Question about Boat Surveys

[sailpower]

Originally Posted by valhalla360

You misunderstand. Allowing a contingency based upon survey and sea trial is very reasonable assuming the issues found were not readily obvious and the seller didn't inform the buyer before the offer was accepted.

It's the idea that the buyer can walk away for any reason even if the boat is in perfect condition and exactly as advertised that is a contractual problem. If you want that right as part of the contract, I'm going to want the right to sell to someone else if they show up with cash even though I accepted your offer because you didn't commit to purchase.

I could care less what some fool with the Florida brokers association came up with. With an "any reason" clause for the buyer, you effectively do not have an offer.

So how would you word it? Who would get to decide what is reasonable?

[valhalla360]

Originally Posted by vjm

I actually think there is a very strong argument to be made that such a vague term, which is undefined in the industry, makes the contract unenforceable.

If you get into tort law, there really is no such thing as an unenforceable contract. Clauses may be unenforceable but very unusual to completely throw out a contract. Once the process starts, there typically isn't a way to throw out the entire contract without damaging one or both parties unfairly. If it gets to the point of getting a judge (or arbitrator) involved, they will make a decision first on what is clearly stated in the contract and where it gets ambiguous, they will make a decision based on what they feel is reasonable.

In reality most of contract law happens outside the courtroom. That's why the deposit is critical. It is the commitment that the buyer will follow thru. If they don't follow thru without good reason, you can retain the deposit until a solution is found (possibly forever if they are completely unreasonable). If the buyer can walk away for any reason, the deposit serves no purpose as you will never have justification to retain the deposit.

[skipmac]

Originally Posted by sailpower

So how would you word it? Who would get to decide what is reasonable?

Well according to Valhalla, the seller would have final say so. If the buyer doesn't agree then they hire lawyers.

Sounds like a great plan to me.

[Dave22q]

I'm with those that say the seller does not need additional protections. In my experience only serious buyers take the time and spend the money to go with a survey. Even if the buyer's situation changes and he backs out for what may seem trumped up reasons you are unlikely to get any buyer to sign a contract so rigid as to prevent it. I would not waste time trying for stronger provisions. I would want a clause giving me a copy of the survey if the sale does not go through. That should be unobjectionable as it costs the buyer nothing.

[valhalla360]

Originally Posted by skipmac

Well according to Valhalla, the seller would have final say so. If the buyer doesn't agree then they hire lawyers.

Sounds like a great plan to me.

Complete misrepresentation of what I said:

Both get to decide. If they agree, great move on. If they disagree, you talk and negotiate. If you can't come to a solution between you, yes, it's time to call in the lawyers.

Reality is the talk and negotiate part is where it typically ends but to give the buyer the nuclear option, makes no sense.

[Manos1955]

I will stay to your statement"it is too good to be true" which usually is exactly what happens.
Number two I wouldn't trust a surveyor doing the job alone I would ask to be present or at least someone I know and trust to be present.
Better be careful than sorry

[vjm]

Originally Posted by valhalla360

If you get into tort law, there really is no such thing as an unenforceable contract. Clauses may be unenforceable but very unusual to completely throw out a contract. Once the process starts, there typically isn't a way to throw out the entire contract without damaging one or both parties unfairly. If it gets to the point of getting a judge (or arbitrator) involved, they will make a decision first on what is clearly stated in the contract and where it gets ambiguous, they will make a decision based on what they feel is reasonable.

In reality most of contract law happens outside the courtroom. That's why the deposit is critical. It is the commitment that the buyer will follow thru. If they don't follow thru without good reason, you can retain the deposit until a solution is found (possibly forever if they are completely unreasonable). If the buyer can walk away for any reason, the deposit serves no purpose as you will never have justification to retain the deposit.

Oh, I'll alert the professor that taught my contracts class. He can just delete that whole part of the syllabus.

[Fishman_Tx]

I know I'm singing to the choir here, but just my impression as we're still in the purchase process. We've bought in Florida and now in Virginia.

The contract is normally a "promise to purchase" unless a failure of "buyer specified contingencies within the contract" occurs as well as the sellers "promise not to sell to another" during the buyers execution of his "contractual due diligence" and is time limited to protect the sellers rights. There is no "one way" to do it. A broker or an association of brokers may have a standard contract they prefer to employ, but there is not necessarily law or other that specifies "required" contingencies. Yes, there are accepted standards in use but that is not the final word unless and without the backing and behest of law in a particular state.

Our contract was "30 days, no deposit, purchase based on boat condition and acceptable result of a marine survey and sea trial". Everyone that has ever bought a boat can attest that the pictures advertised and the survey mean diddly squat UNTIL YOU PUT YOUR EYES ON THE BOAT and crawl around the spaces. Only a moron buys a "pig in a poke" and most know that pictures do not do justice to reality. This boat looked great in the pictures AND it passed a survey AND a sea trial, BUT we get on site and the boat looks old and run down with Durabak slopped all over and the ablative peeling off in chunks because they didn't barrier coat or prime. NEVER NEVER EVER trust ONLY the result of a survey. Every surveyor we ever hired was a schmuck and gave a piss poor report and 99% won't climb the mast. This last one claimed everything was wired to ABYC spec and was so far from the truth as to be ludicrous. Wiring was hanging everywhere and some equipment ran straight to the batteries and not through the panels.

Thankfully, those were the only real problems, but the idea that a contract prevents one from bailing on a purchase and lose a deposit due to "buyers impression" or should I say "I don't like the looks of this boat" would be idiotic. Who would choose to make such a contract?
Only an idiot. It's all a matter of choices.

JMHO

[Cheechako]

Originally Posted by valhalla360

Unless the seller made a huge mistake agreeing to the terms of the contract, you do need a reason to back out or you risk the seller hanging onto your deposit.

Of course, there is always something that shows up in the survey you can use as a reason.

To the original question, the survey is yours to do with as you please.

Your "reason" is that you reject the boat based on inspection sea trial and survey.
I would be careful about wording in some contracts now days though, there seems to be some confusing language about "repairs" etc. On one I wrote in by hand to clarify that "buyer reserves the right to reject inspection, sea trial and survey for any reason"
It seems some contracts now mention sellers "option to repair". Just reject that clause entirely. Cross it out and initial it.

[skipmac]

Originally Posted by valhalla360

Complete misrepresentation of what I said:

Both get to decide. If they agree, great move on. If they disagree, you talk and negotiate. If you can't come to a solution between you, yes, it's time to call in the lawyers.

Reality is the talk and negotiate part is where it typically ends but to give the buyer the nuclear option, makes no sense.

Here is what you said,

Standard contractual issue. Once the seller has the buyers reason, they make a determination if it's reasonable and respond to the buyer.
- If they agree, that it is a reasonable issue, you renegotiate.
- If they disagree, the buyer might back down.
- If they disagree and the buyer doesn't back down and the seller doesn't back down...it's off to court to let a third party decide.

So once the seller has the buyer's reason, "they" make a determination if it's reasonable. Obviously the buyer already thinks it is reasonable since he/she gave that reason, so the seller has de facto power to veto the buyer's reason.

So the buyer is forced to accede to the seller's demands or go to court.

[sailpower]

Originally Posted by skipmac

Well according to Valhalla, the seller would have final say so. If the buyer doesn't agree then they hire lawyers.

Sounds like a great plan to me.

I would like to see what contract language he would consider acceptable particularly as he said that he just did one.

[meirriba]

I have surveyed a boat where the parties agreed that any fault/faults reported by me that were not disclosed beforehand by the seller and that their combined cost of fixing were over X% percent of the agreed price will be either a dealbreaker or a discount ( the oustanding sum over X only).
The buyer had the right to choose beteeen the options.
After survey I got quotations ftom 2 boatyards to fix the issues found and the deal was made.

[reed1v]

Normally the survey is the private property of whomever paid for it. Usually it is not shown to the seller. Estimated boat price is rather meaningless. Surveyors usually go with replacement value or upper end of market value since the survey often is attached to a loan application to finance the boat. Lenders want to see an estimated value above what they are being asked to finance.

Go to BUC or other boat value sources and see what the current actual selling prices are for the boat you are interested in. Bet the values are well below the survey estimate, and probably well below what you have agreed to.

[denverd0n]

Originally Posted by skipmac

So the buyer is forced to accede to the seller's demands or go to court.

Exactly. And no knowledgeable buyer is ever going to agree to such a ridiculous arrangement. I mean, obviously the seller has a very strong incentive to insist that ANY "reason" provided by the buyer is not acceptable to him. How is that in any way fair?

But it doesn't really matter if it is fair or not. As I said, no knowledgeable buyer would ever agree to a contract like that. So, anyone who wants to can write a clause like that into their contracts, and they may very well sell boats doing so. But they are severely limiting their pool of prospective buyers, to only those who are NOT knowledgeable! If they're happy with that limitation, more power to them. It won't affect me, because I will NEVER agree to a contract like that.

[CarlF]

While the OP doesn't have to show the survey to the seller, he will have to show it to his insurance company (or a new survey after his restoration).

They'll require proof that any significant problems noted in the survey are fixed before they will insure.