Problems with buyer

[fjweaver]

In November we agreed a price to sell subject to survey (private sale). There were a couple of points on the survey meant that we agreed to pay for the work to be done once we received a deposit. That was all fine & the work has been done.

We're now at the final stages but the buyer only wants to pay 50% of the outstanding price now - followed by the other 50% when the boat arrives at the destination.
The reason being is so that he can make sure that the boat (22ft) is seaworthy & the engine is ok. He says you wouldn't buy a car without testing it first but I said that's what the surveyor's for and that's just how things are done with boats.

The chap is a novice and has lined up a skipper to sail it from Southampton round to St Catherine's dock (!).

The dealings so far have been fine but I can see this becoming an issue. I have to accept that he might decide to pull out as I don't want the boat to go without full payment.

I don't think I'm being unreasonable but in a way I can also see his point. Where do we stand with regards the deposit as we have had to pay for work + hardstanding while the deal has been going on.

I'd really appreciate any help/advice

thanks
Frank

 

[iangrant]

DO NOT let the boat go without full payment. What have you got in writing?

 

[fjweaver]

I've got all the e-mail communication from the first contact. The sale was agreed subject to survey - and we agreed that there were 2 things that should be done.
Following that we agreed that the sale would be concluded by the end of January at the latest - and after that he would incur any hardsatnding charges etc.

 

[iangrant]

"The sale was agreed subject to survey - and we agreed that there were 2 things that should be done."

I would say that you are in a strong position - don't let the boat go without full payment - give the buyer reasonable time to complete the sale, looks like he is in breach of contract - if he doesn't come up with the money sell the boat to someone else. I think you will be withing your rights to keep the deposit (possesion is 9/10ths)

Perhaps a legal chap could jump in here - if not a quick consultation with a solicitor may be worthwhile.

I hate people who mess you about. I sold a volvo car once and the twit came back again and again - how do I turn the lights on, the radio crackles etc....

Ian

 

[AndrewB]

Normal practice ...

... in the UK on a private sale is 10% deposit on agreement to buy, subject to survey and sea trial; followed by the residual when these have been completed, with possible minor adjustments in the light of the surveyors report. Both survey and sea trial are normally at the purchaser's expense (e.g. if the boat has to be lifted in/out the water). The purchase is concluded with a Bill of Sale and final payment, when possession of the yacht is formally passed to the purchaser.

There is an excellent RYA booklet on buying and selling used yachts, pity you didn't take a look because it lays out all the steps, suggested timetable and a model contract if you want to be really formal.

What the buyer is proposing is definitely not normal, and its a bit odd that he is setting new conditions at this stage. I would be cautious, as private sales must rely on some element of trust, and one hears of a certain amount of fraud that takes place in private boat sales, specially with smallish boats.

If the reason really is that he wants a sea trial, I would offer it assuming you think he is serious, but pointing out it is normal for you to retain possession until full payment is made. It may be the problem is the buyer lives some way away and has doubts about handing over all the dosh to you until the yacht is firmly in his possession. If you are tempted to follow his proposal, I would at least require that the balance is deposited with an independent solicitor so you know it is there, and ensure it will be released to you on arrival.

That having been said, I had to do exactly the same with my own first major purchase of a small yacht, as I hit unexpected problems scraping the money together. An understanding seller let me have the yacht for three months prior to getting the final payment.

 

[broadnorfolk]

> He says you wouldn't buy a car without testing it first

So it's been surveyed, he's paid a deposit, you've done repairs and are about to complete the sale, but he hasn't actually been out on it? Bizarre.

Tell him to get an engineer in to do an engine trial - afaik surveyors don't normally touch the engine (except to see if there is one).

 

[tcm]

Re: Normal practice ...

agreed.

A positive point is that he's got a "professional skipper" to take the boat round to St Kat's. Refer the buyer to his skipper, or others in the know. The boat should not leave until paid for in full imho.

But I'm not a solicitor.

 

[david_e]

You have been more than tolerant so far with this smart alec and you have met your side of the bargain. With immediate effect, do not communicate with him in any way until Jan 28. Ignore all calls, emails, post etc - get people to say you are ill or whatever and that the boat is sold. They must not mention who to.

With the thought of his deposit disapearing over the horizon he will soon cough up.

 

[chriscallender]

If he wants to make analogies to buying a car, then ask him to find a car seller, private or trade that would let him drive off in a car having paid only 50% of the purchase price, so that he could "check the engine was OK and it was roadworthy".

He could presumably have arranged for a sea trial before agreeing to purchase (launching at his cost of course, if it was out of the water and needed lifting in/out).

Now the only options he should be given are to pay 100% before taking the boat, or loose his deposit.


Chris

 

[bedouin]

Excellent advice. Then he would have a good argument that you were in breach of contract, and so he would be entitled to his deposit back as well as being able to sue you for the cost of the survey and any other out of pocket expenses.

 

[FlyingSpud]

As always the question to be determined is what the contract was, and without seeing all of the communication between you, it is impossible for anyone to say I am afraid. Was it all just e-mails?

The other pertinent question is how much money are we talking about here, as that will often drive the tactics if not the law.

 

[fjweaver]

The agreed price was £7750 after the survey providing we met the costs of the work required & we received £750 deposit. the work carried out was £360 & the hardstanding costs since his first offer was accepted is probably about £350. He also originally agreed to a quck sale - 3 months seems to be dragging on a bit.
All communications have been via e-mail - including my recipt of deposit.

 

[broadnorfolk]

Begins to sound like he's trying to wriggle out of it by setting conditions he knows you won't meet.

Also, if he pays you 50% and takes the boat away, who will own it on the way round the coast? - ie who is insuring it on its way to London?

I think you have to consider walking away - even if you have to give back the deposit - at least you remove the risk of losing half the boat price - especially given that you have only ever dealt with this person via email. No yacht broker will let a boat go until cheque for the full amount has cleared.

 

[FlyingSpud]

If (and it is a big if, I suggest you run it by a local solicitor) you are satisfied the terms of the contract are clear (and remember that you may have to persuade a Judge – so avoid wishful thinking if doing it yourself) and that there is no doubt he must complete, then note that time is not of the essence in a contract, so you have to set down a fixed time by which he must complete. Once he fails then, assuming the contract is clear and he has failed to complete, you would be entitled to consider him in breach. You must however give him reasonable notice and it must be in writing and leave no doubt as to when he is to complete the purchase

 

[NDG]

I can't see that you are being unreasonable in asking for full payment now, before the boat goes anywhere. If he wanted to arrange 'special' payment terms, based around delivery, he should have stipulated this when you agreed the price.

Presumably as the yacht has been surveyed there cannot be any serious doubts as to whether it is "seaworthy" or not? What would you do if the yacht mysteriously disappears with its delivery skipper on board when he still owes you half the dosh? Its easy for me to say, but I think you should dig your heels in.

 

[pvb]

Clear communications...

I'm not sure whether our courts are too trusting of e-mail communications. It would be well worth writing to the purchaser and sending it by "Signed for" mail.

Whatever happens, don't release the boat without 100% of your money.

 

[Sybarite]

I believe a valid contract is in place because :

You have agreed the "thing"
You have agreed the "price" and the exchange of the deposit money at 10% confirms the details in the e-mail although these on their own might otherwise require further substantiation.
You have fixed the end of January as the completion date after which there are financial consequences.

A test sail should only confirm that everything is working in a manner compatible with the wear and tear of the original asset - sailing characteristics do not enter into the deal because this would be a new subjective element.

If this matter becomes a make or break element in the deal and you are anxious to come to an agreement you could ask him to pay the balance of the money into an escrow account to be held say by your solicitor until certain very specific conditions ( to be agreed between you) are seen to be met. Given the new aspect he should agree to pay any related legal costs.

However as I said I think you have already satisfied your side of the contract.

Good luck.

 

[Observer]

Some observations

1. There's nothing wrong with "just e-mails". It's a hell of a lot better than "just orals". Provided, of course, there's nothing in any of them which points to terms other than those you've indicated.

2. If you agreed a latest date for completion, you have to allow your buyer that long to complete. If he fails to do so, you can put him on notice to complete within a further "reasonable" time. You should state that you will hold him in breach if he fails to do so.

3. Unless it was stated to the contrary in your e-mails, ownership may have already passed to your buyer. You should always stipulate, in writing, that title transfers on receipt of full payment. Risk of loss has also probably transferred to him (so I hope he's insured).

4. Unless provided in the contract (which is probably not the case from what you've described) the deposit does not "belong" to you if your buyer pulls out. As generally applies, you have duty to mitigate your loss which, for practical purposes, means finding another buyer. If you sell to another buyer at the same price, you will be obliged to return the deposit. If less, you could, as practical matter, apply the deposit against the shortfall and the additional hardstanding costs.

5. The "50% now, 50% on arrival" term he is seeking to add is not reasonable and you should not agree to it. You have to ask yourself "What happens if the boat doesn't arrive". Don't even concede depositing it with a solicitor (who wouldn't take it anyway without a formal escrow agreement and that's just not worth getting into).

6. You can offer a sea trial but, at this stage, it would be a concession on your part (unless it's mentioned in the e-mails). Again, what would happen if the boat broke down during the trial? Or suppose he trumps up a "defect" and tries to avoid completing because of it? Or tries to make you pay for more repairs. If he's had a survey and that's all you mutually agreed, that's all he's entitled to.

How you act now should really depend on how important it is to you to complete the sale. If it is important and you think it's unlikely you will find another buyer easily, or at the same price, and you are confident that a sea trial will not throw upon anything untoward, you could offer that but agree in advance, in writing or by e-mail, EXACTLY what will happen after it - e.g. he will pay the full balance within X days and "accept" delivery of the boat immediately thereafter.

If you're relaxed about losing this buyer, stick to the terms agreed - no sea trial if not previously agreed.

In any event, you do need to get on with something because, as I mentioned above, you might be in a bit of limbo on title and risk anyway.

 

[wishbone]

I seem to remember a similar case on the radio (Eagle Beagle). If the agreed contract deviates, ie goal post’s moved you a quite right to hold your ground, if the time limit’s have been extended by the buyer causing more cost to you, you could sue for breach of contract and make a claim, providing you have kept to your end of the bargain, and done everything possible to make the sale go through.

Wishbone
I would DEFINATLY not let the boat LEAVE SITE OR MOVE until paid for in full as agreed terms of contract.

We lost our full deposit on a deal because we changed our minds, ho hum! But that was our choice....

 

[Joe_Cole]

I think that everybody has reached a consensus on this. Why don't you E mail a link to this thread to your buyer?

Joe