Purchase Deposit Threatened

[CFR]

i maybe miread something. so i understood you will not take over the loan but only have to settle it. so it is easy offer your price and owner should handle the loan closing. now only the 42000 euro will be a topic to be considered by owner, broker and you

[paul_doolan]

Dave,
Since the finance company is based in France, I would have thought it very unlikely that I would be able to get a representative to be present and in any case, I would imagine that I will be signing the new contract (if we get that far) in England and just emailing it. I rather just thought that I would look to insist on an email or letter sent direct from the finance company to confirm clearance of the loan.
Thanks again for the input, Paul

[paul_doolan]

Yes, CFR. The only issue is an extra 42.000 euros. This is a lot of money still and because I feel that I have been intentionally misled by both the broker and the seller (I have lots of reasons for thinking this), I have no intention of going one cent more than the amount I had originally thought that I had agreed to pay. Paul

[goboatingnow]

Paul.

I presume you intend to pay only the sale agreed amount. The VAT on the lease is purely the owners responsibility however..

( a) you need to ensure that you receive a settlement letter from the loan company showing or confirming that the lease is settled and they have no "interest" in the boat. Because of timing issues this will not be done until you actually pay over that money. Hence you have to protect yourself. Either an ESCROW account is used or what I've done is travelled to the country and done a three way simultaneous swap. You bring two bank draft one for the agreed " settlement " figure on the lease. And the second for the balance of the agreed sale price. Typically the loan company has a physical rep, who receives the draft and furnishes the release letter and then you present the balance draft to the broker as he's the sellers agent. He then transfers the sale Documents. If there is language issues that notarised translations are needed.

Hence on completion you should have

(a) a bill of sale or a signed sales contract document

(b) a release letter from the lease company

(d) a copy of the original sales invoice showing clearly the VAt amount originally paid. This is not the lease VAT that's irrelevant

(e) a CE declaration of conformity. This is specific to the hull no and should be for your specific vessel

(f) if the vessel is on the Italian register. Then a deflaging cert.

Regards.

[CFR]

sure would do the same and let them solve the problem. buyer is king at the moment as so many boats are on the market. as long as it is only money it is easy to solve, better then dealing with a loan and bank in france.

[goboatingnow]

Originally Posted by paul_doolan

Yes, CFR. The only issue is an extra 42.000 euros. This is a lot of money still and because I feel that I have been intentionally misled by both the broker and the seller (I have lots of reasons for thinking this), I have no intention of going one cent more than the amount I had originally thought that I had agreed to pay. Paul

Paul as long as you did a deal based on an agreed total sales price that the fact that there is a VAT balance on the lease has nothing to do with you. The seller should have received a "settlement" figure to buy out the lease ( as some leases have penalties) the seller then factors that into the asking price. You shouldn't be exposed to this.

Dave

[boatman61]

All this is baffling me... its normal proceedure.. in my limited intelligence.. for all outstanding loans etc to be settled prior to taking ownership and final payment if its a brokered deal.... as opposed to two guys sitting in a pub exchanging cash for keys n papers... if not you walk away
The 'Lease' should not be your concern in any way... its the current owners agreement and... its down to him to settle out of the proceeds of the sale or... he discounts the amount from the price and you settle with the 'Lease' direct and a full one off settlement...
You have not had 'Full Disclosure' so any contract should be null and void...
Take your money and walk... no boats that good..

[goboatingnow]

Originally Posted by boatman61

All this is baffling me... its normal proceedure.. in my limited intelligence.. for all outstanding loans etc to be settled prior to taking ownership and final payment if its a brokered deal.... as opposed to two guys sitting in a pub exchanging cash for keys n papers... if not you walk away
The 'Lease' should not be your concern in any way... its the current owners agreement and... its down to him to settle out of the proceeds of the sale or... he discounts the amount from the price and you settle with the 'Lease' direct and a full one off settlement...
You have not had 'Full Disclosure' so any contract should be null and void...
Take your money and walk... no boats that good..

Usually the seller needs the proceeds to pay off the loan boatman.

No boatman that's not what should happen. Actually in this case all parties are being honest as the presence of a lease is being declared, mostly what happens is that the seller never declares the presence of finance and in most cases as you say settles the finance AFTER the sale. This exposes the buyer to a potential con. I usually get the buyer to specifically state in writing that the boat is free of all encumbrances, loans or Liens. ( I have a standard wording) it is never in the sellers interest to disclose finance.

In this case all parties are being above board. It is a very very common situation that in sales transactions the parties to the sale ( or their agents) sit around and simultaneously exchange money and documents ( remember house conveyancing etc). This is done to protect the buyer from things that the seller should do but doesn't do afterwards.

This is not a complex sale nor should the buyer walk away. It just he didn't understand the implications and jumped before thinking. Just back up and start again

Dave

[paul_doolan]

Thanks again Dave. I have printed the page with your suggestions for the terms of completion and I will certainly adhere to them. Paul

[goboatingnow]

Originally Posted by paul_doolan

Thanks again Dave. I have printed the page with your suggestions for the terms of completion and I will certainly adhere to them. Paul

Paul I should have added in the absence of a sales contract you should at a minimum have a letter signed by the seller that boat is " free of all encumbrances ,loans or liens or any kind. The owner further warrants that the boat is owned by him and he is free to sell it". Any solicitor will draw up a simple indemnity letter or better still a straightforward sales contract that includes this. Get the seller to sign it. ( you can get a notarised translation if necessary). Given the valve here is twice the cost of your average semi-D I'd either engage a buyers broker or perhaps a commercial legal firm. A broker acting for you would be wise. But all this is added expense.

Dave

[boatman61]

Originally Posted by goboatingnow

Usually the seller needs the proceeds to pay off the loan boatman.
Agreed...

No boatman that's not what should happen. Actually in this case all parties are being honest as the presence of a lease is being declared, mostly what happens is that the seller never declares the presence of finance and in most cases as you say settles the finance AFTER the sale. This exposes the buyer to a potential con. I usually get the buyer to specifically state in writing that the boat is free of all encumbrances, loans or Liens. ( I have a standard wording) it is never in the sellers interest to disclose finance.
As I do in the States... I go with the seller to his bank.. get the final agreement witnessed, signed and stamped by the manager and then part with the cash

In this case all parties are being above board. It is a very very common situation that in sales transactions the parties to the sale ( or their agents) sit around and simultaneously exchange money and documents ( remember house conveyancing etc). This is done to protect the buyer from things that the seller should do but doesn't do afterwards.
This I'm aware of... the debt travels with the boat till its settled

This is not a complex sale nor should the buyer walk away. It just he didn't understand the implications and jumped before thinking. Just back up and start again

Dave

Ok Dave... guess I miss read something....

[goboatingnow]

As I do in the States... I go with the seller to his bank.. get the final agreement witnessed, signed and stamped by the manager and then part with the cash

After all the worlds been through you trust " bank managers". LOL.

What do they know. In my part of the world bank managers will not sign third party agreements they have the stature of parking wardens.

Dave

[boatman61]

Originally Posted by goboatingnow

After all the worlds been through you trust " bank managers". LOL.

What do they know. In my part of the world bank managers will not sign third party agreements they have the stature of parking wardens.

Dave

Seems they're considered 'gods' over there... even been known to fly... briefly.
Know what you mean tho'... the one who dealt with my 'purchase' in New Bern did not know anything about international bank drafts/transfers... rofl... held things up for a coupla weeks... even tho' the funds were in a 'holding bank' in NY...

[mintyspilot]

If this was a business deal, I'd walk away from it. I would tell them that since conditions were unmet then I was cancelling the contract in accordance with the cancellation clause, demanding the return of all monies and deposits and, given the way this was handled, that I was no longer interested in the boat.

That would bring a swift response - they would either return your money or starting falling over themselves to negotiate. If they know you'll walk then they should be more inclined to deal. Either way yu would be in a much better position.

[hellosailor]

Let's see now...A French leasing company, an undetailed tax avoidance scheme, a German broker, an Italian builder, a British buyer, and several principals who have to date only proven that they are not quite completely aboveboard and open as to what the complete deal is.

And you're going to re-enter that quagmire a second time?! Good lord, that brings to mind the phrase "a glutten for punishment".

There's nothing unusual about simultaneous closings (which are always seuqential despite the legal fiction) and multiple parties, but when there are that many parties, tax schemes, leases and purchases and the laws of at least four nations to be involved, I can't see getting involved in that without some rather expensive international finance and admiralty lawyers being part of the process.

Relying on a broker, when there are so many issues and so many dollars (euros, pounds, whatever) and venues involved, just seems like a recipe for disaster.

Paul, I strongly suggest you get professional counsel involved to make sure all the contractual legalities are met and there are no further surprises. No matter how nice everyone is, all that you actually KNOW at this point, is that they all haven't been quite nice enough to give you a full picture of the complexities involved with this boat. There's a lot of money at stake, isn't there?

This almost sounds like a craps game, "Wanna roll for double or nothing?".
Awfully high stakes.