Pulling out of a sale post survey..can I?

[Canopy Locked]

The broker refuses to allow a full survey prior to an offer being accepted (quoted BMF rules).

The boat is 750 miles from me and looks in need of TLC.

I've arranged a surveyor to inspect the boat tomorrow, as if he was a private buyer and report a list of specific issues, plus a general idea of whether the look of the boat is cosmetic or more deep seated.

Now my question is, if I make an offer and it's accepted - subject to survey - pay the broker a depoist and the surveyors report contains things I'm not happy with, can I walk away and have my deposit returned?

If the deposit is non refundable, why cannot I have a full survey 1st?

 

[Ripster]

Most reputable brokers use an RYA style agreement which you can see and read on line. But you can make any clause you like to pull out provided its in any the agreement with the broker/seller and they agree. So if you get the agreement through, read it and make any adjustments you feel should be there and get it agreed, then pay your deposit subject to this, you should be OK. I have done this on every boat I have bought. Only ever pulled out of one though, without any bother. I am sure there will be lots more advice coming...!

Good luck.

 

[benjenbav]

Rob - You can contract on whatever terms you agree. The standard BMF sale contract does, I think, require you to sign contract, then get survey and then you can only get out if the contract shows up a material defect which the seller can't or won't put right.

But there's no law that says you have to enter into this form of contract and if you want to be under no obligation until you have had the survey report then you can insist on not signing a contract until you've got what you want.

Of course, the seller may refuse to treat with you on this basis. But that's another matter.

 

[Tranona]

The basic principle is that your survey is your way of satisfying yourself that the boat is as described by the seller. Your offer is made on the basis of the particulars provided by the seller. If the survey shows that there are material differences that are not declared in the particulars nor obvious from a visual inspection then you have every right to re-negotiate the price or walk away if you are unable to come to a satisfactory agreement with the seller. You are, of course responsible for any costs such as haul out, but the balance of your deposit should be returned. Make sure you are clear about the terms of the contract you are signing.

Getting a knowledgeable person to inspect the boat is a good idea, particularly if it is a "project" as this will help you set your offer. However, you still need the formal survey as this is protection against buying a dog - the surveyor has a professional responsibility to look after your interests.

Hope this helps.

 

[gjgm]

You can make any t+c you like, though you have to get them agreed to actually get anywhere!
The broker isnt selling the boat;he is the broker, so he should ask the seller if a survey without an offer is acceptable. Any sensible seller would say yes, I would say,after all, he can be as stubborn as he likes, and you are the one with outgoings. The deposit and offer concept is to offer commitment to BOTH sides-- after all you dont want to have expenses and find the boat has been sold elsewhere. If you are prepared to take that risk, well, why not?
Still, if that route isnt open to you, then as you say, you can make an offer subject to survey, and then either ask for repairs/price adjustment is reasonable, or the deal falls, and your deposit is returned. Of course, the more professional the broker, the quicker you get your money back. On the other hand, 10% is just a common number, you can offer a smaller deposit, or no deposit. You just need agreement all round.
The possible sticking point is where the survey turns up something that would be reasonable for that particular boat; in theory you cant then justify changing the deal and the other parties maybe unhelpful at returning the deposit ie they ve lost other parties/broker has new expenses etc etc.
One thing I would suggest though, given the distance, is to see all paperwork, or copies of it before you pay any deposit. And dont fall for the usual crud like the seller is on hols,its in the post.. it can be very hard to get these docs once your money is in someone elses hands

 

[Nick_H]

I've never bought using an un-modified ABYA contract, as I don't want to be arguing about what constitutes a "material" defect if i'm not happy after the survey. I can't see the seller/broker has anything to lose by allowing the survey unless they know the boat is a dog.

Having said that, why would you want to have a survey before having an offer accepted, what if it passes with flying colours and you then can't agree on the price?

 

[FunkyMonkey]

my experiance with my last purchase was...The boat was in Spain and i was in the uk so the owner had to fly out to meet me and the surveyor there. the owner had to organise flights and accommodation for himself and therefore didn’t want to fly out and have me say, no thanks as the price was right anyway. I made an offer subject to survey and had to place a deposit over the phone before visiting the boat, i had the survey carried and was happy with its condition and the offer held, i had already checked out the brokerage and checked them out including credit check in advance (i know its not 100% but it helped me relax).

You are fully entitled to your deposit back if you write some terms and conditions into your offer; ie "subject to a satisfactory valuation" but it will be down to the company holding the deposit as they may well have there own terms and conditions of the offer for you to sign.

To be honest i didnt actually ask to carry out the survey before i placed the offer and therefore didnt ask the question....but as i mentioned the price was right for the boat so i knew i had to move fast.

 

[Imperial One]

The broker refuses to allow a full survey prior to an offer being accepted (quoted BMF rules).

The boat is 750 miles from me and looks in need of TLC.

I've arranged a surveyor to inspect the boat tomorrow, as if he was a private buyer and report a list of specific issues, plus a general idea of whether the look of the boat is cosmetic or more deep seated.

Now my question is, if I make an offer and it's accepted - subject to survey - pay the broker a depoist and the surveyors report contains things I'm not happy with, can I walk away and have my deposit returned?

If the deposit is non refundable, why cannot I have a full survey 1st?

Your deposit is refundable.

Most brokers would try to get a standard contract signed pre survey.
BUT if it is important to you to have a survey pe contract then I cannot see why the broker would not ask the owner if this was OK.
It would all be at your expense and at the very worst would show any defects to the owner in order for him to address them pre sale or pitch the cost of the boat accordingly.

It is an unusual way of going about it but not unheard of.
A standard BMF/RYA approved contract states -

5.Defects
5.1.If the inspection, survey or sea trial reveals any defect in the Vessel, its machinery, gear or equipment which was not disclosed to the Purchaser in writing prior to the signing of this Agreement, or if there are any deficiencies in the inventory prepared and attached to this Agreement, for which the aggregate cost of rectification by a competent and reputable shipyard or replacements (on a like for like basis, discounted to second hand prices) is collectively equal to or exceeds [5]1% of the purchase price then the Purchaser may give written notice to the Seller or the Broker within 7 days of completion of the inspection, survey and sea trial, whichever is the later, specifying the defects and/or deficiencies and including a copy of all relevant extracts from a surveyor’s or adviser’s report, and either:
5.1.1.reject the Vessel, or
5.1.2.require the Seller to make good the defects and/or deficiencies or make a sufficient reduction in the purchase price to enable the Purchaser to do so. In this case all agreed items of work shall be completed without undue delay and shall be carried out to the express requirements contained in the Notice served by the Purchaser.
For the purposes of this Clause 5.1 and Clause 6.1.2 "completion of survey" shall mean the date of receipt by the Purchaser of a written or emailed survey report.

This is of course open to variation by agreement but shoud cover you in most situations I have encountered.

Hope this helps.

Mike.

 

[Nick_H]

Your deposit is refundable.

Most brokers would try to get a standard contract signed pre survey.
BUT if it is important to you to have a survey pe contract then I cannot see why the broker would not ask the owner if this was OK.
It would all be at your expense and at the very worst would show any defects to the owner in order for him to address them pre sale or pitch the cost of the boat accordingly.

It is an unusual way of going about it but not unheard of.
A standard BMF/RYA approved contract states -

5.Defects
5.1.If the inspection, survey or sea trial reveals any defect in the Vessel, its machinery, gear or equipment which was not disclosed to the Purchaser in writing prior to the signing of this Agreement, or if there are any deficiencies in the inventory prepared and attached to this Agreement, for which the aggregate cost of rectification by a competent and reputable shipyard or replacements (on a like for like basis, discounted to second hand prices) is collectively equal to or exceeds [5]1% of the purchase price then the Purchaser may give written notice to the Seller or the Broker within 7 days of completion of the inspection, survey and sea trial, whichever is the later, specifying the defects and/or deficiencies and including a copy of all relevant extracts from a surveyor’s or adviser’s report, and either:
5.1.1.reject the Vessel, or
5.1.2.require the Seller to make good the defects and/or deficiencies or make a sufficient reduction in the purchase price to enable the Purchaser to do so. In this case all agreed items of work shall be completed without undue delay and shall be carried out to the express requirements contained in the Notice served by the Purchaser.
For the purposes of this Clause 5.1 and Clause 6.1.2 "completion of survey" shall mean the date of receipt by the Purchaser of a written or emailed survey report.

This is of course open to variation by agreement but shoud cover you in most situations I have encountered.

Hope this helps.

Mike.

What! You can't reject the boat unless the cost of repairing it (after discounting the cost of the parts??!!) is more than 51% of it's value, and that covers most situations??? You'd have to be stark raving bonkers to sign that.

 

[neale]

What! You can't reject the boat unless the cost of repairing it (after discounting the cost of the parts??!!) is more than 51% of it's value, and that covers most situations??? You'd have to be stark raving bonkers to sign that.

I think that is either supposed to be 5 or 1% but def not 51%

 

[Imperial One]

No NIck,

You are wrong in your reading but perhaps helped by the fact that the cut and paste facility on my Mac into the forum page allowed the small 1 which was a note to be a full sized 1.

Hence the misunderstanding, despite the brackets of 51%.

The extract from the template document says -
...........equal to or exceeds [5]1% of the purchase price............

The 1 refers to a note that allows the broker (or whoever) to put in whatever figure you wish to agree on.
It is typically five percent which I feel is more than enough.

For clarity the note on the contract template states -

5% will not always be an appropriate figure and the point should be negotiated between the Parties prior to signing


Mike.

 

[Canopy Locked]

Gents, many thanks for your comments

I'll see what the initial report says.

It's not a project boat, just one that is quite old (26yr) and hopefully needs just a damm good clean.... but there is potential for a big refit job (cockpit decks, ect), so I'll see what the surveyor says initially.

the paper work question is one that I'm going to push a bit...... the boat is advertised as an 84. The broker has told me (nothing in writing of course) that it's actually 87, but the owner has no Vat paperwork - he was a cash man - and he's had it from new.

Now, to be honest, I'm not too worried about HMRC investiagting a 20+ year old boat.. but I reckon I might be able to use this to push the seller / broker somehow.

Ahh... the games' afoot!

 

[Sneds]

I can think of no reason why a broker, or especially the owner, would not want you to or allow you to have a survey carried out prior to paying a deposit.
It is afterall, at your expense.
I would walk and tell them why, the owner may not even be aware?
Does it matter what the BMF "rules" say? Comen sense should prevail.
I would be very nervous about handing over my money to this broker, how hard will it be for you to get him to return it if he he being so unreasonable at this stage?
There are plenty of boats for sale - find another!

Good luck

Cheers
,

 

[pheran]

No NIck,



5% will not always be an appropriate figure and the point should be negotiated between the Parties prior to signing


Mike.

That para is very much along the lines of the standard Dutch (HISWA) contract although the 'rejection' level is typically 2% of the purchase price. So the process goes
- seller declares material defects
- buyer makes offer taking these (and any other factors) into account
- contract to sell/buy signed by both parties. Deposit paid
- survey
- renegotiation on price to take account of any fresh material defects found
up to 2% limit. Or seller makes arrangements to have defects fixed at his
cost to buyers satisfaction.
- Either balance paid or if 2% will be exceeded, contract is voided and deposit
refunded.

The cost of any defect that is deemed to be an improvement eg replacement of batteries is normally split between buyer and seller.

Bought my last two boats(and sold two as well) under these arrangements and it all worked brilliantly.

ps monies not normally paid to broker but to an independent Notary. Much safer!

 

[Richard10002]

The seller has nothing to lose by allowing you to have a survey prior to making your offer. You have the costs of the survey and any lift or whatever.

The broker is crazy to resist your request, and you should wonder why with a suspicious mind.

Can you contact the owner direct?

 

[PCUK]

The deposit shows you are not a time waster and ensures that you cover all the costs. It could be even more difficult to get the costs back from you if you rejected the boat. I wouldn't deal on the basis of no deposit prior to survey. Deposit first is the normal accepted method of progressing a sale.

 

[pheran]

The deposit shows you are not a time waster and ensures that you cover all the costs.

It also secures the buyers rights, in particular that the vendor cannot accept a higher offer from a third party after the buyer has already incurred costs eg on a survey. Any decent contract will also have dates by which the individual actions have to be carried out eg survey by xx/xx/xx, payment of balance by dd/dd/dd etc.

 

[kcrane]

The deposit shows you are not a time waster and ensures that you cover all the costs. It could be even more difficult to get the costs back from you if you rejected the boat.

In the example the OP has given what are these costs that need to be covered?

The OP is going to pay to lift the boat and have a survey done. If the buyer is willing to do that surely there isn't a good reason for the seller to say no.

 

[Nautibusiness]

Hiya Rob

Tom here (Poole Tom, we've spoken before).
What are you hoping to buy?
Good luck with it regardless of how you go about the process.

Listen to the likes of ImperialOne and those offering rational reasons for needing a deposit first.

It is fair and right that you pay a deposit first, but as ImperialOne has explained, your deposit is safe.

Your surveyor WILL find some snags and faults. At the end of the day, ask a surveyor to look at a brand new boat and they'll find snags and offer recommendations, but you are hoping he doesn't find anything serious.
At the end of the day, you are literally hoping to have thrown the money away on the surveyor. If, however a big problem is found then it's cost you nothing but his fees.

If the boat is essentially in good condition, but needs a bulb here and a scuff touched up there then it would be rather unreasonable for you to pull out (but you still can, *less reasonable costs).
If the boat has a major structural or engineering issue or that the list of snags rolls into the ridiculous then you will be pretty much expected to either pull our or renegotiate.
If you renegotiate, rather than get money off the price and fix it later, why not get the boat fixed (at the vendors expense), but get the repair done by your choice of engineer, not theirs.

I mentioned *less reasonable costs.
It's possible the broker may retain some costs if you choose to pull out for the smallest of reasons. Usually if you the buyer has done everything you can to get the sale to proceed then it's unlikely that any costs will come out of your deposit.
In the unlikely event that you pulled out for a very minor reason or a reason that was abundantly obvious when you first viewed or offered on the boat then he might retain what costs he or others involved in the sale may have incurred. I can't think of anything at the moment, but I have only ever retained "costs" once in my career and that was when a boat had an offer taken on it at the start of the season and the sale took through to mid summer to be ready to complete (the buyer asked for many many items to be done by the vendor all of which he agreed to and incurred many unnecessary costs doing only to reject the boat as he didn't like the access to the bow - which he had seen on his very first viewing and the subsequent half dozen or so visits).
In this instance a small percentage of the deposit was retained on all parties agreement.

Where is the boat you hope to buy lying?

Tom

 

[Philiz]

I've arranged a surveyor to inspect the boat tomorrow, as if he was a private buyer and report a list of specific issues, plus a general idea of whether the look of the boat is cosmetic or more deep seated.

Mmm, that sounds a bit on the devious side to me and I'm surprised a qualified surveyor is prepared to work on that basis.

If a potential buyer had a survey carried out on a boat I was selling without my permission I'd be none too pleased with the buyer or the surveyor!

Doesn't exactly build trust between the 2 parties either.

Still, it's probably gone ahead by now, so what's the outcome?