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Old 08-03-2011, 06:34   #16
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Re: Purchase Deposit Threatened

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Originally Posted by paul_doolan View Post
I thought I was buying the boat unencumbered by anything related to VAT. I have a number of emails stating to the broker that I will need proof of VAT having been paid.
I don't suppose these emails are dated before you paid the deposit??
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Old 08-03-2011, 06:42   #17
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Re: Purchase Deposit Threatened

Hi, Paul

You need to review the situation first.

(a) What was the terms of the ESCROW, and do you have a copy of them, this is a key factor. If the ESCROW terms have no reference to you getting or not getting the lease transferred, then this is a key point.

(b) You say you requested an unencumbered title, yet you are knowingly entering into a sale , taking over a lease. Hence by definition the boat is encumbered before during and after the sale. You would not be able to claim that you were seeking unemcumbered titile, in this case.

(c) as I stated the broker could be completely correct that the VAT is "paid" on the boat. ( I wouldnt go into the reasons why there isnt actually anything called "VAT status of an asset"). Knowing the way these deals are set up the VAT would be paid. Its the VAT on the lease payments thats at issue here,


So, you have several options

(1) If the broker knowingly mis-represented the situation, Then you may have recourse through him or his professional indemnity. However on the face of it I suspect hes not at fault.

(2) IF you have documentary evidence that you specifiec that the one of the conditons of sale or the ESCROW agreement states it , that the deposit ( or the whole sale) was conditional on being accepted by the lease compnay , then you have legal recourse under that from the broker.

(3) However if you merely accepted a standard ESCROW agreemen, ie that nothing is touched until the sale is completed,BUT you havent had a clause like (2) above inserted, then you will be held to complete the sale , whether or not you get lease approval, and hence you will loose it if you back out.


You have, in my view,

(a) pull out and start various legal challanges, which will cost you dearly intime and money, and could consume all the deposit.

(b) Meet the lease company and see if there is a way forward. Remember if the lease company is ltalian ( or a branch in ltaly) and you dont live in ltaly( or have no substantial assets in Italy), it will be very difficult to secure transfer of the lease, irrespective of your financial status).

(c) My solution would be, since you state you are financially solvent, is to arrange a new lease in your own country of tax residency and then "buy out " the Italian lease.Unfortunately that may be more expensive and the VAT discount will not apply if you live in a country that doesnt have a discount VAT scheme. ( see malta for expariate VAT lease schemes)


Unfortunately, I see and feel your pain, buy you were somewhat naive entering into a close to half a million euro transaction without proper advice and counselling. You case may be very weak.


PS: I suggested German lawyers as the only legal action you can take is against your brokers, the sellers have done nothing wrong it seems, hence an action in italy would be very unlikely to suceed.

Dave
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Old 08-03-2011, 06:46   #18
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Re: Purchase Deposit Threatened

I gave him a list of the things I would require before I handed over the deposit, but he didn't specifically answer the point regarding the VAT! As already indicated though, the sales particulars specifically say that VAT is paid on the boat.
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Old 08-03-2011, 07:01   #19
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Re: Purchase Deposit Threatened

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Originally Posted by paul_doolan View Post
As also suggested, I have just contacted The Multihull World Brokerage, of which this broker is a member. Their managing director is going to call me tomorrow to discuss.
The Multihull World Brokerage is a network. Hope they will be helpful.
On the other hand I believe that broker's Handelskammer (chamber of commerce)home in Germany has a much more laverage on him, so may be You will try to contact them. They are regional, so You will find right one by googling HANDELSKAMMER + name of LAND.

I'm keeping fngers crossed for You
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Old 08-03-2011, 07:09   #20
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Re: Purchase Deposit Threatened

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I gave him a list of the things I would require before I handed over the deposit, but he didn't specifically answer the point regarding the VAT! As already indicated though, the sales particulars specifically say that VAT is paid on the boat.
Paul, I dont want to go round in circles. The Boat would be VAT paid. its the lease that isnt. Hence it is quite correct to state, based on the information, you provided, that the VAT "status" is VAT paid. You see normally , where finance is present, then the seller redeems the finance, pays any remaining VAT on the finance and the boat is sold to you unemcumbered. However in this case you didnt elect to do that, you elected to buy the boat "encumbered" by the lease and theirin lies the problem.

Sorry if all this is not great news, but I dont want to sugar pill it.

Dave
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Old 08-03-2011, 07:16   #21
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Re: Purchase Deposit Threatened

Dave,
Perhaps another tack would work:
The Required completion date on the contract is/was 26th Feb 2011. Due to ongoing problems on the boat, some found by my surveyor, the boat is not expected to be ready until the end of March. The contract states that "If there are still obvious defects on the day of the handing over (there certainly were!), -the buyer accepts a final repair within ten days of these failures on sellers expense. -if this fails, the buyer might delete this contract"

I have sent an email today to the broker stating exactly this and specifically asked for the contract to be deleted. He has not replied. Can I enforce this and if so, how?
Paul
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Old 08-03-2011, 07:19   #22
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Re: Purchase Deposit Threatened

Paul, retain a lawyer in Germany for advice and initially, in order to send a demand letter for the return of your deposit. I would no longer speak to, nor correspond with the broker. It is obvious that his only interest is in earning his commission and hence, he is putting all the pressure on you.

The end result is that he has your money and is, at least arguably, not able to deliver it VAT paid, as specified. He can choose to ignore the demand letter and pay it to the foreign owner, but he does so at the risk of losing the 50K plus interest, plus costs if you succeed in the inevitable law suit which will follow. Once he feels the threat that the 50K he is handing over to the vendor may end up being HIS money, lets see if he doesn't prefer to return the money and take his chances with the vendor (who may or may not choose to sue - lets face it, he isn't out of pocket any money).

Deals fall apart all the time - he knows it, as should the vendor. I suspect that if the broker obtains legal advice, his own lawyer is apt to advise him NOT to turn over the money to the vendors as there is a justiciable issue concerning whether the vendors have satisfied the conditions of the offer.


Brad
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Old 08-03-2011, 07:20   #23
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Re: Purchase Deposit Threatened

You really need to talk to an attorney. Internet legal advice is worth exactly what you pay for it... NOTHING!
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Old 08-03-2011, 07:23   #24
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Re: Purchase Deposit Threatened

The advice from Brad sounds good. Any advice on how I find a suitable lawyer in Germany?
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Old 08-03-2011, 07:29   #25
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Re: Purchase Deposit Threatened

well advice on VAT from non europeans, is less then nothing. I am merely giving you an opinion based soley on the information provided. It helps to inform oneself as to the various options and opinons that might exist. Then at least sitting down with a lawyer is easier as you know what questions to ask.

Remember most non-business and especially non EU people have no clue as to the inter country complications and VAT rules that overlay this. Even giving instructions to your lawyers can be very difficult as I take it that you are not living in either Germany or Italy. ( I presume). Secondly any "attorney" ( a US term) will need to hire specialised inter-EU tax specialists ( are you getting the cost structure here!). Then there could be acton in third party legal countries, which requires instructing a local legal firm. ( including depending on the scale of the actions, senior/junior counsel etc) Beleive me, you dont want to go down this route if you can help it.

Again I would meet the lease company first. They are the key. ( thats assuming you want to actually proceed to buy the boat). Next seek local leasing, thats if you want to retain a financing option or thirdly just buy out the lease. ( which is the normal way)

As I said be careful of just running down the legal route, this is a very specialised field.

Dave
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Old 08-03-2011, 07:39   #26
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pirate Re: Purchase Deposit Threatened

Question....
with previous boats have you ever insured with Panteneaus...
if you've been a regular client they may be able to advise you regarding suitable lawyers in Germany... or maybe even if you have not...
They were a great help to me at a time when I was uninsured but.... I'd had a good 'History' with them they offered me some unofficial back door advice that saved me from a 100% loss... they won a loyal rep with that helping hand.. no... I'm not on the payrole just pass on my thumbs up for a good company
They are a primarily German company so will know any ins and outs that apply...
If your in the UK look up the number of their Plymouth office and give them a call.. explain the situation and ask for recommendations...
Whatya gotta lose...
Could even ask about cover after you've got the boat... incentive...
Should add... Goboating knows his onions... I'm just a 'seat of the pants guy' who like to get him going sometimes.... lol
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Old 08-03-2011, 07:42   #27
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Re: Purchase Deposit Threatened

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The advice from Brad sounds good. Any advice on how I find a suitable lawyer in Germany?
Paul if you live in Germany and speak German, then use a Gemran lawyer. However if you live in another EU country, then engage a local firm to you . Make sure they are commercial lawyers, not criminal lawyers or joe soaps that defend the local traffic violations. It would be best to use a firm with divisons or connected to a firm in Germany. Your local lawyers will then review the case with you , examine whatever paperwork there is and more then likely give you a reccomendation. Thats what I would do. If they feel it useful to rattle the brokers cage, they will instruct a German local firm.

Dave
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Old 08-03-2011, 07:54   #28
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Re: Purchase Deposit Threatened

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Originally Posted by goboatingnow View Post
Paul if you live in Germany and speak German, then use a Gemran lawyer. However if you live in another EU country, then engage a local firm to you . Make sure they are commercial lawyers, not criminal lawyers or joe soaps that defend the local traffic violations. It would be best to use a firm with divisons or connected to a firm in Germany. Your local lawyers will then review the case with you , examine whatever paperwork there is and more then likely give you a reccomendation. Thats what I would do. If they feel it useful to rattle the brokers cage, they will instruct a German local firm.

Dave
Myself I'm the lawer and I can tell the way Dave suggested is really only way to go - if You decide to bring the case to the court. You just can not deal with this from outside the country just with the help of German lawyer. But first try to disscuss the matter with the lease company - their position is the key for the whole situation. Legal proceedings always are quite expensive way to solve the problem.
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Old 08-03-2011, 07:58   #29
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Re: Purchase Deposit Threatened

Dave,
Your advice again sounds very sound. I personally live in Britain! I have just had a long phone call with the broker who seems honestly concerned. I rather suspect that he sent me the email threatening enforcement of the contract and the taking of my deposit as a means of pushing me into accepting the extra 42.000 euro cost of the VAT. I hold my breath. It might all yet turn out OK!
Regards,
Paul
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Old 08-03-2011, 08:06   #30
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Re: Purchase Deposit Threatened

Thanks too Doublewhiskey! Yes, this clearly looks like a legal minefield. I still very much hope to get an acceptable outcome and buy this boat. I have again approached the leasing company to search for possible options. It may also be that I can get out of this contract if the leasing cannot be sorted, by means of the lettout allowing only ten days for the seller to put right problems on the boat after the Completion date. This period has now passed but problems remain!
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