Another post from Fred....
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LESSONS LEARNED:
THIS TIME, FROM
THE SALE OF MY OUTER REEF 70 TRAWLER
APPARENTLY
posting LESSONS LEARNED FROM THE PURCHASE OF MY OUTER REEF 70 TRAWLER
had an impact, so much so, that the purchaser of Jambo required several
surveyors to confirm the current condition of the vessel before he would close
the transaction. It took a full year to find a buyer for Jambo, which is
about what was expected. The sale process resulted in several additional lessons
learned that may be useful for other boaters.
Based
upon the discussions with prospective buyers of Jambo, the majority of them were
not cruisers, but essentially utilize their boats as entertainment venues or
condos or both. Since many boaters do not venture offshore, the features
of a cruising trawler have little importance. The major concern of Jambo
was the 2,000 hours on the CAT C-12 engines over the 4 years of ownership.
My wife and I took Jambo between Ft. Lauderdale and New England
each year of her ownership and enjoyed the passage, both inside the ICW and
offshore, and appreciated the New England summers. At an average cruising
speed of 9-10 knots, there was no major stress on the engines or systems as
evident by having no CAT warranty claims. Jambo had a CAT Platinum Plus
Warranty that covered everything except normal wear and tear. The warranty
was extendable, as all CAT required service had been performed and documented,
except for the 2,000-hour service, which was just due. Having the CAT
Platinum warranty effectively answered any survey questions or concerns on the
engines on Jambo.
As a
buyer, I would want a vessel that had been used and properly maintained so any
construction problems would have been exposed and remedied. This appeared
to be the case with Jambo, but there were surprises in spite of the significant
use and maintenance routine provided by Wheelhouse. When buying a new
boat, I suggest that Buyers be wary of any caution from the builder that he
will not “rebuild the boat" based
on
what the Purchaser’s surveyor finds during the survey. If a boat is
properly constructed, there should be no requirement to make major changes
unless the builder and Seller (if different) failed to check the work and
remedy the problems during the construction process.
The Sea
Time Global, Ltd. Purchase Contract with Outer Reef Yachts had a provision that
the construction would be completed in accordance with ABYC Guidelines, where
applicable. The verification of this requirement, however, was left to
the Buyer, which was a contractual failure on the Buyer’s part. It would have been necessary to hire a
surveyor to be on site during the construction process to fulfill this
obligation properly. Reliance on
the Seller’s part-time surveyor was grossly ineffective as was any reliance on
construction photographs. Another
Buyer’s contractual failure was that the boat was delivered “as is where is”
and all warranties were transferred from the builder to the Buyer, whereby
excluding Outer Reef Yachts from any responsibility. This makes the Buyer contractually responsible for the
remediation of any and all construction defects with the Yard and all other equipment
suppliers. This is not a good situation, especially in those cases where
the Seller is not the same as the builder, as is the case with Outer Reef
Yachts.
In Sea
Time Global, Ltd.’s sale of Jambo, the Buyer's survey uncovered several
construction defects that had to be dealt with, in this case by negotiating a
reduction in the purchase price. There were hull problems from the
original removal of the hull from the mould. There were instances where
improper hoses were used that failed to comply with ABYC standards or
specifications, instances where the yard installed receptacles without GFI
protection in wet areas, built battery boxes with no ventilation, undersized
ground wires, freshwater pumps used for salt water applications, etc., etc.
What is disappointing is that some of these problems were apparently
known by Outer Reef but there was never any notice or recall to remedy the
problems if, in fact, they were known by Outer Reef.
The
Buyer of a new vessel has the responsibility and obligation to know in what the
condition the vessel is before taking title. In the purchase of Jambo,
Sea Time Global, Ltd. was too focused on the first trip and failed to perform a
thorough assessment of the vessel.
Some Sellers rush the closing date because it triggers the start of a
guaranty or warranty period.
Surveyors
perform a critical role in helping a buyer understand the condition of his new
boat. Buyers have the
responsibility to set the necessary standards for the survey to protect their
investment. Do not limit the surveyor’s
responsibilities based on anything the Seller says. Allow sufficient time for the Surveyor to get answers to all
questions or run additional tests especially in the mechanical areas, and
insist that all major issues be corrected at the seller’s cost and expense
before closing. Relying on
good will or verbal commitments of the Seller is asking for a problem that could
affect your enjoyment of a new boat.
Each
transaction is a new and different learning experience for the Buyer, but the
Seller, especially if a builder, has done this many, many times and knows the
subtleties of the business. No contract can address all the issues with
a new build. Ultimately, it is the reputation of the builder that needs
to be relied on. Be wary of builders who have not lived up to their
representations or who have been sued. Owning a boat should be a good
experience, weather and maintenance issues notwithstanding.
