Saga - How to NOT BUY a Boat - A Canadian/US Story (very long)

Saga - How to NOT BUY a Boat - A Canadian/US Story (very long)

Post by Page » Sun, 13 Jul 1997 04:00:00

How to NOT Buy a Boat - A Canadian/US Saga

Warning: This is not intended to scare newbies away from boating.  It is
a fun and worth while hobby.  The following true saga is to allow me to
vent my frustration, and may give a few pointers on things to look out
for when trying to buy your boat.

PROLOG
Around February of 1996 the bigger boat bug bit, causing a reflex action
to buy / read every boat add that passed my way.  At the same time an
urge to buy a dock for the boat hit, causing a I want to buy SOMETHING
frenzy.  The summer came and went as a time of unfulfilled buying urges.

CHAPTER 1 - A boat is Found
The fall of 1996 I decided the new dock wasnt going to materialize.  At
the same time a broker in Canada called to say they had a couple boats I
might be interested in, a 38 Cigarette Flat Deck, and a Formula 357.  
After a flurry of phone calls, letters and photos, an offer was submitted
for the Cigarette.  After a week of nothing, a counter offer came back at
more than the original asking price!  The boat buying went back into
hibernation.  A little later an offer came in for our house, so the
search for a dock was back on.

CHAPTER 2 - The boat is re-found
Christmas 1996 saw the paperwork signed for a new house on the water.  
Plans were quickly put in place for a larger dock, that could hold the
still elusive 40 offshore, with space for a racing sailboat for my wife.
 By April the dock was in place, and another call came from the broker in
Canada...the boat was seriously for sale, was I still interested. Yes,
I was once again on the hunt for a new play toy.  Offers were bandied
about and finally A Deal Was Made!  I might actually have a new boat in
time for summer.

CHAPTER 3 - Things get complicated
The boat was surveyed (a very good surveyor) and found to be as
advertised.  A trip was planned for the sea trial.  

The first snag - exchange rates:
The seller changes his mind and wants the payments in Canadian dollars,
as he cant get the same exchange I have been using (from the Federal
Reserve Bank of NY).  Further, the boat is owned by his company, so he
wants three checks: 1) deposit, 2) check to the company, and 3) check to
himself.  A quick trip to the credit union for a Canadian cashiers check
for the deposit...which will take them 5 DAYS! to get issued.  The
solution, travelers checks...91 of them!.

The morning for the sea trial arrives with a high fever.  A 2 hour
flight, and three hour drive and I arrive to see the boat for the first
time.  The fever subsides long enough for the sea trial, and the deal is
finalized.  A couple of days for paperwork and the boat could be shipped
the end of the following week.

First order of business is to check the Canadian and US titles for
outstanding liens.  Two Canadian liens are found easily (which the seller
had forgotten to mention when he asked for payment to be made direct to
himself and his company).  Search of the Coast Guard documentation files,
the old documentation number was located during the sea trial, took
longer.

The second snag - he doesnt own the boat!
The abstract of title from the Coast Guard finally arrives....showing an
unpaid lien from 1989 for much more than the current value of the boat.  
The seller had provided a title trail that started with the original sale
from Cigarette, had a US Florida title, the initial Canadian registration
(not a title), and the current Canadian registration.  Only problem was
it skipped completely the three other US owners when it was a Documented
boat...including of course the owner with the open lien.

A call was made to every E.L. (name withheld) in South Florida, the
owner after the open lien, only to find none of them had every owned a
Cigarette.  The lien holder was called, they had sold their marine loan
business, and their files were only account numbers.  Someone would have
to search the archives by hand to see if they could find the loan in
question.  Two weeks of work by many individuals goes by, but it is
finally determined that they cant find any record of the loan being
paid, but they also cant find any record of the loan NOT being paid.  
Since they made several other loans to the same person after the missing
loan, they would agree it was paid and sign a release of the lien in a
couple of days.

Snag #3 - the contract has expired
While MY loan agent has been busting his buns to clear up the SELLERS
title to the boat, the purchase contract has expired.  No big deal right?
 The seller has been kept informed of the problems and work to resolve
them, we now know the problem will be solved in another day, so an offer
extension is sent to the broker.  Two more days pass (but the seller has
always taken several days to do anything) but the extended offer isnt
Faxed for signing.  (Fax is the only way to communicate with Canada.  
Mail takes a week, and Fed Ex, while painless in the US, is not very
useful to Foreign countries).

CHAPTER 4 - The boat is gone
I call the broker, who was on vacation the prior day, to inform her that
the paperwork to clear the title is complete, but I still havent
received the extended contract to sign.  I was just told that Michael
was by the marina yesterday while I was off and took some people out on
the boat.  I think he might have sold it.  (I didnt learn till another
two days that he had also TAKEN the boat with him when he left.)

EPILOG
We never could reach the seller to confirm that the boat was sold (he
wouldnt return phone calls from the broker or my loan agent).  The
broker is going to return my deposit (although I get to eat any losses
due to passing through the exchange rate again).  She will pass my list
for buyers expenses to the seller.  Officially, the broker company
doesnt consider him to have defaulted on the sale as he had a clear
Canadian title.  They plan to ignore the fact that he was offering to
sell the boat to the US, and he didnt have a clear US title.  The seller
is also a good friend of the brokerage owner, so they arent going to ask
him to pay the commission either (which would be due if he broke the
contract for not having a clear title).

So it ends.  I dont have a new boat.  Im out a grand in expenses.  My
loan agent is out two weeks of hard work and a mega phone bill.  The
broker claims nothing wrong happened.

The m***of the story:
I normally would not have had a loan agent involved, I prefer cash, and
would likely have bought the boat and brought it home long before
discovering the hidden lien, and would never have been able to find all
the connections to clear it up.  If youre buying a boat from a
state/country that doesnt have a full title search..DONT.

If you plan on getting Coast Guard documentation, which I now consider
MUCH more useful, make sure the documentation is in place before the deal
closes.
Florida had no idea if the lien was paid or not (at least couldnt prove
it by their files) even though they had issued a state title after the
lien was lost in the buyer trail.

Dont allow anything not written down.  Even though the seller was in the
loop on all the title work, as soon as the contract expired he was free
to take advantage of all our work to clear the title, with no
commitment to hold up his end of the deal.

CAST of PLAYERS

THE GOOD -
My loan agent, Lighthouse Marine, who busted his ***to make things
work, kept everyone informed on the progress, was the one who caught the
fact that the contract had technically expired, and was rewarded by
nothing but a big phone bill.

Also, the surveyor, Fastnet yacht Surveys, who found a couple (minor)
things that I had trouble finding even knowing where they were.  Im not
a novice, but would never have been as thorough as he was.

THE BAD -
The broker, Team Hot Knots, who seemed competent when things were going
well, didnt have a clue when problems surfaced, never noticed that the
contract had expired, and wimped out entirely on the side of the friend
of the owner in the end.

THE UGLY -
The seller, Triple S Foods, a.k.a. Michael Craig, who is at best a jerk
(strictly my opinion), and at worst at least partly dishonest.

THE STUPID -
Who ever the ultimate buyer of the boat is.  My only consolation in this
whole saga is Im sure they paid much more for the boat than I was going
to.  Also, since the US title problems can be solved, but arent
recorded, they will run into this all over if they try to sell the boat
to the US, or register it in the US themselves.  IF you see a 38'
Cigarette with a race 1 and the name CIGARETTE on the side, BEWARE!

Also, one of the dealers who sold the boat in Florida way back in 1989
remembers the DEA being interested in the boat and its where abouts.  
Wonder if I should drop them an anonymous note?