Selling a Survey

[Alecadi]

I had two cases last year.
One was for a CSY 37 that we were about to buy after being from Miami to Tampa to see her and having a sailing trial with the owner, charming guy. Just before concluding the sale I sent a local professional surveyor to check for me what I was buying. The result was really bad as there was a lot I didn't see mainly in the through hulls etc.. Things that needed to be done immediately and not in my immediate budget. So I decline to buy and to explain why I gave a copy of the survey to the seller.
The second time it was the boat I have now and that I bought in June last year. She is an Endeavour 35, and was a one owner since 1984. A nice couple having taking a great care of the boat during all those year and selling for health reasons unfortunately. The boat was professionally surveyed and passed with high grades , only some things to do not urgently and in my budget. (BTW since then in one year I have almost spend 80% of the value of the boat in some improvements , equipments etc.. you know.. money pit as the Admiral says). We made a deal and as a souvenir of their boat I gave the seller a color copy of the survey. They were quite happy.

I've been in business for more then 40 years in several continents, business doesn't imply you cannot be nice to the other party and that you have to be mean to pretend to be a tough guy. At least it's my way.

[Alecadi]

Originally Posted by anotherT34C

If the seller or broker were reasonably nice, I'd just give them the survey. Better luck next time and no hard feelings, but too much project for me.

I second that !!

[denverd0n]

Originally Posted by S/V Illusion

Well, you were just lucky.

No, I was not just lucky. The contract does not say anything at all about the buyer being required to provide an explanation to the seller. All it says is that the survey must be "acceptable" or "satisfactory" to the buyer. As such, the only explanation that the buyer owes the seller is "the survey results were not acceptable to me."

I've backed out of boat buying deals this way. I've backed out of house buying deals this way. I have even had one case where the broker got quite upset with me and demanded an explanation, which I refused to provide (mainly because of his attitude, had he asked nicely I probably would have explained).

I'm not a lawyer, but my sister is, and what I am saying here is true. Without a clause that specifically says that the buyer must provide an explanation, no such obligation exists. And, personally, I would never agree to a contract that included a clause like that.

[bangkaboat]

If there was an issue that the seller was not aware of, I'd certainly be willing to show him/her that part of the survey. But, perhaps naively, I tend to think that the seller knows the issues with the boat he/she is selling. Full disclosure seems a rare thing, however, which is one of the chief reasons for which the prospective buyer hires a surveyor, the others being for future insurance or to satisfy a lender.

[sailpower]

Originally Posted by denverd0n

The standard contract, here in Florida, says that after the buyer has a survey done he is free to back out of the deal based on that survey, for any reason whatsoever, and has no obligation to explain why he is backing out. So, you get the survey, you say you have decided not to buy, that's the end of it.

What "standard" contract are you refering to? The state of FL does not mandate the form of contract to be used between the parties. Brokers are free to use any form that all the parties are willing to sign.

[sailorboy1]

Doesn't the "standard" contact mostly protect the broker and seller? That was my impression of it the last 2 boats I brought that MY broker presented me to use to make offer with. That's what line outs are for!

[sailpower]

Originally Posted by S/V Illusion

Quite tyhe contrary - the contract exists and is typically entered into when the offer is made and accepted. That IS the contract! Stipulated therein is the right of the buyer to refuse to execute based upon the survey results. Absent the survey, the buyer is obligated by the contract to either execute the sale or lose his deposit in penalty for default.

Maybe yes, maybe no. it all depends on how the contract is written.

Originally Posted by S/V Illusion

The only means by which a buyer can ensure his deposit is returned upon refusing the execute is to demonstrate the survey forms a satisfactory basis for backing out of the contract.

Again, it depends on how the contract is written. If the wording is along the lines of; "The Buyer and the Seller agree that the Buyer may cancel this sale if he is not satisfied with the results of a survey of the Yacht....." then the buyer is not obligated to produce anything to justify his decision to cancel the sale. There is nothing implied in that wording.

Some brokers get lazy and write things like :"This sale is contingent on a survey of the Yacht". In this case the clause is just about meaningless. For example if no survey is done then the sale can't happen? Or, if a survey is done then the sale goes forward regardless of the results? What does contingent mean anyway?

Originally Posted by S/V Illusion

It is for that reason the seller has an absolute right to obtain documentation (i.e., the survey) or keep the deposit.

An absolue right? What is that legally?

What is lost in all of this so far is what is the definition of a survey? Absent any specific definitions it seems to me that it can be anything the Buyer wants it to be.

IMO, unless the contract states that the Buyer must justify his decision to the Seller then no justification is required. Come to think of it, what does "justify" actually mean in this context? Buyer has to state reasons which the Seller is then free to disagree with? Very slippery slope.

[TheManWhoSpoke]

It would seem that most contracts stipulate the determining factor as being "the satisfaction of the buyer". Therefore, if the buyer doesn't feel satifsfied with the condition of the vessel as indicated by the survey, than that is the end of the matter. If the buyer states that they are not satisfied, then their judgement on the issue is final.

It may be stipulated within the contract that the buyer justify their decision. Which could mean a description of the faults found, and reasoning for their decision. It could also mean the provision of evidence, such as the survey document. But this is of course ambiguous... All of this does not nullify the previous point: That the buyer is the arbiter of what is considered a serious fault, and the seller, even when furnished with the survey documents cannot dispute this.

If you took this matter to court, the courts may require the survey. But I don't see any other way that the seller might actually obtain a copy of the survey. The seller and broker are entitled to keep secrets, and so is the buyer.

[Cheechako]

Originally Posted by Alecadi

I had two cases last year.
One was for a CSY 37 that we were about to buy after being from Miami to Tampa to see her and having a sailing trial with the owner, charming guy. Just before concluding the sale I sent a local professional surveyor to check for me what I was buying. The result was really bad as there was a lot I didn't see mainly in the through hulls etc.. Things that needed to be done immediately and not in my immediate budget. So I decline to buy and to explain why I gave a copy of the survey to the seller.
The second time it was the boat I have now and that I bought in June last year. She is an Endeavour 35, and was a one owner since 1984. A nice couple having taking a great care of the boat during all those year and selling for health reasons unfortunately. The boat was professionally surveyed and passed with high grades , only some things to do not urgently and in my budget. (BTW since then in one year I have almost spend 80% of the value of the boat in some improvements , equipments etc.. you know.. money pit as the Admiral says). We made a deal and as a souvenir of their boat I gave the seller a color copy of the survey. They were quite happy.

I've been in business for more then 40 years in several continents, business doesn't imply you cannot be nice to the other party and that you have to be mean to pretend to be a tough guy. At least it's my way.

Yeah, why make another sailor pay to find out what you already know?

[Dennis.G]

Sounds like many have not actually read their offer to purchase ageement. The standard American yacht brokers agreement basically just says that potential buyer is seriously considering purchase and is putting down a fully refundable deposit. Buyer can back out for any reason, and expect the deposit back. Really. Read it.

[sailpower]

Originally Posted by Dennis.G

Sounds like many have not actually read their offer to purchase ageement. The standard American yacht brokers agreement basically just says that potential buyer is seriously considering purchase and is putting down a fully refundable deposit. Buyer can back out for any reason, and expect the deposit back. Really. Read it.

If by "standard" agreement you mean a contract endoresd by one of the Yacht Broker Associations such as YBAA, FYBA, CYBA, etc then you are exactly correct.

Caveat, while there are lots of outs for the buyer there are also hard dates inserted that can result in loss of deposit if not adhered to.

[blgklr]

This discussion brings up a point I am not sure about. If the broker or owner know of a fault with the boat are they legally obliged to disclose that information to a prospective buyer?

[Just BS]

My two cents...

I had a couple of surveys done before I found my boat. Paid for them out of my pocket, used it to negotiate a price and walked away from one deal without any repercussions and bought the next one. The first survey was really helpful in looking at future boats though. I highly recommend anyone looking to buy to have a survey done.

When it was time to sell, the first buyer was from out of state, over 500 miles away. We exchanged emails and talked on the phone. He found a qualified Surveyor and paid over the phone by credit card. I met the Surveyor at the dock and let him on board and waited while he did his inspection. He gave me his copy when he was done and I scanned it and sent it to the buyer, who eventually backed out.

When I eventually sold the vessel, the buyer never had had a survey done and I didn't tell him about the one I had in my desk, although if had wanted a survey, I would've given it to him because I already had factored those things into the purchase price. Regardless, after the money was in my account and the documents were signed, I gave the new owner the survey. Figured it might help him out even though there was really nothing wrong with the vessel except for the usual wear and tear of a ten year old boat.

That's my only experience. Now I own a quarter share and it is what it is. When something needs to be fixed, we all pitch in to repair.

[denverd0n]

Originally Posted by Dennis.G

Sounds like many have not actually read their offer to purchase agreement.

I don't think that a truer statement has been made within this thread!

[denverd0n]

Originally Posted by blgklr

If the broker or owner know of a fault with the boat are they legally obliged to disclose that information to a prospective buyer?

My understanding is that the answer is no. Unlike buying a home, where most states in the U.S. now require full disclosure, with boat buying it is pretty much caveat emptor.

Probably why most contracts are written to give the buyer a number of different points where they can back out for any reason at all, without explanation.