - getting the "OWNER" to simply state "yes I own it, and it's free from lien" isn't a lot of use is it - if he's being dishonest by selling a boat subject to finance on it, he's hardly likely to be thwarted by a bit of paper asking him to declare the fact - he's just going to sign it and hope it doesn't come to light for a year or two, by which time he might have retired and gone to live in the Maldives!

If EVERY marine mortgage issued from tomorrow onwards were to be registered on a central database, which also had every total insurance loss, every stolen boat reported to police and/or insurance company and so on, within 10 years pretty much every boat would start to get a decent history.

 

[SailorBill]

It seems to me that the boat brokerage industry is a shambles. There is NO protection for a client against a broker doing a runner (for want of a better phrase) with a client's money. If this happens then there is virtually no chance that the client will ever see their money again because there is no compensation scheme in place to reimburse the client in the event of broker wrongdoing. All the broker has to do to avoid prosecution is to say they borrowed money from a client account and meant to pay it back. FFS!!!!!!

The vast majority of people in the recent poll on another thread said they thought there was some risk for the client when dealing with a broker. WAKE UP brokers! Your clients don't trust you! And why should they? Get a proper compensation scheme in place for your clients. Solicitors have such a scheme in place. Why haven't you?

I read an argument against the need for a compensation scheme because apparently solicitors need a compensation scheme because they regularly steal client's money. The implied assumption is that boat brokers are pillars of society who can be trusted more than solicitors and the proof of that is that brokers don't have a compensation scheme for their clients. Pull the other one.

The way things stand I see boat brokerage becoming an increasingly difficult way of earning a living. People are increasingly more savvy and are increasingly turning away from brokers to market and sell their own boats. Look at the number of websites springing up to do just that. Is it any wonder when the industry continues to bury its head in the sand?

 

[neale]

You can approach the big marine lenders by email and ask them if they have an interest in the boat. Use the boat make, model, name and most importantly, hull number.

This doesn't give you any guarantees but it just might throw up some info. I did this and was actually surprised at the number of answers I got as I was expecting very little. I have kept all the emails stating that they had no financial interest in the boat just in case.

 

[jfm]

BUT FFS!!!! How hard can it be to start up a database of boats and mortgages? ... get in one room and just do it. It's not hard - ... It's so simple, the mechanism is already there for cars - a slight database tweek and it's done - has anyone actually ever asked HPi whether they could do the same for boats?

It's harder than you think because a boat's identity is dead easy to change, much easier to change than a car's VIN and other numbers

 

[gjgm]

Oh Gawd it just gets worse!!

Now in the motor trade, when I buy in a stock car I just HPI it.

This tells me if it's stolen, has outstanding finance and so on....

QUOTE]
No, it does not , in fact.
All it tells you is if HPI have a record- that isnt quite the same thing.

 

[jonic]

Jonic
With respect, and i know your intentions are good and don't doubt your honesty as a broker, that is a pretty amateurish set of papers. Lots of legally looking paragraphs but full of holes.

"Owner agrees either to indemnify the Broker..." WTF? What possible use is an indemnity in favour of broker in relation to import duties? And why give him a choice about indemnifying versus having the moneys paid out of preceeds? Or do you - in relation to the "either", exactly who has the choice? And so on. It's just Mickey Mouse legal drafting

And your "There is no absolute proof of title through registration....Part 1 is pretty good evidence but not absolute proof." shows that you just don't understand property law and the difference between title and ownership.

And "deemed to covenant" FFS! Why not an actual covenant?

Not wishing to shoot you down, but in forum's interest I feel a bit compelled to point out the crapicity of those clauses

Don't worry JFM I am not feeling shot down

Those documents are provided to us by other lawyers and not being lawyers we accept what they tell us. The last clause is in fact from the MCA.

I am actually very interested in the contractual side, so I enjoy your input to these threads.

I will ask you a question with regards to part 1 registration we have always been advised that we can not say it is proof of ownership, just evidence.

Also on the certificate it says:

IMPORTANT INFORMATION
A certificate of registry does not prove ownership

I know there is a legal definition that defines the differences between title and ownership but generally is it not the case that they are used interchangeably in everyday dealings with boats? However I would be interested in you defining the terms as regards to boats.

Does part 1 registration prove anything at all?

Now go easy, I am not a lawyer, just an interested broker who is endeavouring to work to the highest possible standards.

 

[ontheplane]

True to both of you...


However it's better than nothing.

You can show that by asking HPI you have shown due dilligence, and it gives the buyer some confidence.

That level of confidence does not exist for a boat buyer - and given the sums involved I think it's time it did.

I agree it's easier to change a hull number than stuff on a car - but it could be made harder. And if all new boats were registered with HPi then changing the hull number would flag up a boat NOT registered as existing with HPi which in itself would flag up issues - you'd then phone the boat builder with the hull number, they'd say they didn't build that boat and so on and a trail of concern would be raised.

 

[jfm]

Don't worry JFM I am not feeling shot down

Those documents are provided by us other lawyers and not being lawyers we accept what they tell us. The last clause is from the MCA.

I am actually very interested in the contractual side, so I enjoy your input to these threads.

I will ask you a question with regards to part 1 registration we have always been advised that we can not say it is proof of ownership, just evidence.

Also on the certificate it says:

IMPORTANT INFORMATION
A certificate of registry does not prove ownership

I know there is a legal definition that defines the differences between title and ownership but generally is it not the case that they are used interchangeably in everyday dealings with boats? However I would be interested in you defining the terms as regards to boats.

Does part 1 registration prove anything at all?

Now go easy, I am not a lawyer, just an interested broker who is endeavouring to work to the highest possible standards.

No worries jonic! Problem with lawyers, ahem, is that while some of them are really very excellent a certain percentage are mediocre. We had for example a solicitor on the VAT thread who arranged a VAT payment in the UK without realising it didn't extinguish a VAT liability in Spain. Jeeze. Let's not get into a debate as to the aforementioned percentage but it begins with an 8 or a 9, very much imho!

Part 1 reg proves title, not ownership. It's very hard to explain differnce in a thread on here; better done over a beer. The tricky part is English law (and anglo saxon law generally) recognises the trust concept, so we have beneficial ownership on the one hand and legal ownership aka title on the other

Most chattels are owned benefically and legally by their owners, and there is no need to distingusih between legal and beneficial ownership, and generally there is no point. With registered or similar assets however (land, boats, company shares, bank accounts, etc) you can distinguish and peoplle often do. Now people, often unwittingly, mean beneficial ownership when they say they own something but it is important to undersntad the distinction esp when dealing with registered property like boats. In anglo saxon legal jurisdictions it is perfectly possible to own something beneficially without being the registered owner. It is very common for example for company shares to be registered in the name of an owner who is in fact a trustee or nominee for someone else. The registered owner would appear in the records of the company, receive the dividend cheque, have the rigth to vote, and if the shares were sold would be the person who signs the bill of sale (which is called a "stock transfer form" in the case of a company but its exactly same as a BoS). But he wouldn't really own the shares and would be fully answerable in law to the person who does. If the shares are sold the beneficial owner would put them on his CGT tax retrun and the nominee wouldn't

So getting back to boats, the registered title is a record of the legal title holder aka legal owner and has no means of or intention to record any underlying beneficial owners. My boats are for example recorded on part 1 registry under the name of a company but it is a mere nominee for me and i have a separate trust deed (invisible to outsiders) that says I am the beneficial owner. The ship's registry cannot know about beneficial owners and that is why there is the disclaimer on the certificate. What they are really saying is that "this certificate proves legal title but we don't know if that title is held in trust and if there is an underlying beneficial owner"

None of this is really a problem but I really dont have time to write loads more. Perhaps worth adding that when a boat is sold the contract operates to transfer beneficial ownership and the delivery of the BoS (if the boat is registered) serves to transfer legal title. Hence both must be got right

Now you might ask how a buyer can ever know if he is getting beneficial ownership, becuase there might be a hidden beenficial owner. That's true but it's not as risky as it sounds. Buyer will get legal title, via BoS, and if an underlying beneficial owner then appears and claims beneficial ownership under a new constructuve trust he will making an equitable claim and you can only come to equity if you have clean hands. If he is genuinely innocent he might have a claim, but it is virtually impossible that would ever happen in the world of boats. no-one gives legal title to their boat to a trustee who would then fruadulently sell it without even telling the beneficial owner. Lots of people give title to a trustee/nominee controlled by them. So dont worry about this one

I have to go, gotta leave for plane to France at 4pm. you could write pages and pages on this but it isn't a big bone of contention and I do not want to create urban myths. The above is typed quickly and isn't perfect - it's a complex topic

 

[jonic]

It seems to me that the boat brokerage industry is a shambles. There is NO protection for a client against a broker doing a runner (for want of a better phrase) with a client's money. If this happens then there is virtually no chance that the client will ever see their money again because there is no compensation scheme in place to reimburse the client in the event of broker wrongdoing. All the broker has to do to avoid prosecution is to say they borrowed money from a client account and meant to pay it back. FFS!!!!!!

The vast majority of people in the recent poll on another thread said they thought there was some risk for the client when dealing with a broker. WAKE UP brokers! Your clients don't trust you! And why should they? Get a proper compensation scheme in place for your clients. Solicitors have such a scheme in place. Why haven't you?

I read an argument against the need for a compensation scheme because apparently solicitors need a compensation scheme because they regularly steal client's money. The implied assumption is that boat brokers are pillars of society who can be trusted more than solicitors and the proof of that is that brokers don't have a compensation scheme for their clients. Pull the other one.

The way things stand I see boat brokerage becoming an increasingly difficult way of earning a living. People are increasingly more savvy and are increasingly turning away from brokers to market and sell their own boats. Look at the number of websites springing up to do just that. Is it any wonder when the industry continues to bury its head in the sand?

I despair. Literally.

Turning away from brokers and straight into all the pitfalls and scams that private individuals pull? That they even try to pull on me?

Private sales making a TOTAL HASH of the documentation? I see that EVERY DAY.

A favourite mistake in a private sale is to cross out the entire clause on the Bill of Sale that underpins the transfer!

That's a shambles.

Brokers are regulated by the laws of business

There is also an additional code of conduct for ABYA members

Client accounts are required for ABYA members

If the Government chose to add further legislation on top. I and, I am sure every one else worth their salt would sign up to it.

You make it sound so unlike the reality of every day life in a professional office.

You make it sound like brokers would oppose more legislation. They wouldn't.
We already do it voluntarily.

We would abhor and oppose any broker that committed any wrong doing.

But it is not an unregulated shambles

I have had enough. I'm out. .....again.

 

[jonic]

No worries jonic! Problem with lawyers, ahem, is that while some of them are really very excellent a certain percentage are mediocre. We had for example a solicitor on the VAT thread who arranged a VAT payment in the UK without realising it didn't extinguish a VAT liability in Spain. Jeeze. Let's not get into a debate as to the aforementioned percentage but it begins with an 8 or a 9, very much imho!

Part 1 reg proves title, not ownership. It's very hard to explain differnce in a thread on here; better done over a beer. The tricky part is English law (and anglo saxon law generally) recognises the trust concept, so we have beneficial ownership on the one hand and legal ownership aka title on the other

Most chattels are owned benefically and legally by their owners, and there is no need to distingusih between legal and beneficial ownership, and generally there is no point. With registered or similar assets however (land, boats, company shares, bank accounts, etc) you can distinguish and peoplle often do. Now people, often unwittingly, mean beneficial ownership when they say they own something but it is important to undersntad the distinction esp when dealing with registered property like boats. In anglo saxon legal jurisdictions it is perfectly possible to own something beneficially without being the registered owner. It is very common for example for company shares to be registered in the name of an owner who is in fact a trustee or nominee for someone else. The registered owner would appear in the records of the company, receive the dividend cheque, have the rigth to vote, and if the shares were sold would be the person who signs the bill of sale (which is called a "stock transfer form" in the case of a company but its exactly same as a BoS). But he wouldn't really own the shares and would be fully answerable in law to the person who does. If the shares are sold the beneficial owner would put them on his CGT tax retrun and the nominee wouldn't

So getting back to boats, the registered title is a record of the legal title holder aka legal owner and has no means of or intention to record any underlying beneficial owners. My boats are for example recorded on part 1 registry under the name of a company but it is a mere nominee for me and i have a separate trust deed (invisible to outsiders) that says I am the beneficial owner. The ship's registry cannot know about beneficial owners and that is why there is the disclaimer on the certificate. What they are really saying is that "this certificate proves legal title but we don't know if that title is held in trust and if there is an underlying beneficial owner"

None of this is really a problem but I really dont have time to write loads more. Perhaps worth adding that when a boat is sold the contract operates to transfer beneficial ownership and the delivery of the BoS (if the boat is registered) serves to transfer legal title. Hence both must be got right

Now you might ask how a buyer can ever know if he is getting beneficial ownership, becuase there might be a hidden beenficial owner. That's true but it's not as risky as it sounds. Buyer will get legal title, via BoS, and if an underlying beneficial owner then appears and claims beneficial ownership under a new constructuve trust he will making an equitable claim and you can only come to equity if you have clean hands. If he is genuinely innocent he might have a claim, but it is virtually impossible that would ever happen in the world of boats. no-one gives legal title to their boat to a trustee who would then fruadulently sell it without even telling the beneficial owner. Lots of people give title to a trustee/nominee controlled by them. So dont worry about this one

I have to go, gotta leave for plane to France at 4pm. you could write pages and pages on this but it isn't a big bone of contention and I do not want to create urban myths. The above is typed quickly and isn't perfect - it's a complex topic

I'm back in again already

Thanks JFM

I would definitely stand you a beer next time you on the south coast.