What happens if a marina goes bust?

[TwoHooter]

Just suppose a boat owner were to take advantage of a discount by paying a year's berthing licence in advance, and then the marina went into administration.

Would the pre-payment vanish into thin air and the boat owner receive a fresh demand for licence fees from either the administrators or the new owner of the marina when it had been sold?

I know how this works the other way round if a tenant (or licensee) goes into liquidation, administration, or a Company Voluntary Arrangement. But what would happen to tenants (or, in the case of boats, licensees) if their landlord goes bust after they have paid their license fee in advance?

I have a reason for asking but I won't be drawn into any discussion about individual marina operators. I'm asking for views on the general principle here. Thanks.

 

[Seastoke]

Good post but have no input.

 

[longjohnsilver]

If you pay by credit card you’ll be covered.

Unfortunately the marina im in will not accept credit card payments.

 

[volvopaul]

I have never known any marina go bust especially in these times where they have been given rate and council tax breaks , can I ask what’s the point of the post?

 

[Bristolfashion]

Normally, your contract would be unaffected. However, these things are specific and you would need to contact a specialist who can take into account the status of your marina owner and your individual circumstances as well as ensure that you take the best action to protect your position.

If your marina stops providing the agreed services then they may be in breach - but you could then end up as an unsecured creditor if you try & get your money back.

 

[Portofino]

Would have thought your contract with them ( unless there’s a pass on clause if such a thing ever exists and is enforceable ) .
You loose all and legally start again with the new entity .
Think about it you step in open a “ two hooter “ marina ltd business account ........to pay overheads with exactly what cash ??

Boats are berthed in your Co property like sitting ducks .Start tapping on there hulls .

Thats the month vs annual risk for your cash .
Nobody held a knife to your throat .You could have paid even a day rate , and lost nothing .

 

[TwoHooter]

You loose all and legally start again with the new entity .

That's what I think, but truly I don't know.

If I pay in advance for anything else (building work, car, holiday) and the supplier fails then I have lost my money unless there is a protection scheme like ATOL/ABTA for travel. No such scheme for berthing fees . But do special arrangements apply if a landlord fails after accepting advance payments?

On the other hand, Volvopaul is right, none of us have ever seen a marina go bust. So why am I asking? Probably just being over-cautious.

 

[ontheplane]

To my mind you become an unsecured non-preferential creditor of the old company. When (assuming when) it's sold then the company buying it will pay something for the marina, that goes in the pot and then after staff and the govt are paid, the other creditors pick over the bones.

 

[gery w]

Just out of curiosity, what discounts or incentive does your marina offer in return for paying in advance?

My contract runs April to April 42ft boat £5500, if I pay next years before Christmas they are offering 1% saving.

 

[TwoHooter]

To my mind you become an unsecured non-preferential creditor of the old company. When (assuming when) it's sold then the company buying it will pay something for the marina, that goes in the pot and then after staff and the govt are paid, the other creditors pick over the bones.

That is what I thought. I've been an unsecured creditor once in my personal capacity, and on 2 occasions when it was my employer who had the bad debt and I had to make the claim. Never saw a penny, waste of time filling in the claim forms. Wasted half a day collecting the supporting information for one of the claims then watched as the liquidator stretched the liquidation out as long as there was any money to pay his fees at which point he pulled the plug. Became very cynical after that.

Just out of curiosity, what discounts or incentive does your marina offer in return for paying in advance?
My contract runs April to April 42ft boat £5500, if I pay next years before Christmas they are offering 1% saving.

The discount we have been offered is very tempting.

 

[Never Grumble]

If you are concerned take a look at their most recent accounts on Companies House.

 

[Croftie]

Just out of curiosity, what discounts or incentive does your marina offer in return for paying in advance?

My contract runs April to April 42ft boat £5500, if I pay next years before Christmas they are offering 1% saving.

Mine is the same timing but 5%. Renewal for existing berth holders for the 21/22 season is at the same rate as this year.

 

[ontheplane]

In my experience, if a liquidator is involved you won't see a penny - as above - they just stretch everything out to keep paying themselves huge fees till there is nothing left. And Liquidators won't do it if there isn't at least enough there to pay their fees - I put a company into liquidation once - there were £3000 of assets and significantly more debts than that and no-one was interested as their cheapest fee was £7000 - and I wasn't going to dig £4k out of my pocket to put a company into liquidation - if I had £4k I'd have saved the company with it!

 

[PeterBoater]

Pay by credit card for Section 75 compensation?

 

[LittleSister]

There was, I think, a case of a marina going bust a few years ago which was reported on these forums. Somewhere further up the Medina on the Isle of Wight, perhaps? As I recall, the upshot was that the successor marina owners had no obligation to honour the contracts berth-holders had with the folded company, but there was some talk that they might waive some part of the replacement fees to maintain goodwill and a full marina.

 

[Blue Sunray]

There was, I think, a case of a marina going bust a few years ago which was reported on these forums. Somewhere further up the Medina on the Isle of Wight, perhaps? As I recall, the upshot was that the successor marina owners had no obligation to honour the contracts berth-holders had with the folded company, but there was some talk that they might waive some part of the replacement fees to maintain goodwill and a full marina.

Island Harbour Marina, Dominic Chappell who later when on to further triumphs at BHS?

ETA:

Island Harbour Marina goes belly up

 

[Hurricane]

You think you are worried.
Try thinking about a 30 years lease!!!
In the Med, we don't "buy" our berths.
They are on a lease - just like an annual one - only mine was for 30 years.
Big discount, of course.

AFAIK, in the case of Sant Carles, the marina is a separate company that owns the head lease which was for 30 years.
The company name is Sant Carles Marina SA.
Our 30 year leases follow the same terms as the head lease.
As I understand it, MDL owns 50% of the company Sant Carles Marina SA - the other 50% is owned by a local consortuim of 3 other marinas up the Spanish Coast.
In the case of Sant Carles, MDL are also the marina operators - i.e. the company responsible for running the marina.
Our contracts have a clause that allows us to be involved in the event of the marina going bust.
That was my motivation for setting up SCMCHAT - our marina forum.
That way, I have contact details of people who would be interested in the event of the marina going bust.
I'm not sure what we could do but at least, we would be able to act as a single voice.

 

[jrudge]

It will depend on how the failure is treated.

The options are for the receiver to either

a. take the assets and sell them off ( in essence to liquidate)

b to sell the business as a going concern.

Under A you may keep your berth if the buyer of the Marina part of the assets chooses to keep the existing customers happy.

Under B it will still be down to the structure of how it is sold but you are more likely to retain your berth. In the mean time the receiver will be trading the business and you will probably see no difference.

So in worst case yes you loose the lot, but this is by no means certain and will depend on how it is sold and the buyers decision. If most pay monthly ( they probably do) then the number of annual contracts is relatively small. They can show how nice they are by honouring the annual contracts and will give other creditors confidence.

The last time Fairline went bust the buyers honoured the boats in build. That will have been factor into the price they paid.

 

[TwoHooter]

Thanks for all the replies.

If you are concerned take a look at their most recent accounts on Companies House.

Yep, done that.

In my experience, if a liquidator is involved you won't see a penny - as above - they just stretch everything out to keep paying themselves huge fees till there is nothing left.

So true.

Pay by credit card for Section 75 compensation?

Tried that. Debit cards only.

There was, I think, a case of a marina going bust a few years ago which was reported on these forums.

Thanks for that, wasn't aware of it. But although I found some information about the business failure I couldn't discover whether boat owners who had paid in advance suffered a loss.

EDIT: While I was typing Blue Sunray, Hurricane & jrudge posted their replies, thanks to you as well.

I think I have my answer. Payments in advance are at risk, so need to make a business judgement.

 

[jrudge]

Unless there are other factors why would a UK marina go bust at this time. They have lots of paying customers, they are not paying rates ( which will be huge) and many staff will have been on Furlough .