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Old 08-03-2011, 08:10   #31
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Re: Purchase Deposit Threatened

Great,as severfal including I have said, if you still want to buy the boat, look to resolve it without the lawyers getting involved. Thats just pi33ing money down the drain.

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Old 08-03-2011, 08:16   #32
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Re: Purchase Deposit Threatened

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Originally Posted by goboatingnow View Post
Great,as severfal including I have said, if you still want to buy the boat, look to resolve it without the lawyers getting involved. Thats just pi33ing money down the drain.

Dave
As a lawyer I can only support this opinion
The problem - if You still want to buy this boat - should be resolved with the lease company. For this You do not need a lawyer - but You may think about contacting professional financial advisor, at least for consultation.
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Old 09-03-2011, 06:06   #33
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Re: Purchase Deposit Threatened

The story moves on. I think I have solid grounds to cancel my contract and that is what I have requested. I still however want to buy the boat and have made an approach to the lease company, as has been suggested. I am also in dialogue with the owner, the broker and the Managing Director of the Brokerage network to which he is affiliated, with a view to cancelling the old contract and putting in place a new one. I have also (thanks Doublewhiskey) made an approach to the Handelskammer in Bremen, where the broker is based. Hopefully, we will reach a good conclusion out of all of this and my wife and I will sail off into the sunset in this boat! Thanks again to all who have offered advice. I will provide updates on how the story develops for those who may be interested. Paul
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Old 09-03-2011, 06:28   #34
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Re: Purchase Deposit Threatened

Now - The questions I'm going to ask are probably going to be very stupid... but here goes:

My understanding is:
1 - The VAT is on the LEASE, and if the LEASE is cleared, then VAT needs to be paid on it. This is because of a French tax avaoidance scheme the boat is tied to (post1)...
2 - You can't take over the loan, because although you clearly have lots of money saved, you have a low income,

Is my understanding correct? If so, then why:
1 - is VAT payable only on a full payment, and not on the installment payments?
2 - can't you get a trusted buddy to secure the loan for you in his name?
3 - can't you put up your mega savings as collateral to get the loan approved?

I'm sure I must be missing something obvious here, like a tree in a forest...
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Old 09-03-2011, 07:31   #35
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the broker who seems honestly concerned

Now that the explanation of the VAT being on the lease is a little clearer, I would be surprised if the broker had not known about this from the outset - unless he is relatively new. Surely a broker in a nearby country would be on top of these issues. And you can be sure the owner did know about it.

I would just be prepared for the fact that the broker may not be as "honestly concerned" for your welfare as he makes out.

Stepping back for a minute, put yourself in the owners shoes. Maybe he had not intended for this, but once presented with an opportunity for someone else to pay his VAT liability he is not letting it go easily. He would see himself as having the advantage in the bargaining, and would probably be best off to negotiate a settlement rather than lose the sale.

So your position may be enhanced by letting the interested parties think this has soured your opinion of the boat and you want nothing more to do with it. The failure to resolve some defects in time is your lever here, even if may be hard to enforce. Once the issue is resolved and the contract agreed to be broken, you can then restart negotiations afresh.

And as suggested by Southern Star I would be making the broker very nervous about handing over that money to the owner.
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Old 09-03-2011, 09:55   #36
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Re: Purchase Deposit Threatened

Thanks Steve, that was my point. I was not suggesting that Paul commence legal action (which, lets face it, will be very expensive and time consuming), only that:

1. he assume that the broker is more interested in his commission than he is in Paul getting what he bargained for (his initial response tends to suggest that);
2. that he stop conversing with the broker: if an action is eventually required, verbal communication with the potential defendant at this point may not be the wisest course and Paul should receive advice in that regard; in any event, it makes it clear to the broker that you no longer trust him.
3. that instead of communicating further with the broker, Paul have a lawyer send him a demand letter for the termination of the contract and the return of the deposit.

I agree that the 'legal advice' one receives on this (or any forum) is worth precisely what you pay for it; indeed, where legal issues arise I always suggest (as here) that people consult with a lawyer. My advice/suggestions here are not legal, but rather, strategic in nature.

For strategic purposes, IMO retaining a lawyer in your own country so that they can retain counsel in Germany would be not only premature, but foolhardy. Some basic advice and a lawyer's demand letter should not cost you a fortune. I believe that a letter from a commercial lawyer (even one who is not an expert in VAT) in Germany is apt to be more effective - it is, afterall, where the broker does his business (and the broker is not apt to know the areas of this lawyer's expertise).

The demand letter is intended to (and I suspect will) turn the heat up and make the broker (and in turn the vendor) realize that you are taking this seriously and are not going to be a patsy. It will also make them realize that you are not the only one at financial risk.

If that is accomplished, as Wanderlust suggests, I am confident that you will find yourself in a better bargaining position. We know you want the boat, but negotiations can be like a game of cards - sometimes you have to bluff. Simply put, you don't want them to know how much you want it; it strikes me that by pursuing solutions on your own with the leasing company and continuing pleasant and even hopeful relations with the broker, that is precisely what you are doing.

Your choice, my friend. I guess the issue is whether your desire for this boat is so great that you are prepared to negotiate softly and carry a flaccid stick.

Brad
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Old 09-03-2011, 10:28   #37
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Re: Purchase Deposit Threatened

PS, I should also note that Goboatingnow is probably correct that advice from a non-Europeans on VAT is worth less than nothing (which presumably is the value of his 'free' advice on the subject). However, I am unsure how that helps us (or more to the point, you).

Indeed, I suspect that you do not need legal advice on VAT as much as you need advice on the contract that you entered into - and whether it gives you an out in all of the circumstances (and again, even if only for a negotiating position). I didn't think it was your intention to take on the governments involved on the tax issue, but rather to see if it is you who will have to pay for it, or whether the vendors can be made responsible under the terms of the contract. But by all means, although this is advice from a non-european, if it is your intention to take on the government(s) concerning the VAT that is apparently payable, you should be retaining experts in that field, likely initially with one in your home country who can then potentially retain lawyers in Germany and Italy.

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Old 09-03-2011, 10:54   #38
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Re: Purchase Deposit Threatened

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Originally Posted by paul_doolan View Post
The story moves on. I think I have solid grounds to cancel my contract and that is what I have requested. I still however want to buy the boat and have made an approach to the lease company, as has been suggested. I am also in dialogue with the owner, the broker and the Managing Director of the Brokerage network to which he is affiliated, with a view to cancelling the old contract and putting in place a new one. I have also (thanks Doublewhiskey) made an approach to the Handelskammer in Bremen, where the broker is based. Hopefully, we will reach a good conclusion out of all of this and my wife and I will sail off into the sunset in this boat! Thanks again to all who have offered advice. I will provide updates on how the story develops for those who may be interested. Paul
Paul, I am glad to hear that the contingencies you set up at the beginning of the negotiations will allow you some leverage to sort out this VAT surprise.

Just remember, your Escrow Deposit is a “good faith” commitment that you are a serious potential buyer. That vested interest does not mean you must buy the boat if your become aware of additional defects or added purchase costs.

Hold on to the very defensible position that: … the condition of the boat no longer appeals to you at that added purchase price

Having worked with shipyard contracts in Germany, I was pleased to see that German Law is heavily weighted on Intent.

The German broker and finance company will know that the terms of the Escrow will favor the buyer and they should be motivated to continue negotiations

Lesson learned from this is that;

a vested buyer should always protect himself with a “walk-away” clause if the boat fails to meet expectations, or the selling broker does not fully disclose the total cost of purchase.
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Old 09-03-2011, 11:42   #39
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Re: Purchase Deposit Threatened

Good advice Pelagic and, of course, any legal advice received, or demand for the return of his deposit should obviously refer to all possible breaches of the agreement and not merely the issue of the VAT.

Brad
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Old 09-03-2011, 12:38   #40
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Re: Purchase Deposit Threatened

Paul:
Good luck with this. I'm sure you know this but in the States we have a saying "you can catch more bees with honey then vinegar." So hold firm to your position that the boat is no longer in contract b/c they have missed certain deadlines but offer up that you would like to sign a new contract to get the boat back in contract. From there form a contract that spells out "exits" if you can not accomplish the hurdles that you are trying to clear now. I see the hurdles as 1) An impartial holder of the deposit, 2) VAT, 3) Financing, and 4) condition of the boat. I may have missed some b/c I read this quickly. If any of these hurdles are not cleared in the time frame described you are to be given your deposit back. It seems to me that the ball is in your court on this one but you need to strengthen your position by creating a new contract.
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Old 09-03-2011, 16:29   #41
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I've no wish to continue commenting on this.

Presumably the boat was offered at a price and the boat if bought at whatever agreed price the seller would clear the finance ( and the VaT on that finance). This would be normal and not at all unusual.

What is very unusual is for the buyer to propose to " take over" the lease especially a third country lease. The likelihood of one bring accepted is virtually nill. There's no doubt this makes the sale unusual

There's no VAT issue here irrespective of who owns the boat the lease VAT is an intrinsic part of the lease cost. It can't be mitigated.

Remember there are now two sales here. The sale of the boat , which the broker is representing and the " sale " of the lease. We don't know how that was " advertised" or who represented it. Bear in mind that very few buyers want to " buy" the finance nor is it clear why you would want to either.

Sorry Paul. Not wishing to pry , but just reading the discussions.

Again if you wish to buy, it's merely a matter of 're engaging from a position of strength ie you're the person with the money.

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Old 10-03-2011, 01:34   #42
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Re: Purchase Deposit Threatened

So much advice! I clearly now see that I was rash and rather stupid to be so ready to sign a contract which included a loan clause. I simply trusted the broker when he assured me that the loan transfer would not be any problem. There was no suggestion of any VAT liability if it proved not to be. My repeated requests for proof of VAT payment and transfers of Registration from Germany to Britain were simply waived away as being non issues that would be readily sorted in due course.

The route I am taking is to insist on the cancellation of the existing contract followed by the setting up of an alternative contract to buy the boat along the lines that I thought I was getting. By this means, both owner and broker have an interest in helping me. The Managing Director of the Multihull World Brokerage Network is now also on the scene helping.

I think I have good grounds for cancelling the contract. The words in the contract seem to be very clear in achieving this. If the boat has not had any defects identified by the buyer fixed within ten days of the handing over date, he can cancel the contract. My surveyor found a major defect and that will take a further two weeks to fix. We are already past the ten days.

The loan is for 10,000 euros per month. I guess that one would need to have an annual income of half a million to justify a boat loan like that! The loan company provide very little response to me. It may be the language problem!

I will certainly consider the advice to get a letter from a German lawyer if the contract is not cancelled soon!

Thanks to all again. Paul
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Old 10-03-2011, 02:38   #43
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Re: Purchase Deposit Threatened

My 20 cent. I am from Hamburg Germany and i know the broker from several discussion in the past when i was considering a multihull. meanwhile i bought a monohull via another broker last year and had some VAT issues also.
First of all cat sale has a good name in the region here and it should be possible to talk with the broker in a decent way BUT brokers in general are a certain breed in Germany because they are reliable for nothing . Same goes for real estate broker they get paid 6 % just for giving you the adress of the seller...

I bought the boat partially with a mortgage on my house which was easy and no VAT involved at all. Lease is not possible for boats in germany and i am sure that the broker has no clue about a french lease system in detail. As discussed earlier the VAT respond to the lease and not the boat.

I would not like to deal with a french loan in germany because it is impossible to 100% understand the contract ( even my wife speaks good french) I would recommend to offer to pay the full amount for the boat and would try to use your own (hometown ) financing. The owner can pay off the loan with all the add. cost involved by himself after he received the full payment from you ( via escrow account)

reg escrow account: to my understanding a escrow account can only be safe with a german " Notar" / notary public. I have used this for all my real estate transaction because it is mandatory in Germany. This Notar will be 100% responsible for the account and money transaction based on written contracts. For such amount i recommend you will lateron went to a Noatr in Bremen with the broker and he will read the contract to both of you , he will open the account and will pay to the parties as stated in the contract. Such notar is public registerd and def. safe and trustfull in germany. An escrow account with a broker first means nothing, although a good broker will handle all money via such NOTAR only. Ofcourse he will charge you some 1-1,5% but you will be safe and you can state payment terms in the contract like xx payable after delivery, after recpt of title, after receipt of statement that VAT in Europe has been paid, after recpt of CE declaration etc.
good luck Carsten
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Old 10-03-2011, 02:47   #44
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Re: Purchase Deposit Threatened

Many thanks Carsten. The problem with the owner keeping the loan is that he is buying another boat from the US and he plans to take out another VAT avoidance loan on that boat. You can only operate one such loan at a time. 1-1.5% on a 700.000 euro contract seems an awful lot to pay for the involvement of a Notary. Paul
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Old 10-03-2011, 02:57   #45
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Unless for some strange reason you want a loan, just deal to agree a price , pay it and let the owner release the finance. Make sure the lease company rep is present when money is transferred so as to verify that the finance is cleared.

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