Selling a boat - acknowledged defect - double reduction / contract cancellation ? Is this fair / legal

[Refueler]

Apropo nothng at all.
Sellers divide into two camps, with the usual smearing between the two extremes.
There really are some of us who feel uncomfortable ? about selling a boat with serious known problems and one way or another wish to make the buyer aware of known "faults" , possibly reflecting these concerns in an asking price .
This might come back back to bite our conscientious seller who begins wondering if its best not to have any scruples at all about such things.
Personally always like to get as close to the seller as possible and to look him in the eye , far less likely to be "to be economical with the actualité," its when third parties get involved (as sometimes they must) that things can get muddy.
The other way is to simply sell Caveat Emptor and Devil take the hindmost , feel sure we have all been subject to both approaches.

I have never bought any boat through a Broker ............ I know too many who would sell you a dog of a boat and never tell you anything ... hiding behind what Seller has provided.

I always invite seller to be with me at view ... then off for coffee or beer to talk through ... and you usually get more useful info in that coffee / beer chat as seller relaxes .. than you do during inspection.

We'll leave out how I avoid brokers ..........

 

[dunedin]

Makes me wonder why on earth we have contracts and associated deposits at all then.

The contract for the final sale is of particular importance. But the contract subject to survey at least gives some confidence the buyer is serious - as looked to be the case here.
But it is not clear what “all costs” you think you have incurred. The buyer will have sunk costs in the survey fees and perhaps a lift/relaunch for the survey. So they are generally more out of pocket than the seller. And, as others noted, unless you have made an unusual deal with your broker, there would normally be no fees for a sale that does not complete.

But if you choose to go to law to enforce the “sale” then the only winners will be the lawyers. A civil case like this will take months if not years. Meanwhile the boat storage and maintenance fees, as well as legal fees, mount up and you are unable to sell to another buyer.
And unless the wording is very very clear on the defect, it’s extent and repairs then you may in the end lose the case and need to pay the non-buyer’s legal costs as well.

Frustrating, annoying - for both parties. But per post #3 above, I suspect you already know the only way forward is to either accept a lower offer or look for another buyer. Not worth buying the lawyers a new Bentley.

PS. I suspect that it is nearly always the case that a seller believes the cost of fixing any defect is less than what the buyers survey indicates. The surveyor probably has a more up to date view of professional repair costs. But if the seller really believes they can get a quality job done cheaper then they can fix at own cost and relist the boat.

 

[stranded]

The contract for the final sale is of particular importance. But the contract subject to survey at least gives some confidence the buyer is serious - as looked to be the case here.
But it is not clear what “all costs” you think you have incurred. The buyer will have sunk costs in the survey fees and perhaps a lift/relaunch for the survey. So they are generally more out of pocket than the seller. And, as others noted, unless you have made an unusual deal with your broker, there would normally be no fees for a sale that does not complete.

But if you choose to go to law to enforce the “sale” then the only winners will be the lawyers. A civil case like this will take months if not years. Meanwhile the boat storage and maintenance fees, as well as legal fees, mount up and you are unable to sell to another buyer.
And unless the wording is very very clear on the defect, it’s extent and repairs then you may in the end lose the case and need to pay the non-buyer’s legal costs as well.

Frustrating, annoying - for both parties. But per post #3 above, I suspect you already know the only way forward is to either accept a lower offer or look for another buyer. Not worth buying the lawyers a new Bentley.

PS. I suspect that it is nearly always the case that a seller believes the cost of fixing any defect is less than what the buyers survey indicates. The surveyor probably has a more up to date view of professional repair costs. But if the seller really believes they can get a quality job done cheaper then they can fix at own cost and relist the boat.

I presume the defect is the teak decks the op seeks advice on renovating in another thread. In which case it is perfectly understandable that he and the buyer will see the Forth Bridge or complete overhaul options outlined in replies on that thread differently. No blame, just different perspectives on a subjective question.

 

[Clash]

I presume the defect is the teak decks the op seeks advice on renovating in another thread. In which case it is perfectly understandable that he and the buyer will see the Forth Bridge or complete overhaul options outlined in replies on that thread differently. No blame, just different perspectives on a subjective question.

Seems like nail on the head here. Difference between seller and surveyor probably; seller agrees on repair to the obviously affected parts, surveyor says replace the lot.

 

[Mister E]

Buyer says that's the plan - give me my deposit back, seller throws toys out of pram.

Seller returns what is left after all costs have been deducted.
Some buyers are just not worth any effort if the defects are told.

 

[Momac]

Indeed are there grounds here to entirely withhold the deposit (10% of agree price and itself a five figure sum). This last aspect would at least put the onus of going to Law on the reneging party.

Just asking for a friend !

The offer was subject to survey and it seems the defect is worse, in terms of cost to rectify, compared to the purchasers initial thoughts.
Return the deposit in full and move on. (Or agree a lower price).

 

[ari]

Pretty simple. Buyer made offer subject to satisfactory survey. Buyer not satisfied with survey result. Buyer gets his deposit back les any expenses incurred such as the lift out.

Precisely why we have contracts, to keep things simple.

 

[ari]

The offer was subject to survey and it seems the defect is worse, in terms of cost to rectify, compared to the purchasers initial thoughts.
Return the deposit in full and move on. (Or agree a lower price).

Exactly. Very straightforward, what's not to understand?

 

[Refueler]

Pretty simple. Buyer made offer subject to satisfactory survey. Buyer not satisfied with survey result. Buyer gets his deposit back les any expenses incurred such as the lift out.

Precisely why we have contracts, to keep things simple.

Agree ... but go back and read first post ... seems defect costs were agreed discounted BEFORE survey was made ... survey reports higher cost to rectify defect ... slam dunk basically ....

If Buyer and Seller had agreed Survey BEFORE agreeing defect costs ... then yes - you right.

 

[benjenbav]

In post #1 the OP says:

‘A standard style sale contract was then signed by both parties. This provided the buyer the right to withdraw for an undisclosed and significant defect being discovered at survey.’

In England the most common way to buy and sell a used boat (other than something small enough to be an instant cash type of deal) is just this. A contract is signed before survey and sea trial and will contain clauses dealing with matters that may be revealed by either.

In this case the parties have identified a fault prior to the contract and have made an adjustment to the price to recognise same.

So, the question is really to what extent (if at all) the surveyor identified something new as opposed to confirming what everyone already knew.

I would need to know a good deal more about the precise wording both of the contract and of the surveyor’s report to get anywhere close to answering the question.

I could certainly see it being argued both ways, with a judge needing to prefer one view over the other. And all - as several posters have said - involving a great deal of time, energy and legal fees.

However, one point that no-one has made so far is that not only is it unlikely for a case of this nature to get to court but that civil procedure rules nowadays require parties to demonstrate that they have genuinely tried to find a settlement outside court.

This can involve several different techniques. For example, mediation. This is a non-binding forum where the arguments can be aired. I used to think it was a stupid idea compared with a dust-up in front of a trial judge, but it is actually surprisingly successful.

So, to sum up, if the parties don’t go legal there will be a ‘Yes it is; no it isn’t’ argument. Everyone’s right and everyone’s wrong. Maybe a compromise will be found. Maybe not.

If the parties go legal there’s again no certainty of outcome. There is the certainty of fees though. And maybe there’s a possibility of getting into a forum where a sensible, moderated discussion can be had.

 

[Flynnbarr]

My oh my OP the irony is strong with this…..

You are the chap that when buying reserves the right to rewrite a standard contract to your benefit and when selling has banned a surveyor from your boat I believe…..
You even invented a syndrome for the older seller!…..

Maybe you…to use your phrase….have Old man syndrome and are looking at your boat with rose tinted specs….
As another poster said earlier if the teak deck issues aren't that big an issue in your mind then maybe you should have sorted them before putting it on the market….

My advice would be to stick with the seller and find common ground as the broker I know says buyers are a bit thin on the ground at the moment and I would think that a buyer of a Grand Banks with teak decks that are less than A1 would be even less……there is a lot of teak on a GB….!

 

[ari]

Agree ... but go back and read first post ... seems defect costs were agreed discounted BEFORE survey was made ... survey reports higher cost to rectify defect ... slam dunk basically ....

If Buyer and Seller had agreed Survey BEFORE agreeing defect costs ... then yes - you right.

Deal was subject to satisfactory survey. It wasn't satisfactory. If that's because a fault previously negotiated on turned out in the survey to be far worse than originally thought then the survey is clearly not satisfactory.

 

[stelican]

My oh my OP the irony is strong with this…..

You are the chap that when buying reserves the right to rewrite a standard contract to your benefit and when selling has banned a surveyor from your boat I believe…..
You even invented a syndrome for the older seller!…..

Maybe you…to use your phrase….have Old man syndrome and are looking at your boat with rose tinted specs….
As another poster said earlier if the teak deck issues aren't that big an issue in your mind then maybe you should have sorted them before putting it on the market….

My advice would be to stick with the seller and find common ground as the broker I know says buyers are a bit thin on the ground at the moment and I would think that a buyer of a Grand Banks with teak decks that are less than A1 would be even less……there is a lot of teak on a GB….!

But the OP said it's not his boat!

 

[Refueler]

Deal was subject to satisfactory survey. It wasn't satisfactory. If that's because a fault previously negotiated on turned out in the survey to be far worse than originally thought then the survey is clearly not satisfactory.

Read post again ...

"So when looking to purchase a particular boat the would be buyer notes a specific defect, mentions this to the broker / seller and duly takes this into account in his offer to purchase, and considerably below the asking price. Said offer is accepted by the seller as including a reasonable account of the acknowledged defect.

Hence when the buyer signed the contract he had acknowledged the existence of the specific defect and had made an allowance for its potential repair when he made his offer.

In conjunction with this when the seller accepted the offer he agreed to the reduction from asking price to include said defect having been acknowledged.

A standard style sale contract was then signed by both parties. This provided the buyer the right to withdraw for an undisclosed and significant defect being discovered at survey."
The later contract then says : or an undisclosed and significant defect being discovered at survey."

Not quite what you understand.

The mistake made here is agreeing a defect and adjustment of price for the boat BEFORE survey.

 

[dunedin]

Read post again ...

"So when looking to purchase a particular boat the would be buyer notes a specific defect, mentions this to the broker / seller and duly takes this into account in his offer to purchase, and considerably below the asking price. Said offer is accepted by the seller as including a reasonable account of the acknowledged defect.

Hence when the buyer signed the contract he had acknowledged the existence of the specific defect and had made an allowance for its potential repair when he made his offer.

In conjunction with this when the seller accepted the offer he agreed to the reduction from asking price to include said defect having been acknowledged.

A standard style sale contract was then signed by both parties. This provided the buyer the right to withdraw for an undisclosed and significant defect being discovered at survey."
The later contract then says : or an undisclosed and significant defect being discovered at survey."

Not quite what you understand.

The mistake made here is agreeing a defect and adjustment of price for the boat BEFORE survey.

But we have only one side of the story. If it was, for sake of argument, an issue with teak decks, the recognised “defect” may have been a small area of teak requiring repair. On survey it transpired that a much larger area needs repair, or perhaps total replacement, in the professional view of the surveyor.
Hypothetically the seller may not agree with the surveyor that a bigger repair / replacement is needed and consider it the same “defect”. The buyer and his surveyor may legitimately consider this not the same “defect” but a much bigger one.
Also, the OP refers to broker costs. Other than the fact that there should normally be none for a non-sale, what has the broker recommended the seller does? With a broker involved, they normally hold the deposit.

 

[jfm]

Depends entirely on wording of contract and possibly on wording of surveyor's report. Without these I can't offer a view.

Even if the answer is in your favour, you then have the practical problem of persuading a stakeholder who owes a duty to both sides (ie the broker) actually giving you the deposit money. They tend to be scared-y cats and prioritise looking after themselves over you.

Probably isn't worth the fight therefore. Probably best to ask broker to give you your expenses and return the balance of the deposit to the non-buyer. Pity, but this is how it is.

 

[superheat6k]

Depends entirely on wording of contract and possibly on wording of surveyor's report. Without these I can't offer a view.

Even if the answer is in your favour, you then have the practical problem of persuading a stakeholder who owes a duty to both sides (ie the broker) actually giving you the deposit money. They tend to be scared-y cats and prioritise looking after themselves over you.

Probably isn't worth the fight therefore. Probably best to ask broker to give you your expenses and return the balance of the deposit to the non-buyer. Pity, but this is how it is.

Indeed not worth a legal fight - so was it the deck ?

Unlikely in view of the real condition of the real deck. Just another 'Surveyor destroyed sale'. Rather convenient however as the surveyor is, my friend understands, a mate of the former buyer.

A key thing is the buyer was not present at the survey and thus did not understand the Spirit of the survey and verbal advice of the surveyor (BTW his mate). Or perhaps this was deliberate.

In reality an older would be buyer suffering buyer's remorse (or his wife in his ear !) needing a valid excuse to withdraw from a contract he should not have ever entered into in the first place. Indeed honestly would be preferred to admit this.

Some lessons here for my friend ...

1 Do not allow a survey without the buyer present so he sees, as the seller did, the actual Spirit of the survey.

2 When signing up to a completely un-enforceable sale contract recognise you do this on basis this is just another hurdle in the overall sale process. In reality the sale contract can never be enforced so is entirely pointless. Just sign to appease the broker / buyer.

3 Do not ever entertain a later, way below agreed, retort re the agreed price - i.e the reneging buyer can never buy the boat.

There is an established scam here - buyer offers and sellers accepts, surveyor appears, trashes the boat, offer is withdrawn - then several weeks later buyer returns with a lower offer. This indeed might well work (or might not of course ! )

Anyway now for some (minor) woodwork for my friend !!!

 

[ari]

Indeed not worth a legal fight - so was it the deck ?

Unlikely in view of the real condition of the real deck. Just another 'Surveyor destroyed sale'. Rather convenient however as the surveyor is, my friend understands, a mate of the former buyer.

How is that 'convenient'? The former buyer is out the cost of the survey and lift and hasn't got the boat he wanted. Doesn't sound very 'convenient' to me...

If he didn't want the boat the most 'convenient' thing to have done would have been to simply walk away in the first place...

 

[ari]

Read post again ...

"So when looking to purchase a particular boat the would be buyer notes a specific defect, mentions this to the broker / seller and duly takes this into account in his offer to purchase, and considerably below the asking price. Said offer is accepted by the seller as including a reasonable account of the acknowledged defect.

Hence when the buyer signed the contract he had acknowledged the existence of the specific defect and had made an allowance for its potential repair when he made his offer.

In conjunction with this when the seller accepted the offer he agreed to the reduction from asking price to include said defect having been acknowledged.

A standard style sale contract was then signed by both parties. This provided the buyer the right to withdraw for an undisclosed and significant defect being discovered at survey."
The later contract then says : or an undisclosed and significant defect being discovered at survey."

Not quite what you understand.

The mistake made here is agreeing a defect and adjustment of price for the boat BEFORE survey.

Deal was subject to satisfactory survey. It wasn't satisfactory.

 

[stranded]

Indeed not worth a legal fight - so was it the deck ?

Unlikely in view of the real condition of the real deck. Just another 'Surveyor destroyed sale'. Rather convenient however as the surveyor is, my friend understands, a mate of the former buyer.

A key thing is the buyer was not present at the survey and thus did not understand the Spirit of the survey and verbal advice of the surveyor (BTW his mate). Or perhaps this was deliberate.

In reality an older would be buyer suffering buyer's remorse (or his wife in his ear !) needing a valid excuse to withdraw from a contract he should not have ever entered into in the first place. Indeed honestly would be preferred to admit this.

Some lessons here for my friend ...

1 Do not allow a survey without the buyer present so he sees, as the seller did, the actual Spirit of the survey.

2 When signing up to a completely un-enforceable sale contract recognise you do this on basis this is just another hurdle in the overall sale process. In reality the sale contract can never be enforced so is entirely pointless. Just sign to appease the broker / buyer.

3 Do not ever entertain a later, way below agreed, retort re the agreed price - i.e the reneging buyer can never buy the boat.

There is an established scam here - buyer offers and sellers accepts, surveyor appears, trashes the boat, offer is withdrawn - then several weeks later buyer returns with a lower offer. This indeed might well work (or might not of course ! )

Anyway now for some (minor) woodwork for my friend !!!

Must say, reading this through, my sympathy is entirely with the (non) buyer, and I hope he manages to recoup his costs from your friend, who it sounds was trying to pull the wool over his eyes.