Buyer beware or use of a Seller's Disclosure Statement

[neotoma]

As written somewhere within these forums, the seller has all the knowledge about the boat and the buyer is left the onerous task of finding the "ghosts" as best as and by whatever means he/she can. Who in their right mind would play this game but we do it every day. As a soon to be first time buyer of 40+ ft sailboat, I'm thinking a "seller's disclosure statement" as is common pratice in real estate might help level the playing field. For the benefit of those not familiar with the statement it basically through a series of questions asks the seller to tell you everything he/she knows about the boat. Lying is seriouly frowned upon. Refusal to complete the form should make you question the sanity of purchasing the boat. Has anyone used one? Your comments would be greatly appreciated. Thx.

[k1vsk]

Might be a good idea but I'm not sure if it could be useful in most circumstances. What would be the value-added as long as you first do your due diligence and then obtain a thorough survey?

Doing it the old-fashioned way in which a knowledgeable buyer first inspects a boat before contracting for a survey should normally suffice.

On the other hand, it certainly can't hurt and can be quite telling of the seller's veracity which in and of itself can valuable.

[neotoma]

I hope I'm doing this right.
Thx k1vsk for your reply.

I'm probably overly suspicious but I'm thinking along the lines of : Are you aware if the boat has ever had or shown any signs of blisters or soft spots in the fiberglass? If so, where were they? Have they been repaired? When? By whom? Hopefully me or my surveyor will catch the current ones.

or; Is a record of all maintaince work, and all repair work specifing what, when, why and by who, available for review.

These questions deal with items that my due diligence would be very hard to detect and I suspect even a good surveyor might miss.

Further thoughts? Looks like you have been at this for awhile so I value your opinion. Thx.

[k1vsk]

There are others here more experienced than me who will hopefully chime in.
You are in a limited fashion staking your choice on info provided by a seller. Granted it may turn up otherwise unknown info even a surveyor might miss. I would prefer to go into the deal supposing there is damage, past blister issues, grounding, delamination, history of similar boats, etc.. and use my own experience and that of my surveyor to prove otherwise.

The show-stopper can often be something neither you or the past owner even knew about.

I guess it all boils down to how suspicious you are and I guess mine is showing.

[hellosailor]

neotoma-
You might ask if they know or have suspicion of any damages, concealed defects, accidents, repairs, structural issues, or, simply add into the purchase agreement a statement that they attest they DO NOT have any knowledge of any such issues. (Which would make it a fraud to sign the agreement if they did know about them.)
A separate document might scare them away, while something the in the purchase agreement might just motivate them to remember and adjust.

[poopdeckpappy]

neotoma, another go idea is obtain a boatfax ( carfax for boats ) enter the HIN and it may come up with hits from anything from liens to repairs or clean bill of heath. Add that to a survey and your off to a good start

[jameswilson29]

I think that is a great idea. You make your contract contingent upon a satisfactory survey, inspections and sea trials. In your contract, the seller must disclose his or her knowledge of the condition of the boat because the disclosures would affect your decision to buy the boat and the price you would be willing to pay. The disclosures are material inducements to your decision to enter into the contract. If you could prove that the seller knew about something and lied, you may be able to prove fraud, void the contract, and recover the costs of your survey and other damages you have suffered due to the seller's misrepresentations.

Since the disclosures only concern the seller's knowledge of the condition, an honest seller should not balk at the disclosures and you will be able to flush out the dishonest sellers trying to sell a boat with known defects before you spend money based on the seller's representations.

[sailingfool]

The industry practice today basically is that you are buying a boat "as-is"..subject to whatever due diligence you are wise and capable of doing. While sellers may share antedotal information about their ownership, no seller is going to go on the hook legally when the common practice is otherwise.

While it would be nice for buyers, it ain;t going to happen.

[jameswilson29]

I agree that has probably been the practice with brokers and manufacturers' reps, primarily because it is an emotional purchase, most buyers are usually not prepared with their own contract, and most buyers will accept the manufacturer's or broker's form contract used to protect the interests of the seller and/or the broker.

Although the tradition has been "buyer beware", there is no reason when dealing with a private seller in this market to not be prepared with your own contract that shifts some of the liability to the seller's side. If a private seller is honest and anxious to sell, why not disclose known defects?

[Jeff_H]

Even in this market I would refuse to prepare and sign a Seller Disclosure Statement not because I have anything to hide, but because it opens the door for unreasonable litigation. To be frank, if and when I sell my boat, I would dislose any aspects of its history and condition that I would consider relevant and/or less than perfectly ovbious to a surveyor. I consider that the ethical responsibility of a seller. I would reveal any and all of these items to the broker and authorize the broker to make sure that this info is passed along to any potentially serious buyer. I know that many sellers take a let the buyer beware policy and that is their business. I suspect most long term sailors understand the questionable ethics of that and would do as I would in terms of providing reasonable disclosure.

The problem with a sellers statement is that there may be things that a seller simply does not know about but the buyer thinks that they should know and so sue the seller. That is what happened with Real estate Seller Disclosures. At one point, percieved lack of disclosure in seller statements was one of the fastest growing forms of real estate litigation. At this point I think that State legislatures saw the courts being clogged with frivilous Seller Disclosure cases and so I think that seller disclosure cases have been severely limited by many state laws.

In any event, if someone presented me with one of these, I would be looking for language that held me harmless and defended me against any form of liability before I would sign one, and even then, I think I would tell the buyer, that I would not sign it.

Jeff