Rejecting a vessel prior to survey

Did the broker use the YBAA (Yacht Brokers Association of America) purchase and sales agreement? Hopefully the broker is a member and used the standard contract. If so, you are entitled to a full refund of your deposit minus any expenses incurred on your behalf. You would have had to approve such an expense (haul-out for example). There is an "Acceptance of Vessel" date, if you haven't accepted the boat in writing by that date then you have rejected the boat and the deposit comes back to you. No reason required for not accepting the boat.

That all assumes use of the YBAA document of course, a good argument for always using a YBAA member brokerage because their forms are standardized. The brokerage should have a dedicated escrow account for holding deposits. In over 25 years in the business, nobody has ever requested a 3rd party hold the deposit.

I agree with others. No need to spend any more money whatsoever. Contracts are expensive to enforce. They will most likely fold. One other note, however: I'm interested how you came by this information. If the yard gave it to you, you could put the yard in a sticky situation with the boat owner. The boat owner may become mad as a wet hen with the yard. Therefore, if the yard gave it to you, I would approach the yard and tell them your conundrum ... conveying that you do not want to spend any more money, you do not want the boat, but also do not want to put them in a bad way with the boat owner. They will most likely recommend a Houdini for you. Lastly, with each contract I sign, I always make sure there is what I call a "Houdini clause" ... a clause that enables me to easily escape out of the contract. They are very useful in these types of situations. Good luck!

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.

not a lawyer, but seems like if that was enforceable would mean you have taken responsibility for your guests and have assumed libility for their injury.

Curious how it worked out OP. What did you do, with what result?

I'm late here but have a couple thoughts to add

First, in my professional life, I was a buy-side advisor for large IT service contracts. I ran a lot of RFPs where suppliers routinely spent well over $500k in pursuit costs, often over $1m for large agreements. I was under no obligation to tell them why they were being cut, and the news was often not received well. But over the years I developed an approach that worked well. After very brief pleasantries, first words out of my mouth was a clear statement "you will not be moving forward in the process." Very direct statement. I would then give a brief summary of reasons, though would not give the nitty gritty - usually a version of "you guys had a good value proposition, but the other guys were better." I would always offer a more indepth debrief and disclose our final decision after we were done. Oddly, this was only requested once or twice.

I do feel that ghosting a deal is not cool. But the buyer is rarely under any obligation to offer a reason.

Second point - and Seevee brought this up mid-thread - is I too always scribble in a very unilateral statement that I can walk if inspections are not to my satisfaction, even if it's obliquely already in the contract.

Finally, while I know there are bad actors out there, brokers won't be in business long if they withhold deposit money. I wouldn't be dumb about signing over money, but it's not the highest order of concern. Brokers need to sell dozens of boats a year to stay in business. Screwing a buyer on a deal could/would jeopardize their entire business.

Peter

Mr Clayman offers wisdom. The standard contracts do offer you an out which cannot be contested as long as you haven’t “accepted “ the vessel. Also you own the survey. No one can force you to share it. One can even sell it to prospective buyers or the current owner.
It is reasonable to share the information that caused you to back out with the surveyor. At your discretion and his judgment have him revise the survey to include salient points.
Deposit should always be held in escrow. Failure to do so is malfeasance and actionable to my understanding. Think it would be most unlikely you will have issues in recovery.

SteveK said:

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.

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I agree with Steve K. A surveyor should not tell a buyer not to buy. Part of the surveyor’s job is to observe, report and make recommendations that deficiencies be corrected. Buyer decides yea or nay based on what info he or she has, and part of that knowledge comes from a survey. I did many prepurchase surveys and it was certainly understandable that buyer could decide during the survey to halt the survey, not to have surveyor complete the survey. I reduced fee accordingly.

Control of the survey report, if completed, rests with the survey customer. I did not survey for sellers. My survey contract strictly prohibited survey customer from sharing the report with any party other than insurer and lender without my express permission. My reasoning was that I did not want a report floating around months/years after the survey if original survey customer did not buy boat, report ends up in sellers/broker’s hands, and months/years later, after boat has aged/changed/been damaged/value changed, etc. A buyer should not rely on an out of date survey, especially if seller was the survey customer.

Raylee said:

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

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Seeing several comments here I agree. The vessel did not pass the first phase of the "survey."