POLL- Do you trust your money with a yacht Broker

[PaulGooch]

I cant recall..as a buyer, do you pay the balance direct to the seller, or to the broker who "exchanges" docs and monies? If to the broker, then as a buyer are you not exposed to the broker running off with that balance?

When we bought the current boat, we viewed in Cardiff one weekend. Monday i phoned and made an offer, which the broker duly put to the vendor, who said he'd accept another £1k, we accepted his counter offer. We paid a deposit into the brokers "client account". When the documentation was complete, later that week, we paid the balance into the same account. The following Tuesday, we went back to Cardiff, completed the handover and watched the boat get loaded onto transport.

Based on that i would say that all of the money was at risk for 3 or 4 days. It was technically possible that the account i paid into on Friday was not properly set up and the broker might have gone bust on the Monday.

At some point, early in the proceedings, the broker supplied me with a copy of a letter from the bank stating that the account in question was a "client account". I forget the exact wording and don't remember if they emailed it to me or sent it by post.

Although i think the "system" has room for improvement, the particular broker i used (Network Yacht Brokers) were thoroughly pleasant to deal with and i was very happy with the job that they done. Just a pity someone didn't check the batteries before we drove all the way to Cardiff, then we wouldn't have had to spend the night in a hotel, so the engine could be jump started Sunday morning

 

[Whitelighter]

It is worth noting that of the 5 who reckon its only a small risk and they are happy, two are Jonic and Boatshedfalmouth

 

[DAKA]

I voted yes, with 3 transactions with the same broker, I trust him.

I have actually gained enough from Jonic's posts to enable me to trust him/his company with the value of my boat however that doesnt mean I would answer yes in the poll as there are other dodgy organisations/individuals in the UK perhaps being released from Her majesty's custody this morning that can set up this afternoon and trade legally as 'Yacht Brokers' holding your £100 k in Kray n Kray Yacht Broker 's clients account .

 

[Resolution]

Trust?

Many different types of transactions require a degree of trust or goodwilll between the parties. After reading threads such as this, one becomes aware that there is a small number of forumites with whom it would be downright painful to deal on a boat transaction.

 

[DAKA]

Many different types of transactions require a degree of trust or goodwilll between the parties. After reading threads such as this, one becomes aware that there is a small number of forumites with whom it would be downright painful to deal on a boat transaction.

Interesting conclusion...........

My last boat I sold privately and I accepted a personal cheque, I handed over the keys and documents before I even banked the cheque.

 

[Resolution]

Interesting conclusion...........

My last boat I sold privately and I accepted a personal cheque, I handed over the keys and documents before I even banked the cheque.

Daka

Presumably you knew and trusted the buyer then? (And isn't that a nicer, way to do business than to load up with an armoury of lawyers' words? Quicker and cheaper, too.)

 

[Tranona]

As one of those accused of giving (unspecified) misleading information, I am just amazed that some people think that you can turn a complex subject into a simple set of questions. At one level buying and selling boats is "simple" in that the vast majority of transaction go through in text book fashion. On the other hand a small number can be very complex.

Just one example will illustrate this - drawn from the Peters case and which Pete often quotes (correctly) as an example of a person who was clearly "stuffed". This transaction involved two boats with the same person. Peters sold a new boat - not from stock but to be delivered the next year. They took a deposit as is normal. At the same time they agreed a part exchange deal for the client's existing boat as part payment for the new boat. They also took the existing boat on brokerage on the basis that if it sold before the new boat was delivered, the proceeds of the sale would be offset against the final payment on the new boat. Presumably, but it is not clear because it did not happen, there was also an agreement that Peters would take the old boat into stock if it did not sell.

Now the question is - Is this a brokerage transaction, or a dealer transaction? Normally it would not matter if the business does not go bust in the middle. The client thought both his deposit and the proceeds from the sale of his old boat would be held in the client account as promised, but this was a lie (not clear who lied, but it is clear the proceeds were not paid into the correct account).

So, this is not a failure in the operation of the client account, but the failure of the employee to do what he said he was going to do.

I don't know what the client can do to remedy the situation, I am only using this as an example to show that the basic proposition that started this (and many previous threads) that brokers "steal from client accounts when nobody is looking" is far too simplistic - as well as being wrong on the basis of the reported cases of wrongdoing in buying and selling boats.

Invariably when you dig deeper the issue is almost always about "trust" in the everyday sense rather than the legal sense. That is people lying, promising to do something and then not doing it, misrepresenting a situation and so on. Things that are not unique to the boating business, and arguably are less common than in many other types of business.

The straightforward brokerage business such as John's is probably the one type of activity where the opportunities for wrongdoing are least likely. If you wanted to be a crook you would not choose brokerage as your vehicle. If you are incompetent and/or you lie you will be very quickly found out.

On the other hand large complex businesses, particularly when they are controlled by one person seem much more prone to failure through bad practice or unlawful activity. You can see this in many failures where consumers lose out - Courts Furnishers and Farepack are two good examples.

Business models change over time. 20 or 30 years ago, the majority of new boats were built to order in the UK. The big problem then was builders go bust with half built boats. Over time contracts evolved to try and give some protection to buyers in this situation. Now, factory made stock boats sold through intermediaries have a much larger share of the market and buying and selling of existing boats has grown so new forms of business practice evolve.

In my other life I was engaged in a wide range of research into peoples' attitudes and very quickly came to the conclusion that polls were mostly a waste of time once you got away from factual questions. They can be useful in finding general areas of concern or agreement, but to really understand what people think you have to go much deeper than just ticking boxes.

So, there seems to be "concern" at the margins about some of the practices in the boat buying and selling business. However, it is (like many things) subject to an individuals' own experience. Policymakers need to establish if the concern is general. Sometimes it takes a specific event such as the Peters case to highlight specific issues which can be addressed (as they have in part already).

As can already be seen from the posts in this thread there are many positive experiences as well as observations that there is no simple answer.

Such is life.

 

[DAKA]

As one of those accused of giving (unspecified) misleading information, I am just amazed that some people think that you can turn a complex subject into a simple set of questions. At one level buying and selling boats is "simple" in that the vast majority of transaction go through in text book fashion. On the other hand a small number can be very complex.

Just one example will illustrate this - drawn from the Peters case and which Pete often quotes (correctly) as an example of a person who was clearly "stuffed". This transaction involved two boats with the same person. Peters sold a new boat - not from stock but to be delivered the next year. They took a deposit as is normal. At the same time they agreed a part exchange deal for the client's existing boat as part payment for the new boat. They also took the existing boat on brokerage on the basis that if it sold before the new boat was delivered, the proceeds of the sale would be offset against the final payment on the new boat. Presumably, but it is not clear because it did not happen, there was also an agreement that Peters would take the old boat into stock if it did not sell.

Now the question is - Is this a brokerage transaction, or a dealer transaction? Normally it would not matter if the business does not go bust in the middle. The client thought both his deposit and the proceeds from the sale of his old boat would be held in the client account as promised, but this was a lie (not clear who lied, but it is clear the proceeds were not paid into the correct account).

So, this is not a failure in the operation of the client account, but the failure of the employee to do what he said he was going to do.

I don't know what the client can do to remedy the situation, I am only using this as an example to show that the basic proposition that started this (and many previous threads) that brokers "steal from client accounts when nobody is looking" is far too simplistic - as well as being wrong on the basis of the reported cases of wrongdoing in buying and selling boats.

Invariably when you dig deeper the issue is almost always about "trust" in the everyday sense rather than the legal sense. That is people lying, promising to do something and then not doing it, misrepresenting a situation and so on. Things that are not unique to the boating business, and arguably are less common than in many other types of business.

The straightforward brokerage business such as John's is probably the one type of activity where the opportunities for wrongdoing are least likely. If you wanted to be a crook you would not choose brokerage as your vehicle. If you are incompetent and/or you lie you will be very quickly found out.

On the other hand large complex businesses, particularly when they are controlled by one person seem much more prone to failure through bad practice or unlawful activity. You can see this in many failures where consumers lose out - Courts Furnishers and Farepack are two good examples.

Business models change over time. 20 or 30 years ago, the majority of new boats were built to order in the UK. The big problem then was builders go bust with half built boats. Over time contracts evolved to try and give some protection to buyers in this situation. Now, factory made stock boats sold through intermediaries have a much larger share of the market and buying and selling of existing boats has grown so new forms of business practice evolve.

In my other life I was engaged in a wide range of research into peoples' attitudes and very quickly came to the conclusion that polls were mostly a waste of time once you got away from factual questions. They can be useful in finding general areas of concern or agreement, but to really understand what people think you have to go much deeper than just ticking boxes.

So, there seems to be "concern" at the margins about some of the practices in the boat buying and selling business. However, it is (like many things) subject to an individuals' own experience. Policymakers need to establish if the concern is general. Sometimes it takes a specific event such as the Peters case to highlight specific issues which can be addressed (as they have in part already).

As can already be seen from the posts in this thread there are many positive experiences as well as observations that there is no simple answer.

Such is life.

I havent read your response beyond the first sentence.

Your response doesnt appear to be related to this thread.

You have bamboozled the forum with your posts for long enough.

This thread/poll is to ascertain if all your bamboozling has been understood/accepted by the forum or if the forum still feel the system needs urgent attention.

You shouldnt take it personally.
You are welcome to risk your money if you like.

The problem is your continued bamboozling comes across like you are answering on behalf of Yacht Brokers associations and from the above poll you are not doing a very good job of representing them.

Its a bit like me standing in your office foyer dressed in my suit greeting all your customers for you, I havent got a clue what you do, no idea what you pedal for a living and I am sure I wouldnt create the right impression for your business.trust me on that

Please read the poll results, deduct the 5 known yacht brokers answers and your own and accept that joe public has serious anxiety when handing over large sums to unsecured creditors and please stop digging great big holes for the Yacht Brokers associations and honest Brokers to fill after you have finished.


edited as the brokers keep piling in

 

[Ripster]

I sold a car recently, £12k, I didn't fancy waiting for a cheque to clear or taking used notes, we talked through the options, he agreed to order a bank draft from his bank at a branch local to our house, on the day he came to my place, I drove him to the bank, he collected the draft over the counter and handed it to me, I handed him the keys, he drove me home in his new car.

Easy peasy.

Why couldn't that be done with boats?

Did something similar with a more expensive car - £30k Went to buyers bank, sat down with rep - he did a electronic transfer of the funds to my bank while we sat there and confirmed such. Went to my bank after a short time lapse and some coffee and they confirmed the funds were cleared in my account. Handed him the keys - job done - simples.

 

[Tranona]

handing over large sums to unsecured creditors and please stop digging great big holes for the Yacht Brokers associations and honest Brokers to fill after you have finished.

Pete - you really need to get your terminology right! There is nothing in your poll about being "unsecured creditors" - If there was I would be voting Yes. However you cannot become an unsecured creditor of a broker who is using the correct form of client account if you are either a buyer or a seller. You could if you were say a magazine and he had not paid his advertising bill.

That is the whole point of a client account - you DO NOT BECOME A CREDITOR.

It really is rather pointless if after all this time you still have not grasped this fundamental difference.

As I have said over and over again, where people have lost money in the process of buying a boat it is almost always because they have been an unsecured creditor, usually of a limited liability company engaged on its own account in buying and selling boats (or building them for direct sale).

Might I suggest that if you want to promote a new law it should be to force traders to keep deposits and stage payments in a client account or provide a Bank Guarantee against non performance of the contract. Now that would be worth having.

 

[DAKA]

Pete - you really need to get your terminology right! There is nothing in your poll about being "unsecured creditors" - If there was I would be voting Yes. However you cannot become an unsecured creditor of a broker who is using the correct form of client account if you are either a buyer or a seller. You could if you were say a magazine and he had not paid his advertising bill.

That is the whole point of a client account - you DO NOT BECOME A CREDITOR.

It really is rather pointless if after all this time you still have not grasped this fundamental difference.

As I have said over and over again, where people have lost money in the process of buying a boat it is almost always because they have been an unsecured creditor, usually of a limited liability company engaged on its own account in buying and selling boats (or building them for direct sale).

Might I suggest that if you want to promote a new law it should be to force traders to keep deposits and stage payments in a client account or provide a Bank Guarantee against non performance of the contract. Now that would be worth having.

You raise some issues which in my opinion are wrong, very wrong and staring you in the face but I am not going to be drawn on this thread.

This thread is a poll to demonstrate to Yacht Brokers and their associations that their clients are not happy to hand large sums of cash across to them.

I really wish you could see that and stop taking it as some sort of failing on your part that needs to be corrected.

All that needs to be corrected ( by the Yacht Brokers association, not you or I) is a system of boat exchange that is acceptable to their clients .

Can you imagine any other body that would try to tell their clients what they want instead of listening and delivering what their clients actually need.

but thats for another thread, not this one.

 

[jonic]

It is worth noting that of the 5 who reckon its only a small risk and they are happy, two are Jonic and Boatshedfalmouth

Probably because they actually understand how and why it works.

 

[DAKA]

Probably because they actually understand how and why it works.

Well I'm not sure which is most surprising, the fact that 5 Yacht Brokers including yourself have opted to admit there is a risk or that 7% of punters opted to suggest they dont even know there is a risk
You just keep scoring those home goals !
If you found a mine washed up on the beach I get the impression you would kick it to see if it was live

 

[jonic]

Well I'm not sure which is most surprising, the fact that 5 Yacht Brokers including yourself have opted to admit there is a risk or that 7% of punters opted to suggest they dont even know there is a risk
You just keep scoring those home goals !
If you found a mine washed up on the beach I get the impression you would kick it to see if it was live

I've helped write a book too.

Daka you are right, its just too risky to use a professional broker, best sell your boat yourself. Most of us haven't a clue anyway.

You win, everything you say is right. I don't know anything, Well done.


........if anyone ever sees me in the MOBY forum again please remind me that DAKA posts here.

Byeeeee

 

[jfm]

Pete - you really need to get your terminology right! There is nothing in your poll about being "unsecured creditors" - If there was I would be voting Yes. However you cannot become an unsecured creditor of a broker who is using the correct form of client account if you are either a buyer or a seller. You could if you were say a magazine and he had not paid his advertising bill.

That is the whole point of a client account - you DO NOT BECOME A CREDITOR.

It really is rather pointless if after all this time you still have not grasped this fundamental difference.

As I have said over and over again, where people have lost money in the process of buying a boat it is almost always because they have been an unsecured creditor, usually of a limited liability company engaged on its own account in buying and selling boats (or building them for direct sale).

Might I suggest that if you want to promote a new law it should be to force traders to keep deposits and stage payments in a client account or provide a Bank Guarantee against non performance of the contract. Now that would be worth having.

Tranona you're completely right there but it's even worse than you say. Daka is referring to people worried about "handing large sums of money over". The only ones who do that are buyers, and they are not only not unsecured creditors (as you say) but they are not even beneficiaries of the trust that the client account constitutes. With a well written contract title (equitable as a mimnimum, and legal if the broker knows his stuff) to the boat trnasfers to buyer summarily upon payment by buyer of the purchase price to broker (who is seller's agent). This means buyer has none of the risks Daka refers to at all. Only sellers have risk of breach of trust or non-creation of trust. Daka has unfortunately bamboozled buyers into thinking this poll is relevant to them, which it isn't, and people will have voted with buyer's hats on, and so the results are utterly flawed.

 

[jonic]

Daka has unfortunately bamboozled buyers into thinking this poll is relevant to them, which it isn't, and people will have voted with buyer's hats on, and so the results are utterly flawed.

And having now had phone calls about his threads his misinformation is potentially damaging, so I am no longer going to extend their lifespan by posting legitimate and helpful facts.

 

[DAKA]

Tranona you're completely right there but it's even worse than you say. Daka is referring to people worried about "handing large sums of money over". The only ones who do that are buyers, and they are not only not unsecured creditors (as you say) but they are not even beneficiaries of the trust that the client account constitutes. With a well written contract title (equitable as a mimnimum, and legal if the broker knows his stuff) to the boat trnasfers to buyer summarily upon payment by buyer of the purchase price to broker (who is seller's agent). This means buyer has none of the risks Daka refers to at all. Only sellers have risk of breach of trust or non-creation of trust. Daka has unfortunately bamboozled buyers into thinking this poll is relevant to them, which it isn't, and people will have voted with buyer's hats on, and so the results are utterly flawed.

As useful as your contribution and shared knowledge is , it is misplaced on this thread.

Clearly the people who have taken the time to poll dont understand the system.

Like I they just read articles where real boaters loose real money.

The Atkinsons had dealt with BAP as broker in selling their yacht and purchasing a Bavaria 34 yacht. The majority of the funds received from the sale of their yacht were paid into the current account, despite assurances to the contrary made by BAP staff. The Atkinsons also paid a further deposit towards the purchase of the Bavaria 34 but the yacht was not delivered.

The Clarkes entered an agreement to purchase a Bavaria 31 yacht and paid instalments of £28,532 towards the purchase price. Again they were assured that these sums would be paid into the client account, but in fact the money was paid into the current account and the Bavaria 31 was not delivered.


(quoted text, see here for full details)[/QUOTE]


Its a real risk.
The above Brokers who polled accepted there is a risk.
Do they explain the risk to their clients ?

This is the wrong thread.
This thread is clearly to show WE still have concerns.

I am going to do something I rarely do and that is to speak on behalf of the forum...........

Will you please start a thread of your own and explain the risks and how we should avoid them as a buyer and a seller ( I deduce from previous posts of yours that you do not allow a Yacht Broker to hold the value of your boat in his clients account).

Your contributions on this thread are just going to be lost, hence my request for you to start a new one.

 

[yesod]

IDaka you are right, its just too risky to use a professional broker, best sell your boat yourself. Most of us haven't a clue anyway.

he's been touting felix for years.....

 

[jfm]

Will you please start a thread of your own

It feels to me pointless to do that becuase on topics like this if you write something you get replies from posters who do understnad and then heavy replies from those who don't, and the whole thread becomes a mix of correct stuff and BS. Like the VAT thread currently running

All I've said on this thread is that buyers and sellers are in different risk positions and it's wrong to treat them the same in this poll.

1. Buyers are the ones who hand over money and as I've explained above have no risk as creditors or as beneficiaries of a trust (except the deposit element, but the trick is to keep that small).

2. Sellers are the ones on whose behalf brokers hold money so only they can suffer as unsec creditors (in the absence of a trust account) or as victims of a plundering of trust moneys (rare but possible) or a failure hamfistedly or dishonestly even to create the trust (a la Peters). So sellers need to think about all this. They may fully trust their broker and that's all fine becuase nearly all transactions operate glitch free. If they have concerns I've already explained that if they simply put their physical boat into the trust and not the actual cash then they have cracked it, such a simple concept, but no-one does it FFS.

So I'm past caring, but don't expect me to agree we need new laws when (a) buyers don't even have a problem to begin with, and (b) there is a perfectly good solution for worried sellers that needs no new laws but they haven't adopted it. Really, the very last thing that is appropriate here is any new law. Or thread!

 

[Tranona]

Thanks JFM for that input - everything I have been trying to say for what seems almost forever, but some people don't want to hear it, preferring their own distorted account of what is going on.

I have no vested interest in this being neither a broker, nor a buyer/seller at this point. However, I have been heavily involved in the boat building trade in the past and seen the problems from both sides. In my view there are still measures that could be taken to make new boat buying more secure, as this is where most of the problems lie, particularly when there are complex deals such as the Bavaria sale that Pete uses as an example. However, the mechanisms are available for individuals to protect themselves - just that in the excitement of buying a new boat some people seem to be more interested in the colour of the curtains than in understanding the contracts they are signing.