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Old 06-02-2012, 06:16   #16
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Re: Should a Broker Disclose A Hurricane Damaged Boat?

To answer the original question -- YES!

My prior boat was purchased as a storm-damaged boat. It was represented as such by the broker and I paid accordingly. I had about $20k worth of fiberglass work done, including hauling/transport and additional cosmetic work. I disclosed the history of the boat when I sold it including the repair work that was done (how and by who). In the end I used it 3 years and made money on it (if I ignore the value of my own time).
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Old 06-02-2012, 06:27   #17
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Another point is that a US Documented vessel that is an insurance loss will have a mention placed on the title. So if a broker / owner does not disclose the fact, it will be found out anyways during closing. That is if not during survey when usually some obvious anomalies will be found. Not disclosing any faults including hurricane damage in a known yacht is simply a waste of tme for all parties involved. RJ
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Old 06-02-2012, 06:51   #18
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Re: Should a Broker Disclose A Hurricane Damaged Boat?

I listed Ocean Girl with my broker Kent Little @Little Yacht sales, it was two years after IKE. along with the normal contract he also required me to fill out and sign an IKE form, it gave me the opportunity to disclose any damage done during IKE, including flooding, and any repairs.
Kent said the IKE disclosure form was something he had to do because an owner did not relay to him BIG stuff like sinking :-). Some brokers do take their reputation seriously.
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PS
OG didn't get any damage during IKE, just melted lines.
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Old 06-02-2012, 07:07   #19
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Re: Should a Broker Disclose A Hurricane Damaged Boat?

Good posts...I would have no problem buying a damaged/repaired boat unless it wasn't disclosed early on.....otherwise would make me suspicious of what's being hidden?
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Old 06-02-2012, 08:25   #20
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Re: Should a Broker Disclose A Hurricane Damaged Boat?

As the broker is the agent of the vendor, he does not owe any duties to the purchaser, except the duty not to misrepresent the facts. The broker can, however, be liable to the purchaser for misrepresentation of a material fact.

If he knows, he should disclose.
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Old 06-02-2012, 09:56   #21
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Re: Should a Broker Disclose A Hurricane Damaged Boat?

+1 DOJ... Gord is correct also, if the broker knows through his own investigation, surveyor report, comment by seller, etc., I believe he is ethically and perhaps legally bound to disclose deficiencies he might be aware of. If the defect is not obvious or not known, then buyer beware but no foul.
The financial chicanery that some brokers get up to is a whole different issue, however, and place the whole industry in a bad light. It would help if there was more publicity about decent brokers who look after both the buyer and the seller in the transaction.
I've met some really decent, honest folks in the boat brokerage business but also have run into some real losers who did not help either the seller they represented or prospective buyers. Capt Phil
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Old 06-02-2012, 09:59   #22
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Re: Should a Broker Disclose A Hurricane Damaged Boat?

Ethically, yes
Legally, don't know.
Will they? I don't think most brokers would.
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Old 06-02-2012, 10:19   #23
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Re: Should a Broker Disclose A Hurricane Damaged Boat?

By legally I was referring to State licensing laws like the ones they have in California. As I understand the law, it is similar to real estate brokers representing sellers being required to disclose known deficiencies to prospective buyers before the sale is consumated. Perhaps someone with direct knowledge of the legal requirements which boat brokers work under could comment... Capt Phil
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Old 07-02-2012, 06:06   #24
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Quote:
Originally Posted by Capt Phil
By legally I was referring to State licensing laws like the ones they have in California. As I understand the law, it is similar to real estate brokers representing sellers being required to disclose known deficiencies to prospective buyers before the sale is consumated. Perhaps someone with direct knowledge of the legal requirements which boat brokers work under could comment... Capt Phil
There was a seminal case a year or so ago here in S FL involving a sold vessel found to be structurally deficient during the delivery from FL to The NE. A six figure judgement was set against the brokerage for negligent misrepresentation This case is a precident for legal cases involving disclosure / gross neglect in yacht sales. Link: http://articles.sun-sentinel.com/201...my-yacht-sales
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Old 07-02-2012, 06:17   #25
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Re: Should a Broker Disclose A Hurricane Damaged Boat?

I could tell a few stories, but I know a guy who buys boats out of Insurance sales, mostly victims of hurricanes, ships them to a certain place to be repaired and re-sells them later on. I have seen his repair-facility and I think his repairs to be topclass. But he IS telling to prospect buyers the boat's history so one knows what one buys.

About brokers: same category as horsedealers & second hand cardealers. An honest one is just as rare as a honest politician.
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Old 07-02-2012, 08:35   #26
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Re: Should a Broker Disclose A Hurricane Damaged Boat?

Thanks for the cite, Richard. I would think that after the recent shake out of brokers more interested in fast sales and listings due to market conditions, those who are left are the ones who are principaled, ethical and looking for a win/win out of every sale. If a broker knows of a serious deficiency I would think he is bound to share it with the buyer, and the seller, if unaware of it, who makes the decision if the price should reflect that deficiency. If neither the broker or seller is aware of the problem, then caveat empor rules. I sold a fairly large boat several years ago and during the sale process it was discovered that there was a piece of the wooden mast that was suspect. I wasn't aware of it nor was the broker but it turned up on survey. I gave the buyer the option of reducing the price or having the problem addressed to his satisfaction before he took possession. He elected to have me repair the mast and while we had the stick pulled he rewired and replaced the mast head instrumentation himself. We both ended up happy and remained good friends for years after the sale.
The ethical manner in which MacG's broker handles hurricane damaged vessels sounds like a model for brokers to follow. The ill will generated by a broker who tries to be less than forthcoming on boat condition and history doesn't deserve to stay in business IMO. Capt Phil
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Old 07-02-2012, 08:58   #27
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Re: Should a Broker Disclose A Hurricane Damaged Boat?

Quote:
Originally Posted by MacG View Post
About brokers: same category as horsedealers & second hand cardealers. An honest one is just as rare as a honest politician.

Sadly that has been my experience as well.

The bottom line though is unless you are buying a brand new boat, the boat will have existing problems, that is why it is being sold.

You buy the best boat you can find, at the best price you can get, and plan on repairing the things that WILL break.
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Old 07-02-2012, 09:19   #28
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Re: Should a Broker Disclose A Hurricane Damaged Boat?

One of the reasons I bought Miss Scrapheap. Lot's of fun building her up. The final paintjob will follow in May.

One thing: there are brokers you may trust. Who will survey the boat first by an impartial surveyor prior to putting her on the market. They present you the surveyor' s report so you know the main problems of the boat. Of course there are items a surveyor cannot check. But the big issues he will find.
No yachtsale of importance will go without surveyor and the one of the insurance company. But there are (a handful though) brokers you can reasonably trust.
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Old 07-02-2012, 11:44   #29
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Re: Should a Broker Disclose A Hurricane Damaged Boat?

Yes, and to ensure they do you need to ask questions.

Good Faith is well defined in law and so are the expectations of those deemed to have expert knowledge. Fairness is arrived at by leveling the playing field between the expert who knew or should have known and the public, buyer beware doesn't always wash.

Disclaimers mean very little, it is the first line of defense for a broker to avoid responsibility of what should have been disclosed and was not, usually due to their negligence in due diligence.

Your "as is" sale needs to be made clear on the sales contract.

You too have an obligation to proceed with your own due diligence, that which a prudent person would perform under similar circumstances, there is no free ticket for being naive.

Deals that include any hold harmless and indemnification verbage should be reviewed by your attoney if there is significant money involved, it will not be drafted to your benefit.

Withholding information that reasonably effects value may well be construed as fraud, regardless of contractual agreements, as misrepresentations. Since the seller may be required to report to the broker any deficiences, the seller can also be held liable if such issues were not described. Someone who has obtained an asset and has not reallt utilized the property for which it was designed will not generally be held to disclosure standards unless they are obvious. If you buy a boat on ebay and flip it to a broker, never having seen the boat, you'll not be as responsible as if you had sailed it for five years.

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Old 07-02-2012, 12:01   #30
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Re: Should a Broker Disclose A Hurricane Damaged Boat?

That a broker is always the broker of the vendor is not always the case. Sometimes and I can name a few, they are buying boats up - preferably from freshly widowed ladies - and selling them later on for a significant higher number.

There is a very well known yachtbuilder/brokerage in Holland and with them I advice strongly to bring your lawyer with you. For obvious reasons I cannot call names but they have already a 'name' in the business. There are some real rogues in this business.
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