Brokers & surveys

Hi,

The Ownership of the "survey report" itself rests with the person who paid for it.

How would you feel if you paid to have a survey done and then found a lot wrong with the boat, the next guy who comes to the broker gets all the survey info given to him for free. Kind of a one sided deal don't you think?

AFAIK Brokers accept a listing based upon good faith that the information they have been given is correct and accurate. The fact that the Sellers can list with more than one broker makes it difficult to envisage boats coming to market already surveyed if the broker was the one expected to stump up for the survey and if it didn't sell straight away how would you as the purchaser know if the items found in the survey were still an accurate list of the defects and deficiencies.

Maybe more things have broken/changed that would make it to a fresh defect list.

There is also the possibility that there would be a Surveyor who would write fantastic surveys about all the boats a broker had and not actually report the true condition. It would satisfy the request that all used boats had a survey but it would be a survey not worth the paper it was written on.

In my experience, Brokers are informing of recent surveys. Since the owner, broker, captain, crew and often local surveyors know it has been performed, it is better to be transparent about it. This doesn´t necessarily mean that you can have it for free, as it (like K1W1 said) belongs to the one who paid for it.

It nevertheless makes sense having another survey on your expense before you buy.

If the buyer of a boat got a lemon and then found out the broker or owner were notified about specific problems; that would be golden in a lawsuit to prove fraud. Extremely unlikely though. Brokers rely on the word of the seller to insulate themselves. If they do any investigating (survey) they're opening themselves to a world of liability. Also, nobody knows the quality of your surveyor but you. That's why each brings their own. Your surveyor may see something as a down-the-road maintenance item, another's may see it as a deal breaker.

http://www.yachtforums.com/forums/g...illion-dollar-lawsuit.html?highlight=HMY+sued
I think that sent shock waves through the industry.

It just makes good business sense for a broker to disclose what he/she knows.

Sometimes the broker has a recollection, especially for a local boat, of a prior grounding/fire/sinking/hurricane damage incident.

But, sometimes that knowledge does not exist: a Pacific Northwest broker introduced his client some years ago to a boat in California that was listed by another house. The buyer had the boat surveyed, a lot of issues were found, the buyer ended up suing everybody just because he could, and the legal wrangling went on for a long time afterward. Who knew what? Who should have disclosed? You would think the seller would have information about the issues; insurance companies expect an annual survey prior to their binding that vessel.

Some brokerages have a clause which addresses that in their Purchase Agreement that states ...."The parties further agree that: This Vessel has not Sustained Damage From Fire, Flood or Sinking".

Even the good brokers are sometimes lied to by bad brokers regarding specifics. It pays to be a good 'boat detective'. A good buyer's broker can pick up on something as simple as a whole lot of new equipment and/or rebuilt machinery (in the sales listing), all done at the same time, and ask the listing broker, "Gee was this boat damaged or sunk--even partially-- in Hurricane XXX"?

A 2005/2006 refit (post-Wilma or -Katrina) are tip offs.

A broker must advise on "known" defects. To not would be fraud. Most brokers don't ask beyond maybe has it sunk or been burned. Asking questions could put them into a situation of being liable. Better to leave that between the buyer & seller. As discussed in the HMY thread, it would be wise for any purchaser to insist on a formal disclosure document from the seller.

Just recently, on Oct. 6, 10 I attended a seminar hosted by the Florida Yacht Brokers Association entitled "Yacht Sales and the Law." As a CPYB (Certified Professional Yacht Broker) I am required to attend continuing education each year. At the seminar one of the topics was DISCLOSURE.
A listing broker needs to ask the seller if there conditions that could effect the value or condition of the boat and then disclose those to a buyer.

As far as having a survey done prior to putting the boat on the market, that would be great to present to a buyer. However that survey is only a report of the condition that day, and two weeks, two months or twelve months later when a boat actually sells, the survey is no longer valid. The buyer still needs to hire his own surveyor who is obligated to him, not the seller or the broker and insurance companies need a recent survey.

If a survey has been done recently the broker needs to inform a buyer of the survey and the general results. However that survey belongs to whomever paid for it and it is often written on the survey that the survey can not be released unless the owner of the survey allows it. If the broker knows of problems he should disclose them.

The HMY case was discussed by some of the attorneys at the seminar and the key issue in that case was that HMY represented a hull sample that was provided by the builder as being from that particular boat. The ruling was that HMY did not commit fraud, but should have verified that the hull sample was from that boat and not another one. Neither builder nor the surveyor had deep pockets so it was HMY the the buyer went after.

Good info and well put. Couple of questions though:
"A listing broker needs to ask the seller if there conditions that could effect the value or condition of the boat and then disclose those to a buyer."
"If a survey has been done recently the broker needs to inform a buyer of the survey and the general results."
Are these requirements?
"If the broker knows of problems he should disclose them."
That's not required? I'd think that could lead to charges of fraud and misrepresentation.

It may just be your wording here, but the defect/problem must be known to the broker/seller.

Wouldn't that be nice... if only it were so.

It's called "Puffing".

Yes they do. There used to be a great school for sales called Dale Carnegie.
Oh, wouldn't it be refreshing to see an ad saying: "I've got to get rid of this piece of C---. It's driving me into the poor house. Please take it off my hands". Don't expect it any time soon though.

When it comes to advertising, it is the same as with cars and houses. It is what is not written or pictured that you should ask about. Nobody will tell you that the house is next to a highway, they just say "no neighbours in front of the property..."

Now that's something that I wouldn't think needs to be mentioned. It's a very common situation that most just live with until it gets bad enough to repair. That's one of the 50 things you're surveyor will mention in the minor category. Of course, if they're using sawdust and 90 w oil to keep from leaking that's another story.

Hi,

I am missing something here, Since when is a Head Gasket problem a minor event?

Most boats I've been on with more that a few hundred hours have a little seepage. A blown head gasket is not minor and changing it is a lot of work or a lot of money. That's why a little seepage is considered just something you live with for most. That's also why I qualified the statement " if they're using sawdust and 90 w oil to keep from leaking that's another story."

I usually react pretty strongly to that sort of comment but this time I really am at a loss ... all I can say is "Wow"

Yes, I know. Sacrilege in Ft. Lauderdale. It took me awhile to get used to it too. But in small boats around the rest of the country, until water starts mixing with the oil or it's dumping a quart a day that's the way it is.

I haven't met a piece of iron yet that knows where it's at.

Hi,

That wasn't one of the words that crossed my mind when I saw the answer.