Vessel Disclosure Statement Help

Discussion in 'All Things Boats & Boating' started by Barry, Feb 10, 2016.

  1. Barry
    Joined: Mar 2002
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    Barry Senior Member

    Over the years I have purchased two ocean boats up to 46 feet and both times the surveyor was unable to discover deficiencies that became apparent within the first year of ownership.
    I am now looking at a 10 year old, 1000 engine hour boat that appears to be well maintained but as the price is around 500k, I am cautious about entering into a Purchase Agreement without obtaining information from the seller for the time that he has owned it.
    The wording on the brokers Purchase Agreement includes the clause "The purchaser recognizes that the vessel is sold "AS IS" and "WHERESHELAY"
    Due to the cost involved, I tried to find a standard form of questions that I would want answered to put myself at ease about any mechanical or structural but was unable to find anything on the net. So I took some of the incomplete items and added my own.
    In most states, if you buy even a 250k house, a Property Disclosure Statement is required by law to protect a buyer but it does not appear that there is anything required to protect a buyer purchasing a boat. As components of a boat can be much more expensive than components of a house, ie engine 70k, genset 20k, watermaker 20k, davit 20k etc., I am surprised that a such a requirement is not needed.

    I have attached what I think are some pertinent questions that I would think should be asked of the seller. But as there are numerous aspects to consider, I am afraid that I have missed some of the obvious and am asking the contributors to look over the document and offer any suggestions as to other questions that should be asked.

    I would not put in superfluous items, like "have you ever had to replace a bilge pump" but want to focus on those items that could be significant down the road when the broker has his commission and the seller has his cash.

    Thanks
     

    Attached Files:

  2. Ad Hoc
    Joined: Oct 2008
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    Ad Hoc Naval Architect

    Barry

    You are approaching this the wrong way. If you have any doubts about the vessel, always walk away. However, the other course of action is to hire a naval architecture/surveyor to review the whole boat, from keel to mast and at the same time they should perform due diligence on what is or is not seen or known and provide their findings in a report.

    This is a small price to pay for a vessel circa $500k
     
  3. Barry
    Joined: Mar 2002
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    Barry Senior Member

    Agreed re the survey and the purchase agreement would include a survey, mechanical inspection, spectrographic oil analysis, sea trial etc.

    Our first ocean boat had been sunk, floated, and refurbished, which we found out later. The survey did not pick up on this. We lost two vdrives, a starter, alternator and a few other items due to salt water egress over the first several months.

    The survey only does so much. As the Disclosure Statement would form part of the Purchase Agreement, the seller pretty much has to list issues during the time that he owned it or he could become liable.
    I am not worried about the current condition of the boat but would like to know if say one of the tanks had developed a leak, how was it repaired. Or on this particular type of vessel I have been told that the rudder post needs a significant rebuild every 10 years or so. Something that perhaps a survey might not pick up on. Recently on another boat , the broker listing had the hours rated at 1100 hours but the oil change mechanic, had written the hours on the filters at 1550 hrs, to keep track I guess. mmm???
    One hour meter, one engine and a significant discrepancy

    Anyway just trying to find out if others could point out areas that I may have missed
     
  4. rxcomposite
    Joined: Jan 2005
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    rxcomposite Senior Member

    Barry- The survey is called a pre-purchase survey and the service is available from 3rd party Class A surveyors. It is almost similar to condition survey where the condition of the hull is surveyed (underwater inspection optional), the machineries are mechanically tested, and the associated navigation and communication equipment are demonstrated in working conditions. In addition, LSA's are listed and noted as to date of expiration/condition. This will also include the ship's papers and relevant documents available from time of build. most specifically the original vessel's name.

    In most cases, the defects are just noted. Hidden defects such as telltale signs of leaks or oily bilge could be a sign of just poor maintenance or an expensive repair. The surveyor inspect "only what he/she sees". The surveyor cannot remove or open any part of the ship to inspect but he/she can request for a manhole/door to be uncovered to inspect cavities/bilges. He/she can also request packages/supplies/cargo be moved so that he/she can inspect the blocked way.

    This type of survey can take more than a day.

    Estimates of would be repair is best approximated by boat/ship yard or experienced yard inspectors.
     
  5. Barry
    Joined: Mar 2002
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    Barry Senior Member

    I understand the survey process and it will be part of the due diligence. As I stated earlier though, that hidden damage or significant repairs that would not be easily discovered by a licensed surveyor is what the target here.

    A "On the Purchase Agreement " set of disclosure questions and answers formalizes what has happened to the boat during the ownership period and would make the seller liable if there was some repair, not recognized by a surveyor in the vessels current condition.

    On a more global overview, if such a document was part of a broker taking a listing, then a seller trying to get rid of a boat with an inherent defect that might not be caught by a surveyor, would have to report the defect, or be liable if it presented itself in the future.

    This would then protect a broker from perhaps unknowingly stating to a prospective purchaser that the boat is in excellent shape. Ie it would be more of " here is the listing and here is the Disclosure Statement" and inherent problems or problems that happened before would be known to the purchaser. As compared to buyer beware.

    Thanks
     

  6. Ad Hoc
    Joined: Oct 2008
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    Ad Hoc Naval Architect

    How deep are your pockets and how patient are you?

    There comes a time when any second hand product shall have flaws. It is up to the purchaser to decide if such flaws which are outside the purview of normal inspection are acceptable. Since any second hand product shall have flaws, the harder you look the more you shall find. The severity..well, that is all relative.

    What you're asking is akin to buying an old house but the survey doesn't show/highlight the front door is not original, but a repaired one. It still closes, it still locks..but just not the originally fitted one. A normal survey would not show this, since its function...as a door...works!

    Thus if you want such a detailed survey report, you need very deep pockets and a lot of time. As this is not a 5min job nor would any survyor really offer such a service too. Since if they missed that 1 nut and bolt that was not screwed in correctly, as per your expectations, they fear a law suit against them.

    Seems you want a 100% guarantee of a second hand product.....no such things exists on anything second hand. That's why most people buy from a well known brand and from a well known supplier. Beyond that...lap of the Gods!
     
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