Rogue Dealers, How do we know?

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cliffdale

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Does anyone know how to find out whether a dealer is about to go down? Over the years on this forum, there has been plenty of close shaves and some losses.

Example.

If I sold my boat through a broker, signed the appropriate documents but the broker went down having taken the buyers money. Who owns the boat?

Like wise when buying!

Is there a way to protect ourselves?
 
cliffdale said:
Does anyone know how to find out whether a dealer is about to go down? Over the years on this forum, there has been plenty of close shaves and some losses.

Example.

If I sold my boat through a broker, signed the appropriate documents but the broker went down having taken the buyers money. Who owns the boat?

Like wise when buying!

Is there a way to protect ourselves?
Click to expand...

When I bought my boat last year, the deposit and the outstanding balance was held in an escrow account. In theory the money was safe -So too was the boat, i.e. it wasn't my boat till the money had cleared and the contractual stuff had been taken care of.
 
Rogue Dealers

Make sure you make a cheque out to a dealers 'Client Account' rather than just to the company name.
If they are BMF members and in the BRBA they have to declare all their account info and set up to the BMF - so you are about as safe as you can be by dealing with one of these companies.
 
Dunn and Bradstreet

I do a lot of engineering projects and sometimes we suspect companies are getting a bit wobbly and want reassurance before placing major orders on them.

There are organisations that will do a financial check on companies for a fee. One of the better known is Dunn and Bradstreet. There are many others.

Not sure if they can do the business on a yacht agency but it may be worth asking before indulging them with significant lumps of your money.

No connection but it has proven worthwhile on occasions and proven a good way of understanding risks on others. Sometimes we still gave them the order but no money up front or paid until we had something we could take title on in lieu of it.
 
I can hardly believe I am saying this, but one of the best ways to protect your money is probably to use a solicitor to look after it until the transaction has gone through, thus keeping the Agency out of the financial transaction. The Legal profession is far more tightly regulated than the Marine Industry and there are severe sanctions for playing fast and loose with client's money. Additionally, solicitors' client accounts are just that - separate from the business and free from the predations of the Receiver, should a lawyer's business go titzup.

It'll cost you, of course, but a boat can be as expensive as a house and it's normal for your solicitor to hold the money when you're buying one of them.....
 
cliffdale said:
Does anyone know how to find out whether a dealer is about to go down? Over the years on this forum, there has been plenty of close shaves and some losses.

Example.

If I sold my boat through a broker, signed the appropriate documents but the broker went down having taken the buyers money. Who owns the boat?

Like wise when buying!

Is there a way to protect ourselves?
Click to expand...
This subject was done to death here recently - well over 200 posts!

The conclusion is that if you follow the correct procedures, the risk of losing your money/boat whichever party you are in the transaction is very low, although is always there as there is risk in any transaction.

Suggest you buy the two little RYA booklets on buying and selling boats (one for new and the other for used). This will tell you all about the common, structured way of doing it and the documents involved. Then, if you are dealing through a broker, get on the ABYA site as they explain the Broker role.

One thing you do need to know is the legal relationships as the law is different, for example, buying a boat from a builder direct, buying a new boat though an agent, buying a boat owned by a dealer, or buying a boat from a private owner who is using a Broker.

The TV programmes examples were all different and represented what might go wrong in the last 3 categories of transactions above. the law is very clear and well established in each of the different type of transactions, but by their nature they can be complicated for large one-off mobile assets like boats.

If you feel you are getting out of your depth or are uncomfortable with the risk and the sums of money involved then it might make sense to seek professional advice. However, thousands of boats are bought and sold each year without any problems.

Hope this helps.
 
cliffdale said:
Does anyone know how to find out whether a dealer is about to go down? Over the years on this forum, there has been plenty of close shaves and some losses.

Example.

If I sold my boat through a broker, signed the appropriate documents but the broker went down having taken the buyers money. Who owns the boat?

Like wise when buying!

Is there a way to protect ourselves?
Click to expand...

Watch this space another dealer about to go bang...
 
Excellent advice from Tranona.
If it is a brokerage transaction, my suggestion is to do all possible to complete the transaction with speed. Have all paperwork available and checked before moving money. If as buyer you are really worried about the broker's solvency, agree to pay in two parts, commission & expenses to the broker's account, principal to the vendor's account.
Never pay by cheque, always by immediate value transfers. Complete within the working day.
 
innesker said:
If as buyer you are really worried about the broker's solvency, agree to pay in two parts, commission & expenses to the broker's account, principal to the vendor's account.
Click to expand...

It's as a SELLER you need to be worried about broker's solvency. When I sold the last time I did as you said. I put the boat into escrow, not the money, and had the money wired by seller - edit, I mean buyer - directly to my account not the broker's. The broker never saw the money. See the 200 post thread that Tranona mentions, it did this subject to death, quite well
 
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jfm said:
It's as a SELLER you need to be worried about broker's solvency. When I sold the last time I did as you said. I put the boat into escrow, not the money, and had the money wired by seller directly to my account not the broker's. The broker never saw the money. See the 200 post thread that Tranona mentions, it did this subject to death, quite well
Click to expand...
You had the money wired by the seller? You mean the buyer?
 
Problem as I see it and its a shame more people dont use this site, I am aware that a west Country dealership and the only importer of a certain boat is about to close, now legally I cant say anything yet in case my facts are wrong but I know they are not. There could be someone today about to sign on the dotted line and hand over a £20k deposit for a new boat. when it comes out this dealer has gone tlts up there will be a few owners of _______ boats that will lose out.

I will be doing the whole story on here soon, but for now its bite your tongue. I have a feeling a new company will spring up at the same office selling the same boats.

That is where it is wrong, whilst there can be no come back legally, doubt is a wonderfull word.
 
Hi All,

Tranona's post make good sense and is sound advice except, in my opinion, for the ABYA bit.
ABYA are OK but the BMF is the one to look out for.

The best way is to be sure that the broker you use is a member of the BMF and its sister organisation the BRBA.
As members they annually have to submit details of their clients account and abide by the practices laid down by the BMF.

I am not saying that all will be well (e.g. Peters Opal ) but it is a far better bet to use a BMF member than one who is not.

The company referred to was not a BMF member and hence carried on as they saw fit to do.
A simple call to the BMF would have found that out.

On personal experience, using a normal Solicitor to buy and sell a boat is a nightmare as they have little or no idea what they are dealing with or how to go about getting the paperwork needed..............never again!
The BMF contracts as checked and endorsed by the RYA are good for most scenarios.

Thats my two penceworth anyway for what its worth.

Cloggy
 
I think the Italian system is pretty safer for the buyer, and should be copied.
The buyer gives a signed cheque with 10% ammount which is not deposited, but kept in the brokers hands. The cheque is the contract acceptance too. If the boat is ok after the survey the cheque can be deposited or given back upon full funds receipt.
In the last couple of years I have seen my fair troubles as a broker with the UK system, when even a boat you are selling gets to be a crop and has not passed a survey you get to be sued by the owner when giving the deposit back. Problem is many owners especially Norther Euro ones want this kind of system.
Germans, Italians, Croats, Austrians but want the Italian type of thing.
 
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