New Boat how to do the pay off, safely?

[Ram]

Hi All
I Have a new boat under contract ,I will be paying cash for, I live in S. Florida & the Broker is in NY, the factory is in France. Im suppose to send a check to the broker, but what if the guy gos out of bussness at the time he receves my $? He seems fine to me, but over the years ive seen things like this happen,in my bussness- how does one protect ones self from this happening? Anyone have any ideas?
Ram

[NoTies]

Escrow? Never used this service, is it applicable here?

[Catamount]

Don't pay the final bill until you have a closing where the keys to the boat are handed over to you. You--and your surveyor--should have inspected the boat first-hand before this. Presumably this is all specified in your contract.

Regards

[ssullivan]

Ram once whispered in the wind:
Hi All
I Have a new boat under contract ,I will be paying cash for, I live in S. Florida & the Broker is in NY, the factory is in France. Im suppose to send a check to the broker, but what if the guy gos out of bussness at the time he receves my $? He seems fine to me, but over the years ive seen things like this happen,in my bussness- how does one protect ones self from this happening? Anyone have any ideas?
Ram

Why not ask for financials on the company? This way you can see if they are using your deposit to fund a previous boat's completion or not.

Given that you indicate a Fountaine Pajot, I would assume they are going to be legit. Also, the broker should have an escrow account he uses for this stuff... not just a standard account. Your money should go into escrow and then be sent to France as per the terms of your agreement (maybe partials during construction and a final payment upon completion... something like that). Just work your way around like in any other deal and see what you can do to protect yourself.

The escrow is a MUST though.

[Jeff H]

The other way to do this is with a 'letter of credit'. That is how these things are normally done with imported boats. I don't have the time to explain this right now but talk to your bank or a lawyer.

Jeff

[jean1146]

Hi
I am glad you are asking the question.I am in the same situation .Just ordered a new FP Mahe 36' from a company in Ft Lauderdale.I do think putting the money in an escrow would be the way to do this.I will contact them,may be you delt with the same company.If you learn something please let me know.Thanks.Jean Claude.

[Ram]

Thanks All for your reply
I did wire the money to the brokers escrow account last Friday,
Im stilll not quite sure how this protect me, seems as if the broker could still spend the money any way they see fit?

Jean, could you send me an e-mail - bahamarama1-at-aol.com

thanks again
Ram

[Auspicious]

I've been going through the same thing on a new Hallberg-Rassy. I wire funds in USD to the broker's escrow account in Sweden. That bank does the currency conversion to SEK and transfers to the factory account. As I understand it the escrow account is set up so funds can only be transferred to the factory. I have a subaccount number that lets the factory know who the funds should be credited to. There is certainly the possibility of something being miscredited, but they have been very prompt with acknowledgements of credit.

I haven't quite worked out the timing of the final payment. Each transfer takes three or four days. I think the factory is just going to have to accept final payment a few days after inspection and settlement. I just hope they let me start preparing the boat for passage while the funds work their way through the system.

[BC Mike]

We use a Notary for this sort of thing. This is done all the time with real estate transactions. The confusing part about the US is that the Notary duties vary from state to state. I could qualify to be a Notary in California with the education I already have, but in BC it takes a few years of specific education. My memory tells me that NY has the most strict financial governence, as applied to companies financial stability. The Notary can assure the builder or broker that they have the $$, and they will release the $$ when certain conditions or a fixed date are met. Columbus used a Notary.
Michael