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Old 10-03-2014, 21:51   #1
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Need some perspective to navigate this cat purchase from Moorings in St Maarten

Hi, my friend has paid a broker in St Maarten for a catamaran for sale by The Moorings in Oyster Pond.

Here is the exact catamaran:
Details=

Details from the Moorings about progress on the agreed upon repairs from the survey were sketchy and frustratingly lacking in details from the Moorings so he decided to fly in and oversee them. He just arrived from the USA to oversee final equipment refits and take ownership, only to find the cat has been chartered and it is now scheduled to be chartered for at least 6-8 more weeks more according to the Moorings (who laughed off his inquiry about taking possession of his boat). Here is the deal: he paid for the boat a month ago. He had a survey and repairs from the survey were completed or being completed (according to the Moorings). He has equipment from local vendors ready to be installed (genset, water maker, lifeboat refit). Yet the boat is not there anymore and won't be available for some time.

His broker at Oyster Pond, "Gary", is acting very surprised. Maybe he really is, we don't know.

Sorry, but where do we begin to unravel this? What could have gone wrong and how do we fix this? The survey is no longer valid in my opinion, since the condition of the boat could be massively different by the time the charters are done. The boat was bought close to a month ago. Why did The Moorings in Oyster Pond charter it out after it was sold and surveyed? How could the broker ("Gary") not know what was going on and why did none of this get communicated before the new owner showed up to take possession of his boat?

I am looking for perspective on the events and even speculation on culpability to help my friend make sense of this fiasco. What would you do in this situation? Where did my friend make mistakes? What might have lead to this: broker not passing on the money? Owner got greedy? Moorings got greedy? My friend not understanding how this works?

As this unfolds I will keep this post alive with updates.

I appreciate your perspective. Thank you very much for your experienced help and opinion.

Zindar
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Old 11-03-2014, 02:52   #2
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Re: Need some perspective to navigate this cat purchase from Moorings in St Maarten

this is why you always check for "Encumberences" when buying a vessel!

if the PO has an existing charter contract with the moorings for X amount of charter weeks a year,and moorings is in possesion of the boat.........change of ownership will not nessacaraly invalidate the contract with the management company.

a bit like buyig a house with "Sitting Tenants" in it!
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Old 11-03-2014, 03:17   #3
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Re: Need some perspective to navigate this cat purchase from Moorings in St Maarten

just speculating here but here is how the moorings works.

The Moorings are able to sell vessels at a discounted price in return for "USE" of the vessel,under a charter contract,normally the vessel will remain "in charter" for aprox 5 years before the owner of the vessel can take physical possesion of the vessel.

need to check the fine print!,the vessel may still have YEARS to run on its charter contract!
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Old 11-03-2014, 03:44   #4
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Re: Need some perspective to navigate this cat purchase from Moorings in St Maarten

But here’s the real bonus: There are no operating expenses. Owners don’t pay for dockage, insurance, or maintenance; they pay only nominal fees for things like ice and water. And according to The Moorings, the financial benefits don’t stop at the lack of operating costs. Because during the time you’re not cruising your vessel, the boat is being used for charter, which means she’s generating income. Thus, you receive a guaranteed monthly stipend that, according to the company, should “exceed the mortgage on your yacht based on traditional financing.” In other words, you get paid to own the boat!

At a program’s end—most last for five to six seasons—there are three possibilities: You can negotiate a lease extension with The Moorings (offered at the company’s discretion), trade up to a new boat, or sell your vessel with the help of the company’s international brokerage division.

link here to the article,it gives a bit of perspective on what your friend might have bought!

THE MOORINGS – A REFRESHING TWIST ON YACHT OWNERSHIP | Oceanhomeguru's Blog
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Old 11-03-2014, 04:10   #5
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Re: Need some perspective to navigate this cat purchase from Moorings in St Maarten

The broker must have been aware of any charter contract prior to selling the boat and if he is surprised with the fact that the boat is out on a charter then the plot thickens.
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Old 11-03-2014, 09:07   #6
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Re: Need some perspective to navigate this cat purchase from Moorings in St Maarten

First of all Zindar, welcome to the forum. No one on this site can give you or your friend legal advice; if he is in St. Maarten, he should take his paperwork and speak to a lawyer.

One question is whether he purchased the boat from the Moorings, or from the original purchaser, listed by the Moorings. If the former, he cannot receive anything more (nor can he be sold anything more) than the original purchaser had to sell - ie., if it was still under contract with the Moorings, then I would assume (there's that awful word) that the sale would be subject to that contract. I must say, however, that if the listing agent was the Moorings, they certainly should have been aware of this contract and should have noted that the purchase was subject to a charter agreement and have provided copies. Regardless, he needs to speak with a local lawyer right away!

Brad
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Old 11-03-2014, 10:28   #7
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Re: Need some perspective to navigate this cat purchase from Moorings in St Maarten

In this part of the world, Most boats in charter do not come off charter till May.
So unless the boat has come off charter last may and been sitting idle i would not expect it to be available for a few months.

Is it Moorings brokerage? Or an independent broker? Moorings brokerage would know this and make it clear in contracts of sale.
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Old 11-03-2014, 13:29   #8
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Re: Need some perspective to navigate this cat purchase from Moorings in St Maarten

Thanks all. I have just heard from him and he told Moorings to get the boat back by the sales closing date or give him back his money. He seems to think that has the situation fixed. Apparently it sounds like the Moorings wanted to continue renting the boat but they and my friend have a sales contract stating the closing date and boat possession transfer.

If this does not go well I'll post back. Thank you for all of your input.
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Old 11-03-2014, 21:00   #9
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Re: Need some perspective to navigate this cat purchase from Moorings in St Maarten

Quote:
Originally Posted by Zindar View Post
Thanks all. I have just heard from him and he told Moorings to get the boat back by the sales closing date or give him back his money. He seems to think that has the situation fixed. Apparently it sounds like the Moorings wanted to continue renting the boat but they and my friend have a sales contract stating the closing date and boat possession transfer.

If this does not go well I'll post back. Thank you for all of your input.
zindar, please post no matter which way it goes. This is very interesting. I have been speaking through email (I met him at the last Miami boat show) to the person in charge of Moorings brokerage. I wonder if he reads cruisers forum?
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Old 11-03-2014, 21:26   #10
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. I suspect your friend was working with a yacht broker who doesn't have a lot of experience with selling yachts that are coming out of charter. The first thing I find out when a client is interested in a moorings/sunsail is when the boat is phasing out. It's a bit of a pain for the buyer because we can't close on the boats until it has finished its phaseout. Just out of curiosity who was your friend working with?
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Old 12-03-2014, 05:52   #11
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Re: Need some perspective to navigate this cat purchase from Moorings in St Maarten

Glad to hear it, although your first post now confuses me - you said he had already paid the broker for the boat. I gather you are referring to the deposit only, in which case they are clearly still entitled to charter out the boat until closing. As you pointed out, it does, however make the survey somewhat questionable. FLLCatsailor's point about having to wait until a boat has 'finished it phaseout' prior to closing makes sense; for the reasons noted, it would seem that the survey should also await the phaseout.

Brad
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Old 12-03-2014, 06:53   #12
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Re: Need some perspective to navigate this cat purchase from Moorings in St Maarten

This brings up a few interesting points.
I have a friend who just purchased a boat from a different broker 5 months before the Charter contract ends in May.
My understanding was (normally) that at the end of the leasing contract the boat would be surveyed and any damages during the lease period above "normal ware and tare" was the responsibility of the Charter Company. Now you sell the boat to someone, does this release the company from any damages prior to purchase? I'm guessing that there is no standard way this all happens but if there is any damage above the normal ware stuff is the charter company still responsible as long as the contract (original or new owner) is in place? Since there was no mention of the contract with the Charter Co. prior to sale then I would also say that a survey prior to purchase shouldn't release them from fulfilling their end of contract responsibilities.

Just wondering...

Steve in Solomons MD
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Old 12-03-2014, 07:33   #13
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What we do when putting one of these boats under contract is to have it surveyed within 2-3 weeks of the contract date. It is there that we establish a benchmark of the condition of the boat.

We write up a conditional acceptance of vessel with the items the charter company is responsible to repair. I've had this list as short as 20 items and as long as 90 items. These items that are repaired are either per the phaseout manual, or items that are damaged that don't fall under the category of "fair wear and tear."

It is crucial for your broker to have first hand knowledge of the phaseout process. The last thing a buyer wants is to have his or her dream catamaran be the brokers learning curve on the process.

This is where having an independent outside buyers broker is the most useful. The charter company pays the bill for the repairs, not the seller of the boat. Having an independent buyers broker ensures your best interest are in the forefront.

At the end of the charter contract/phaseout I advise my clients to have their surveyor do a follow up to check the conditional acceptance of vessel items, and do a walk through. Some surveyors do this as part of the original survey, other charge for the follow up. If something comes up during this follow up that was noted as in good working order, but now 5 months down the road something doesn't work it is the responsibility of the seller (charter company) to rectify.

If there is something like a major grounding or other major insurance claim the buyer will usually have the option to walk away from the boat.

It is also crucial that your broker travels to the Caribbean for the survey and sea trial. If your broker either tries to get out of going, or ask for you to pay his expenses upfront I would advise finding another broker. It is almost impossible to ascertain the condition of a charter boat without stepping onboard.


Please feel free to pm with any specific questions.
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