This offer "subject to survey" business

[Boo2]

If I make an offer "subject to survey" and my surveyor finds the boat has a problem do I get my deposit back if the seller refuses to make it right ? What if the problem is absolutely trivial but both sides refuse to compromise ? I suppose that if the surveyor finds an issue which s/he says must be rectified before next use then there is no argument, but what if it's not so important as all that (but not minor either) ? What kind of attitude can I expect the broker to take ? And, aamoi, how big a deposit is a broker likely to ask for before letting my surveyor loose on the boat ?

Thanks,

Boo2

 

[sailorman]

http://www.ybw.com/forums/showthread.php?t=230720&highlight=survey

 

[Billjratt]

Things have no doubt changed - (because the world expects everything to be perfect...)
But - -" subject to survey" used to mean : I'm prepared to pay £1 and other considerations for your boat (house, whatever) because I like what I see, as long as the more qualified and less rose-tinted person who I have hired to check everything out, doesn't bring up anything that frightens me too much.(and the product is not as advertised)
If there are issues, ie, something hitherto un-noticed and major, needs fixed, then usually a "cost-of-fixing-by-a-reasonable-professional" fee is agreed to be deducted from the offer.
It's better to do that than "force" the vendor to correct problems, because you really want to see them fixed properly under your control, rather than papered over...
Also, guarantees for remedial work (osmosis etc) will be with you, the bill-payer - not the mysterious non-transferrable type remaining somewhere in the intangible past.
Having said that, If you've fallen in love with a rotting hulk, nobody can save you - but you have joined the learning curve at the bottom, same as the rest of us. Live, learn, enjoy.

 

[Tranona]

If I make an offer "subject to survey" and my surveyor finds the boat has a problem do I get my deposit back if the seller refuses to make it right ? What if the problem is absolutely trivial but both sides refuse to compromise ? I suppose that if the surveyor finds an issue which s/he says must be rectified before next use then there is no argument, but what if it's not so important as all that (but not minor either) ? What kind of attitude can I expect the broker to take ? And, aamoi, how big a deposit is a broker likely to ask for before letting my surveyor loose on the boat ?

Thanks,

Boo2

I assume you have done the sensible thing and purchased the books on buying and selling boats from the RYA. These will provide you with the answers to your questions.

In practical terms when you buy a boat from a private individual either direct or through a broker you are not covered by any consumer legislation, but by the well established law of contract. Your contract will be specific to the purchase, although there are model contracts commonly used by brokers or you can get one from the RYA or MCA for a direct purchase. This will lay out the terms and conditions of the sale. The underlying principle for a buyer is "caveat emptor" meaning buyer beware. This means that you have no comeback on the vendor if you subsequently find the boat was not as he described it. That is why you engage a surveyor to act for you and check that the boat is as described. If he finds faults that are not declared then you are entitled to re-negotiate if you feel this changes the value of the boat. This can be in the form of a price reduction or a commitment on the vendor's side to make good.

Typically the contract will require you to place a deposit normally 10% so that the vendor stops dealing with other potential buyers to allow you time to instruct your surveyor. He will report to you and advise on condition etc and value. He will identify what needs doing and help you negotiate a price reduction if necessary - or advise you to walk away. All his costs are yours as he is working for you. If you are unable to reach agreement with the vendor, you can walk away, but be prepared to forfeit part of your deposit if you have just changed your mind.

In reality there needs to be give and take on both sides. Remember the vendor is not in trade - you are buying his personal property. The broker is his agent and is there to protect his interest and your surveyor yours.

The system works well for most transactions. A good broker will talk you through it as he has been there many times before. Most difficulties arise when the boat is less than perfect and there is a mismatch between the vendor's and buyer's pereception of its value! When you are operating in this sector of the market you need to be prepared to walk away as the cost of making a mistake on a "project" boat can haunt you for a long time.

 

[Bosun Higgs]

Billrat talks a lot of sense.

When making your offer to buy subject to survey you are making the offer conditional so no contract is formed and you should get your deposit back. Nevertheless, best make double sure by giving the deposit subject ( in writing) to it being returnable if for any reason at all you decide not to go ahead after survey.

The last boat I bought the agent tried to say that the deposit was only returnable if the defects discovered on survey were major. I refused to accept that. It was in fact the very first time I ever paid a deposit at all.

 

[gjgm]

A succinct answer from Tranona. Just remember that people and emotions are involved so things dont always run as smoothly as the books describe!
You can make your offer subject to anything you like, but a survey and sea trial are the norms.
As a buyer, it obviously helps if you have had a good look at the boat yourself before an offer. Not always possible, but its worth ensuring the seller knows how far involved you have been. If you have looked at the boat, made an offer based on your own inspection, you shouldnt then expect much favour from the seller if you try to lower the price because of something that was damn obvious from the start, for example. However, it would be reasonable to observe a concern, and ask the surveyor for a professional assessment. For example, a gel coat crack could be anything from a bit of cosmetic damage, to hiding a major repair.It is not reasonable for you to have been able to make that judgement when you made an offer.
Yes, you can have arguments over the full refund, but this really should only be in cases of unreasonable delays (ie lost potential alternative buyers),additional costs for the seller and the like, or your withdrawal from the sale for unjustified reasons (cant afford it after all, etc).
As regards who should make good,what, both sides being reasonable is more likely to bring about a sale than one side being pigheaded ! It is after all, a second hand item, not a dealer brand new craft.

 

[oldharry]

What if the problem is absolutely trivial but both sides refuse to compromise ?

Do not forget you are buying a second hand boat from a private individual. The owner is selling the boat 'as seen and approved', the price reflecting the condition it is in (thats why you have the surveyor!). He is under no obligation to repair it for you within an agreed price. 'Subject to survey' simply means you reserve the right to modify your offer should the survey show anything up.

Trivial faults are just that, and should be reflected in the vendors asking price. The owner does not have to accept any modified offer after survey, nor does he have to agree to do anything to the boat before he sells it to you. If he agrees to do any work as part of the deal, then that is different, as it forms part of the contract of sale. At the end of the day if you and the vendor cannot agree a price, you walk away. How much is that particular boat worth to you now you have seen the survey?

 

[PeterGibbs]

If I make an offer "subject to survey" and my surveyor finds the boat has a problem do I get my deposit back if the seller refuses to make it right ? What if the problem is absolutely trivial but both sides refuse to compromise ? I suppose that if the surveyor finds an issue which s/he says must be rectified before next use then there is no argument, but what if it's not so important as all that (but not minor either) ? What kind of attitude can I expect the broker to take ? And, aamoi, how big a deposit is a broker likely to ask for before letting my surveyor loose on the boat ?

Thanks,

Boo2

In any deal the implied condition of the agreement is that the goods are "in a condition fit for the purpose advertised" In our case, sailing. Cosmetic imperfections clearly fall outside the scope of a deal - they are visible at the time the offer to treat was made and accepted.

But if your expert surveyor finds objective reason to doubt the fit for purpose condition, then compensation has to be agreed, or the deal is not enforceable. The vendor is only entitled to argue for retention of some of the deposit paid to the broker if he has clearly
suffered some loss, most unlikely in this case. Delay in making the sale because of your survey would not qualify.

If dealing with a national broker, or someone you can trust, why not make a deposit and proceed with your survey? If the deal is less well founded you would be rightly hesitant to lay out 10% on a vessel that might not even be unencumbered let along fit to sail: hold back on the deposit, I say. After all, why would a willing vendor tell you to clear off for not putting up a deposit when just a few days later, and entirely at your cost, the survey would have been completed and the deal finalised?

As many here will advise you, if the deal looks and sounds like a duck, then....Don't lob out a deposit then fight for weeks to get some of it back, with or without a written contract.

PWG

 

[Tranona]

In any deal the implied condition of the agreement is that the goods are "in a condition fit for the purpose advertised" In our case, sailing. Cosmetic imperfections clearly fall outside the scope of a deal - they are visible at the time the offer to treat was made and accepted.



PWG

That is not true when buying from a private vendor. You are buying as seen and there is no "fit for purpose" implied. That is why it is advisable to have a surveyor to give his professional opinion as to whether it is as described.

 

[PeterGibbs]

That is not true when buying from a private vendor. You are buying as seen and there is no "fit for purpose" implied. That is why it is advisable to have a surveyor to give his professional opinion as to whether it is as described.

All transactions are subject to the law of the land whether private or otherwise.

And what does a surveyor do other than to report on whether a vessel is fit for purpose?

Once again you have dived in to correct another post without proper foundation!

PWG

 

[Tranona]

All transactions are subject to the law of the land whether private or otherwise.

And what does a surveyor do other than to report on whether a vessel is fit for purpose?

Once again you have dived in to correct another post without proper foundation!

PWG

It is indeed in consumer law. However, I think you will find that a contract between two private individuals is subject to the terms and conditions of the contract. It would be an unwise private vendor who made any statement about whether what he is selling is fit for the purchaser's purpose. He only has to describe it honestly.

The surveyor only reports on the condition of the boat that he finds. The purchaser may ask him to advise on its fitness for purpose - eg is this suitable for ocean voyaging - but this is not binding on the vendor. It is for the purchaser to verify that it is fit for his purpose as he has no comeback on the vendor if it turns out not to be so.

Just in case I am losing my marbles, I looked up my basic text on Contract.

Implied terms by Statute

Fitness for purpose and merchantable quality

s.14 Sale of Goods Act 1979

WHERE THE GOODS ARE SOLD IN THE COURSE OF A BUSINESS (my emphasis) there is an implied condition that the goods shall be reasonably fit for the purpose for which they are required and an implied condition that the goods shall be of merchantable quality.

This clearly does not apply to a private sale.

Sorry if you think I am being picky, but the OP needs to know where he stands. It is all too easy to bandy around legalistic terms as if they are everyday language when they actually have very specific meanings.

 

[catalac08]

I had a difficult experience over a boat deposit of 10% paid to a private seller - the problem was that the survey revealed lots of minor problems that collectively amounted to about 12% of the agreed purchase price plus a lot of work and I wanted to withdraw my offer to buy as I wanted to sail the summer not spend it under a boat in the yard but the seller would not return the deposit arguing (factually) that there were no major or structural faults and that it was an old boat and the price was right for that boat.

In the end in order to break a stalemate I agreed to pay a lower price and he took off the boat a cruising chute, life raft and one or two other things.

Although I was sure that eventually I could get the deposit back via the law that was clearly take time and may have involved legal costs I could not afford.

It will be a long time before I part with a deposit again and if I do I would word the contract referring to my wish to withdraw if in my opinion the boat was not suitable and have the money held by a solicitor.

 

[lille_bee]

Deposits and all that

Even if you found the boat privately, what about putting the whole deal in the hands of a broker for say a nominal 2% (one each), let the broker do all the paperwork, contracts etc and hold the deposit (in a client's account of course). The broker could also put some exact wording in the contract that covers what can and cannot be used as renegotiation ammunition following survey; this could be in monetary terms e.g "if a quote for the cost of any repairs, from an agreed boat yard, exceeds say £.... then lets talk again, if less, then the deal must go ahead or lose deposit."

Speaking as an ex-broker.... very ex.... both owners and purchasers could be, at times, a serious entrenched pain in the proverbial stern tube. I don't know what was more annoying: owners "pretending" to put their boats on the market, just to see what other people think of their pride and joy or "tyre kickers" just wanting to snoop about other people's property. That's why I'm much happier sailing them than selling them.

Well that's enough of my hobby horses for a while.

Regards to all

john somewhere warm and miles and miles and miles away from the single figure temperatures.

 

[Deleted member 36384]

You Could Risk Surveying The Boat Without Paying A Deposit

When I bought the boat I did not pay a deposit before survey. I had a number of discussions with the owner and said that I was prepared to survey the boat. The Broker wanted a deposit but I refused to pay and suggested he seeks his client's permission to let me survey the boat. This was given.

The survey revealed a number of concerns and eventually we agreed a price.

This is an unorthodox method but the risk of him selling the boat in the middle of my survey to another party was low for the following reasons. I knew the boat had been on offer for about a year, the so called credit crunch had just started and it was end of season (not sure how relevant that last reason is).

The point I am making is that anything is possible in a negotiation just understand what you want and the boundaries you are happy to be constrained within. I did worry because I laid out a bit of cash to have the boat lifted out the water and surveyed. Paranoia was trying to convince me that the boat was going to be sold imminently which was his right. The reality was different, so I just kept the lid on my fears.

Remember in negotiating you have all the cards: the seller wants your money, you can choose to give it or not. Of course he has the boat and thinks he has all the cards too - or does he think that!