Survey and haulout

[Leeward III]

We found a buyer for our boat and the buyer has scheduled a survey and haulout.
The boat yard and the broker sent us a form, we are to sign, releasing the yard for any damages incurred during the haulout and guaranteeing payment. Isn’t the buyer responsible for damages incurred and payment for the lift?

 

[mvweebles]

Oh boy, there's a backstory here (eg yard got screwed because buyer isn't legal owner of the boat).

A couple suggestions

1. Earnest money deposit. Make sure your language with the contract allows you to subtract any funds from the earnest money being held in escrow.

2. have the buyer sign an agreement that states they are responsible for all yard fees incurred, and failure to pay then will incur a 50% penalty.

3. With the yard, put a cap on your responsibility. Haul, launch, single layday, relaunch. Yard is responsible for negligence caused by their actions or inactions. Yard will immediately release boat to you upon payment for haul, launch, single payday. Any additional fees are between the yard and the buyer

4. Yard will make all reasonable attempts to collect fees from buyer, that you are second in line, not primary. Yard will promptly seek payment for services rendered. Yard needs to notify you within 4 hours of buyer refusal to tender payment.

Tough discussion.

Peter

 

[Fleming]

Basically, it's still your boat, still your responsibility.

The Buyer IS the one who normally pays for the haul out, that should have been spelled out in the purchase and sale agreement that was signed. Since it's YOUR broker who is holding the escrow deposit, as Peter said you should get reimbursed by YOUR broker if the buyer fails to pay for the haul.

The damages thing is basically the yard trying to cover their butts. I'm no lawyer, but if they are negligent they can still be sued. But damages that occur by accident or bad luck will be up to you and your insurance company to deal with.

 

[psneeld]

Basically, it's still your boat, still your responsibility.

The Buyer IS the one who normally pays for the haul out, that should have been spelled out in the purchase and sale agreement that was signed. Since it's YOUR broker who is holding the escrow deposit, as Peter said you should get reimbursed by YOUR broker if the buyer fails to pay for the haul.

The damages thing is basically the yard trying to cover their butts. I'm no lawyer, but if they are negligent they can still be sued. But damages that occur by accident or bad luck will be up to you and your insurance company to deal with.

 

[Bacchus]

You might check in with your own insurer. It MAY be that they cover a damage claim and go after yard and/or buyer.
I've asked when storage yard requested signature on a similar sounding agreement for issues occurring during haul, storage, launch... insurer told me I'm covered and it was std procedure.

 

[O C Diver]

While we're on the subject, had an interesting conversation with my insurance broker. Long and the short of it, nobody moves my boat without a Masters License and professional liability insurance. Simply, anyone moving my boat is doing so as an employee, thus requiring a license to do it (or under direct supervision of a licensed captain), and professional liability insurance, either by the operator or the company they're doing it for. Before anyone says anything, when you sign that waiver, you're accepting the liability of an 18 year old damaging your boat and the other million dollar yachts the operator hits. BTW, this extends to the yacht broker who thinks he's going to take my boat out for the sea trial with no license and no insurance.

Ted

 

[psneeld]

Interesting Ted, I get the insurance industry requring those qualifications, but I know of no law or USCG rule having those requirements just to drive someone's boat. Which means the same as having a law for most of us.

The USCG told me even having the owner and others aboard a delivery or similar ( no paying passengers) doss not require a license of any level..

Then again it could have changed recently.

 

[DavidM]

I have bought and sold 6-8 of the boats I have owned over the years as well as closed 6-8 boat sales as the yacht broker.

In none of those cases did the buyer operate the boat. Yes he did take over the helm, but the owner, broker or licensed captain stood right beside him and closely supervised it.

If the owner, broker or licensed captain crashed the boat, I believe that the owners insurance would have covered it, but one of the three would be responsible for the deductible.

And FWIW, I set up an LLC to insulate myself from such claims. Very, very few brokers are aware of their liability or care. No others in my five member brokerage house did.

David

 

[O C Diver]

Interesting Ted, I get the insurance industry requring those qualifications, but I know of no law or USCG rule having those requirements just to drive someone's boat. Which means the same as having a law for most of us.

The USCG told me even having the owner and others aboard a delivery or similar ( no paying passengers) doss not require a license of any level..

Then again it could have changed recently.

This isn't about a legal requirement, but more about liability for operating a vessel. Would imagine it's more of an issue when the person is being paid by an employer to operate the boat. While I don't know for certain, what other type of licensing is available to show some amount of competence to operate a vessel? Can you imagine your car insurance company being ok with you knowingly giving the car keys to an unlicensed parking attendant (14 year old)?

Ted

 

[Bacchus]

The USCG told me even having the owner and others aboard a delivery or similar ( no paying passengers) doss not require a license of any level..

Does that only hold true If Del'y is being done at no cost?
If Capt / operator is being paid isn't a license req'd?

 

[psneeld]

Does that only hold true If Del'y is being done at no cost?
If Capt / operator is being paid isn't a license req'd?

No ....deliveries are not considered ( at least aren't as far as I know) voyages involving "paying passengers".

Sounds like a weird distinction but unlike getting on a passenger ferry where you don't know who the captain is, on a delivery, you know the captain and his/her quals (or should).

 

[Fleming]

Does that only hold true If Del'y is being done at no cost?
If Capt / operator is being paid isn't a license req'd?

As Psneeld wrote, no, you don't need a license if the owner is on board. My 100 Ton license with endorsements expired years ago, but I can still charge owners for onboard training on their boat without a license. I can't charge them to train on MY boat, but I can charge them on theirs because they are technically the captain and responsible even if they're paying me.

 

[Portage_Bay]

Insurance may require a credentialed operator. Best to know that of your insurance carries requirements before you hand the keys to anyone. My understanding of the law is that a license is not required on deliveries, sea trials, maintenance movements etc. No paying passengers, no cargo.

However be prepared to defend yourself if need be. Not all USCG personnel are well versed in the laws. I got boarded on a delivery and asked to show my credentials. I didn't have it with me because it was expired, I was in the 1 yr grace period after expiring, seemed to me all was good for the delivery. Owner and his insurance co signed off. The boarding officer said I need to have credentials for delivery work but he would let me off "This time." Another time while working dockside, routine off season maintenance, we had a "courtesy inspection". CG personnel asked to see my credentials. We weren't scheduled to be underway for quite some time so it was home in my fire safe. I was told I had to have my credentials on me anytime I was aboard. I pointed out we had a number of critical systems down for maintenance and it was not possible to get underway. He said that had no bearing. But nothing came of it.

 

[Bacchus]

Fleming & psneeld
Thanks for the responses... interesting wouldn't have been my guess for an operator being compensated.

 

[psneeld]

Fleming & psneeld
Thanks for the responses... interesting wouldn't have been my guess for an operator being compensated.

Operators of corporate vessels working with corporate crews and corporate equipment (my best knowledge of marine construction companies) don't even need captain's licenses.

But tow another corporations equipment on the same tug/barge setup and you need a license.

That I even am not sure about when it comes to size of tow vessel...you still have to have a master or mate of tow vessel if over 26 feet I think...but been awhile and it did get confusing even when doing it all years ago.

 

[Slider70]

One of my longer term insurers - I am now with a different under-writer - required that they pre-approve anyone operating my vessel if I am not on board. I didn't change under-writers over this clause as to some degree it made sense to me.

 

[Snug Harbor]

Hopefully the broker is using the standard YBAA Purchase and Sales Agreement. Using that agreement, the Buyer is responsible for all survey related expenses and is obligated to return the boat to "same status it was in prior to the survey". The escrowed deposit may be employed to cover expenses if the Buyer doesn't pay for something. Most marinas will ask for a credit card before touching the boat to ensure they get paid. I always check with the yard to be sure they've been paid. I've never seen an agreement releasing the yard from responsibility for damages but wouldn't be surprised if one did.

As a broker, I always ask the Seller to operate the boat for the sea-trial. The Seller knows the boat and of course he's responsible. If that's not possible, I've asked that a captain be hired and suggest the owner add the captain as an additional insured operator.

 

[Steve DAntonio]

A few years ago there was an article about a claim for a total loss of a vessel, if I recall a 30 something foot Sea Ray. The owner allowed her son or nephew, I can't recall, to move the vessel from a dock to a haul out location, he ran it aground, holed it and it sank. The insurance company denied the claim because the contract had a clause prohibiting anyone who had been convicted of a DWI from operating the vessel.

Moral of the story, either read your full insurance contract and make sure you understand it, or hire an attorney, not your brother in law or friend from the yacht club, but one who specializes in insurance law and preferably has experience with the marine industry, there are several out there, to review it and brief you on the highlights and areas of common misunderstanding, and claim denials.

 

[Moonfish]

A few years ago there was an article about a claim for a total loss of a vessel, if I recall a 30 something foot Sea Ray. The owner allowed her son or nephew, I can't recall, to move the vessel from a dock to a haul out location, he ran it aground, holed it and it sank. The insurance company denied the claim because the contract had a clause prohibiting anyone who had been convicted of a DWI from operating the vessel.

Moral of the story, either read your full insurance contract and make sure you understand it, or hire an attorney, not your brother in law or friend from the yacht club, but one who specializes in insurance law and preferably has experience with the marine industry, there are several out there, to review it and brief you on the highlights and areas of common misunderstanding, and claim denials.

This is the type of post that makes this forum such a great resource for learning. Thank you, I will now do a careful review of our policy to note any "unusual" clauses or provisions.

Although I don't mind sharing the dumb things I've done (in the spirit of helping others learn from my mistakes), I really don't want to be "the moral of the story" in these types of instances!

 

[fgarriso]

I had a $3 mil blanket liability policy covering myself and our boat which was held under an LLC. My agent said if I held the highest-rated license on board at the time of an incident I could be held responsible even if I was not in command.

 

[Steve DAntonio]

A colleague of mine penned these articles on this subject...

Haul or nothing=
https://jmys.com/wp-content/uploads/2024/01/PMM-TT-Sept-2023-Haul-or-Nothing.pdf

All about the survey =
https://jmys.com/wp-content/uploads/2022/06/PMM-May-June-2022-survey.pdf