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Old 07-10-2019, 08:56 PM   #118
BandB
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City: Fort Lauderdale. Florida, USA
Join Date: Jan 2014
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Quote:
Originally Posted by djmarchand View Post
With all respect to Miz Trom and I am no way disparaging their purchase and repair, but this story begs for a discussion of how to buy a boat (from a potentially unscrupulous builder). This is what we did in buying billions of dollars of construction equipment for multi, multi million dollar projects. Some of it can be skipped if you have confidence in the builder, like the partial title/lien provision.

First you need to have clear set of specs when you sign a contract. It doesn't need to be silly, but it should list all equipment whether or not standard. Since this builder has a fluid idea of standard you cannot rely on it as the basis.

If the bulder wants progress payments, then the contract should have an initial payment and progress payment linked to clear, observable progress, not time. These might be laying up the hull mold and turning it over, installing the engine, covering the hull with the topsides layup, etc.

Then if you have any concerns about the financial condition (or integrity) of the builder then write in the contract that payment of each progress payment gives you partial title to what is installed. That way if for some reason he doesn't finish you can take possession of what you have paid for, move it to another shop and finish it. Admittedly if the builder renegs before the hull is closed you are in a world of screwed.

Another less draconian way is to secure a lien on what you have paid for so that if he subsequently declares bankruptcy you have a lien on your property and no other creditor can liquidate it to pay his bills.

This later provisions may sound unwieldy but it was routine in all big orders we made with progress payments. Admittedly making it work after a bankruptcy will be tough, but better to have it than just be one of hundreds of creditors waiting in line.

If he won't agree to these sound and proven solutions, then run don't walk away.

I have purchased four brand new boats in my life and I never had to make a progress payment. One builder did go into bankruptcy- Saga Yachts, some years after I purchased mine, but other than maybe a 10% initial payment I never paid another dime until the boat was delivered to the dealer's yard in Annapolis from the factory in Canada. And according to the contract, final payment made it mine.

Anytime a builder wants progress payments is a big, big red flag and it warrants the stringent measures described above. And by all means consult with an attorney before committing to spend hundreds of thousands of dollars.

David
I wrote in the now deleted thread some advice along the lines you mention and I'll try to remember what I wrote then. However, you can never win with an unscrupulous builder. The best you can do is cut your losses.

One added problem I'd point out. Most builders have some strong supporters, largely among those who have bought used, but never knew what the original buyers went through. Often you'll get the negative stories in private. There's a dilemma web sits face as they don't want to become a place for blasting businesses, but then sometimes by bending over backwards or giving in to threats or dealing with vendor friendly trolls, they fail to illuminate situations. I don't know how Mirage was years ago, but I know GH owners who built and went through similar issues. Miz Trom has published very detailed and factual information and been much kinder than likely merited. She's handled it all with amazing grace. I hate seeing her words used on the site to try to sell TT 35's. The concept is still a great idea.

The good thing is there are hundreds of quality builders and there is no design so unique or so perfect to deal with the others. The bad thing is it can be very difficult to know the good and the bad.
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