Rejecting a vessel prior to survey

[Raylee]

Hello everyone,

We have a contract on a vessel, pending a satisfactory survey, with a survey scheduled in a week.

We came by additional information this week that would make us walk away from the deal even before doing the survey. Unfortunately, there is only one broker (seller’s) involved. And getting truthful information was/is very challenging but now we see too many red flags. I am getting ready to inform the broker but wanted to get opinions from the forum. There is no point going through the expense and time involved in the survey x2, if we are going to reject anyway.

We have never done this before, so I would appreciate any feedback or comments.

Many thanks,

Raylee

 

[tiltrider1]

The first part of survey is information gathering and in that stage the boat has failed so no reason to go further. No need to make up a story just tell the broker it has failed survey during the information gathering.

Recently I was helping a friend buy a boat. We pulled it for the surveyor. The first thing I noticed was excessive out drive corrosion. We told the yard to not block or wash the bottom. We had them put the boat right back in the water and sent the surveyor home. There was simply no reason to go further as my friend would not have been interested in the boat for any reasonable price. These things happen. Never spend good money after bad.

 

[Bacchus]

I'm guessing there was no specification as to who had to do the survey so first step is buyer inspection and info gathering. You might get some pushback but I doubt broker has any legal recourse. If any doubt I'd discuss the findings with the intended surveyor and see if he would concur and advise against purchase with that knowledge.

 

[BruceK]

The first part of survey is information gathering....

It makes sense not to waste money on a pointless survey, but what`s the basis for the above? I always thought survey was the act of inspection and inquiry by a surveyor. Hopefully my understanding is wrong and it`s broader than that, but we don`t want to see our TF member in trouble. Does the Sale Agreement say what is meant by "Survey"?

 

[Raylee]

Thank you for the comments, the contract states that the buyer may or may not choose to conduct a survey and it also states that the buyer can reject the boat based on their satisfaction.

We became aware that critical repairs were partially carried out but not to the extent of the yards recommendations. Which I suspect will show up on survey.. leading to additional costs and time that we did not plan for prior to the offer.. as well as suggestions of continued deterioration over time at the broker’s dock.

 

[Portage_Bay]

If that is actually the wording in the contract it seems to me you have your out.

the buyer can reject the boat based on their satisfaction.

 

[BruceK]

Thank you for the comments, the contract states that the buyer may or may not choose to conduct a survey and it also states that the buyer can reject the boat based on their satisfaction..

I get that you don`t have to Survey.
But does the contract stipulate "satisfaction", with what? Hopefully it`s not not "Survey".
Be sure you are reading the Contract objectively and not how you`d like it interpreted.

 

[LovetoBoat]

I used the Seller's broker - I would never do that again. One more thing I used a Surveyor that I wish had stayed home - I would have found more issues than he did. But because he showed up I thought I was covered... big mistake that will never happen to me or anyone that listens to me.



Now I know what to look for and will help my surveyor to look at - I did not have a choice I was out of state by several thousand miles and other surveyors were not calling me back so I took the first one that called me back... thousands of dollars later my boat is getting back to the shape I wish I had bought it in...



Good luck...

 

[Comodave]

When I am looking at a biat spend at least several hours poking around by myself before I make a firm offer. So I pretty well know if I am going to buy the boat or not, excepting for something like rotten stringers. For the next boat you might make an offer ask to spend some time alone on the boat and make a list of things you find wrong. Then make a decision as to make an offer or not. Good luck.

 

[twistedtree]

Just tell the broker you are rejecting the boat per section xyz in the contract. Don't feel any obligation to say why if you don't want to. Do it in writing (email is fine) and get a confirmation with when you can expect your deposit back.

Good on you for following your gut and heading the warning signs. It's all too easy to brush them aside in the excitement of buying a boat.

 

[SoWhat]

Thank you for the comments, the contract states that the buyer may or may not choose to conduct a survey and it also states that the buyer can reject the boat based on their satisfaction.

We became aware that critical repairs were partially carried out but not to the extent of the yards recommendations. Which I suspect will show up on survey.. leading to additional costs and time that we did not plan for prior to the offer.. as well as suggestions of continued deterioration over time at the broker’s dock.

Sounds like you can revoke the offer. I would be as detailed as possible re. reasons. The process will go smoothly if the owner knows about the problems you note in your cancelation. Just saying "i don't like the curtains" might not be received well.

You may be on terra firma legally but seller or broker can disagree and then you will be hiring a lawyer.

 

[guy with a boat]

Just tell the broker you are rejecting the boat per section xyz in the contract. Don't feel any obligation to say why if you don't want to. Do it in writing (email is fine) and get a confirmation with when you can expect your deposit back.

Good on you for following your gut and heading the warning signs. It's all too easy to brush them aside in the excitement of buying a boat.

Ditto

 

[twistedtree]

Sounds like you can revoke the offer. I would be as detailed as possible re. reasons. The process will go smoothly if the owner knows about the problems you note in your cancelation. Just saying "i don't like the curtains" might not be received well.

You may be on terra firma legally but seller or broker can disagree and then you will be hiring a lawyer.

I generally like to provide feedback, so in that regard agree with you.

That said, the decision to accept or reject is 100% up to the buyer, for any reason. "I changed my mind" is all the reason that they need, and it's not up for debate. Every situation is different, so judgement needs to be applied, but I have found that providing reasons also invites debate, and can make the other party think that they have a say in the matter. So if you think the decision will be contentious, I find it helps to leave no room for discussion or debate. Just a cut and dry "this is how it is".

I bring this up because the OP mentioned that the broker has been less than forthcoming, and perhaps I'm reading too much into that. But the broker or someone presumably is holding a deposit that the OP wants back, and I wouldn't want to leave any room for debating whether or when it needs to be returned. One option, if there is any concern about triggering a debate over rejecting the boat, would be to offer feedback once the deposit has been returned. Any BTW, the OP is helping the seller by rejecting early rather than dragging things out and locking the boat out of the market for longer. Nobody likes to lose a sale, but if you are going to lose it, lose it early and move on.

But again, all this depends on the particular situation. In a trusting, amicable situation none of this is of concern.

 

[slowgoesit]

I have done just what Dave suggested above, but I took it one step further. I spent about two days going through our current boat, wrote up my list, then sent it to the surveyor prior to his seeing the boat.

Basically I stated, "I do not have the experience you do in surveying boats, but these are items I noted that potentially concern me. Can you please look over the list, and during the survey, pay particular attention to these items and let me know if they are valid concerns or not?"

By phrasing it that way, I tried hard to not step on his toes, or offend his professional ego. He looked over the list, and incorporated almost all of the findings in his survey, or told me verbally that some of them needed addressing, but he wasn't putting them in the survey because he knew I was aware of them, and felt I would be addressing them. None of them were life safety issues.

Actually, he only found three items that I didn't have on my list, one of which I disagreed with, as it was contrary to what the manufacturer recommended . . . .but that's neither here nor there.

I DO wish he had found about 4 items that I felt a competent surveyor should have spotted . . . . They wouldn't have prevented us from purchasing the boat, but would have been nice not to come as a surprise, and two of those WERE potentially life safety issues, and were in plain site, I just didn't know what to look for . . . apparently the surveyor didn't either . . . .

Getting back to your boat, It all comes back to the P &S Agreement.

Ours stated: "Vessel shall undergo inspection and/or a marine survey at purchasers expense to buyers satisfaction."

Nothing states that the "inspection" must be completed by a marine surveyor, nor that it has to be completed on the boat. Inspection could consist of any verbal information that is passed to the buyer by anyone, including the seller and broker, or from any other source, for example, a blog that the seller posted detailing a serious problem, that raised questions about the boat. Any of that would can be used to back out of the purchase, and require the broker to return your deposit/earnest money.

 

[sunchaser]

When we sold our boat last year there was a sizeable deposit put down that stated the buyer had duly inspected the vessel and was satisfied with the vessel and would proceed to a NAMS survey. Following survey items found could be a point of further negotiation.

So, in this case is the buyer possibly going to lose out his deposit? Without the contract available (nor should it be) to us I find it hard to say "just walk".

This thread does raise the point that when boat buying, even to bringing along a boat smart friend, best you give things a very good first and second look before signing a contract. Especially so if putting money down before survey.

 

[twistedtree]

When we sold our boat last year there was a sizeable deposit put down that stated the buyer had duly inspected the vessel and was satisfied with the vessel and would proceed to a NAMS survey. Following survey items found could be a point of further negotiation.

So, in this case is the buyer possibly going to lose out his deposit? Without the contract available (nor should it be) to us I find it hard to say "just walk".

This thread does raise the point that when boat buying, even to bringing along a boat smart friend, best you give things a very good first and second look before signing a contract. Especially so if putting money down before survey.

This is a great example of why it's so important to fully understand your purchase agreement BEFORE you sign it, and make sure the terms are acceptable to you.

The above is exactly why is all comes back to the contract. I haven't seen that language before, but it's not like I've bought and sold a lot of boats either. But I think that's in there to prevent you from rejecting the boat for reason's other than things found in the survey. It's a good clause for the seller forcing the buyer to essentially accept the boat save for any survey issues. With this language the buyer probably does need to proceed to a survey and hopefully find cause there to reject the boat.

 

[Portage_Bay]

Not saying this will work in every case but here's my story. Trying to buy a boat long distance. Personal inspection was promising. So I hired mechanical feeling that I did not need to be aboard for that, she passed. Flew back for hull and condition. Early in the survey the surveyor found major issues that would be expensive. He volunteered to stop his survey and bill accordingly a reduced fee.

If OP must take the boat to survey start with either mechanical or hull and condition depending upon what outside information OP has. Give the surveyor a heads up. Stop the survey and reject the boat at that moment. Maybe that way paying for only part of one survey, not full price of both.

 

[Bacchus]

Just tell the broker you are rejecting the boat per section xyz in the contract. Don't feel any obligation to say why if you don't want to. Do it in writing (email is fine) and get a confirmation with when you can expect your deposit back.

Good on you for following your gut and heading the warning signs. It's all too easy to brush them aside in the excitement of buying a boat.

Ditto

I agree and feel the only response necessary / desired is the rejection.
Assuming the contract doesn't specify some level of major deficiency necessary to cancel... why open the door?

When I purchased Bacchus I had right to inspection & survey by myself, surveyor and /or mechanic. No specific certifications spelled out or necessary for refusal. I ended up doing my own inspection, survey & oil sampling and waived the need for surveyor / mechanic (eng & gen hrs were exceptionally liw and boat was relatively new.

 

[sunchaser]

It's a good clause for the seller forcing the buyer to essentially accept the boat save for any survey issues.

Or to forfeit the "earnest" money which was put forth in the offer to validate the pre survey sales contract.

Some years ago I put forth a 6 figure amount to show the seller I was serious in my offer to purchase a 7 figure Nordhavn. My monetary offer was rejected and money returned. Eight months later the seller's agent contacted me with a 30% price decrease. We had moved on so no mas.

As you correctly note TT, contracts should indeed be carefully scrutinized to insure signing and putting them into effect is acceptable. Before signing, the buyer should be confident they can move forward with a clear understanding as to buyer's obligations.

 

[Bacchus]

If refusal gets questioned or buyers are paranoid I'd have a conversation with a surveyor and share your findings. Inquire if they would provide a written recommendation to reject the purchase based on info gleaned. Possibly for $100 fee?

I dont think sellers have any rights to a copy of a survey.
If they were foolish enough to take it to court I'd let them know you have written recommendation against purchase.

 

[sunchaser]

Raylee
A missing link on this thread is what were the items that caused you to not want the vessel?

 

[BruceK]

The other missing information is the actual provisions in the Agreement governing survey and rejection. Summary of what it might say, yes, but actual words,no. Without that, and a seller with a boat that on the OP`s account has half fixed issues causing the OP to not want it anymore, it`s all a tad unclear. But, OP is not posting now, so perhaps the deed is already done.

 

[SteveK]

If refusal gets questioned or buyers are paranoid I'd have a conversation with a surveyor and share your findings. Inquire if they would provide a written recommendation to reject the purchase based on info gleaned. Possibly for $100 fee?

I dont think sellers have any rights to a copy of a survey.
If they were foolish enough to take it to court I'd let them know you have written recommendation against purchase.

A surveyor would write you a report sight unseen telling you not to buy a boat? I don't think a reputable one would. More like they will write down findings and you decide that is reason not to buy without being advised not to buy.
But south of the 49 may have different standards.

 

[Seevee]

I could argue strongly to ALWAYS have a way out of a contract to purchase. "If for any reason I don't like it, I'll cancel the contract and get all my money back" would be appropriate.


Also, I'd NEVER give a deposit to the broker. Always have a third party hold the deposit, with the instructions on how the deposit would be handled and if returned, if necessary.

 

[henrymei]

I think it is a good idea to put in any purchase offer that you have the right to inspect the boat on multiple occasions. It is hard to see what you need to on one or two visits. A visit after a good hard rain can be very revealing. All boats have issues. The more you find before purchasing, the better idea you have what you’re getting into. I bring a moisture meter and thermal imager. On one occasion this let me have the surveyor do a limited moisture survey. He confirmed my findings and we walked.

 

[pjnorth]

Hello everyone,

We have a contract on a vessel, pending a satisfactory survey, with a survey scheduled in a week.

We came by additional information this week that would make us walk away from the deal even before doing the survey. Unfortunately, there is only one broker (seller’s) involved. And getting truthful information was/is very challenging but now we see too many red flags. I am getting ready to inform the broker but wanted to get opinions from the forum. There is no point going through the expense and time involved in the survey x2, if we are going to reject anyway.

We have never done this before, so I would appreciate any feedback or comments.

Many thanks,

Raylee

It does not make sense to go through the charade and expense of a survey just to reject a boat with which you have serious problems. In any event, you’re asking for legal advice. My advice is to read the contract carefully and see if you can find a provision which allows you to terminate pre-survey. Whether you find said provision or not, you should send a notice to the Seller and his broker that you are canceling the contract. No reason needs to be given. Sooner is better than later. And cancel the survey.

 

[RickyD]

Hello everyone,

We have a contract on a vessel, pending a satisfactory survey, with a survey scheduled in a week.

We came by additional information this week that would make us walk away from the deal even before doing the survey. Unfortunately, there is only one broker (seller’s) involved. And getting truthful information was/is very challenging but now we see too many red flags. I am getting ready to inform the broker but wanted to get opinions from the forum. There is no point going through the expense and time involved in the survey x2, if we are going to reject anyway.

We have never done this before, so I would appreciate any feedback or comments.

Many thanks,

Raylee

To me the idea of a survey is to give the buyer a third party and expert opinion of the items that should be corrected on a boat (we know they all have something to fix). You could offer to buy the boat if the owner puts in new engines and outdrives, then they say NO and you are off the hook. My last unsuccessful purchase went like that. Purchase was subject to survey. It had heavy blow by smoking up the engine room. I said I would only purchase if that was corrected. They tried, failed and I moved on.

 

[RickyD]

This is a great example of why it's so important to fully understand your purchase agreement BEFORE you sign it, and make sure the terms are acceptable to you.

The above is exactly why is all comes back to the contract. I haven't seen that language before, but it's not like I've bought and sold a lot of boats either. But I think that's in there to prevent you from rejecting the boat for reason's other than things found in the survey. It's a good clause for the seller forcing the buyer to essentially accept the boat save for any survey issues. With this language the buyer probably does need to proceed to a survey and hopefully find cause there to reject the boat.

Speaking of Contracts, in my working life I bought and sold machinery costing 100s of thousands and sometimes multiple millions. Some buyers and sellers will just sign our contract. Others will go over them with a fine tooth lawyer and mark out or ask sections to be re-written. So, I have learned to do the same. When I had my sailboat, our docks were falling into disrepair. The Marina was sold and the new buyer required a contract that required me to be obligated to protect them in court and hold harmless if one of my guests hurt themselves on the dock. I refused to sign. Two years later they said they would kick me out if I didn't sign. So, I marked out every item I didn't like, initialed and dated each, turned it in and never heard a word. So, if the broker says "this is just boilerplate and everyone signs" its not necessarily true.

 

[Offshore]

Hello everyone,

We have a contract on a vessel, pending a satisfactory survey, with a survey scheduled in a week.

We came by additional information this week that would make us walk away from the deal even before doing the survey. Unfortunately, there is only one broker (seller’s) involved. And getting truthful information was/is very challenging but now we see too many red flags. I am getting ready to inform the broker but wanted to get opinions from the forum. There is no point going through the expense and time involved in the survey x2, if we are going to reject anyway.

We have never done this before, so I would appreciate any feedback or comments.

Many thanks,

Raylee

Hello everyone,

We have a contract on a vessel, pending a satisfactory survey, with a survey scheduled in a week.

We came by additional information this week that would make us walk away from the deal even before doing the survey. Unfortunately, there is only one broker (seller’s) involved. And getting truthful information was/is very challenging but now we see too many red flags. I am getting ready to inform the broker but wanted to get opinions from the forum. There is no point going through the expense and time involved in the survey x2, if we are going to reject anyway.

We have never done this before, so I would appreciate any feedback or comments.

Many thanks,

Raylee

We had the same situation.
I called the broker and told him we were out. He was very forceful saying we can't back out as there was a contract. I reminded him that the contracted stated that we could back out after the survey or sea trial.
I told him. We could go for the sea trial and then we would drop out.
He was very upset.
The next day he called and said the owner substantially reduced the price. That worried us more. I told him we were still out after the trial.
He dropped everything and required no trial. Be prepared to stand up for your rights.

 

[JOHN CLAYMAN]

Hopefully, your broker used either the standard YBAA or IYBA Purchase & Sales Agreement. We only use these agreements when representing our clients as they do a very good job of protecting the interests of all the parties. As a Buyer, you do not need tp proceed to Closing without providing a reason. In fact, your deposit does not become non-refundable unless you have signed an Acceptance form following the survey prior to the Acceptance Date. You can walk way at anytime unless you have Accepted the Vessel. There is nothing wrong with using a broker who is representing both the Buyer and the Seller provided you are comfortable he / she will do the right thing for both sides. If you are going ahead, make sure you have a very competent survey team.