Broker Lawsuit: Not All Yacht Surveys Are Created Equal

SOME, INDEED TOO MANY, BROKERS FAIL TO PROPERLY EXPLAIN TO THEIR CLIENTS THE DIFFERENCES BETWEEN VARIOUS TYPES OF YACHT SURVEYS

Preface: This article on yacht surveys is being published as background for the series on the Brokerage lawsuit that Peter Swanson (Loose Cannon) and Phil Friedman (For Yacht Builders, Buyers, and Owners) have teamed up to cover for the duration.

For the record, this piece is based on my 30+ years as a designer, boatbuilder, boatyard manager, and — yes — an occasional surveyor. It is neither represented, nor intended to be legal advice; and anyone involved in the purchase or sale of a yacht is advised to always seek competent legal advice when any significant sums are involved.

I expect that when this piece appears, I'll receive, as usual, correspondence both critical and supportive. I also expect that in virtually all cases, it will also, as usual, be tagged as private by industry people who do not want to speak publicly about the topics being covered in this series. Which I understand — since I don’t expect industry practitioners to risk pissing off those with whom they have to do business daily. However, I’d like to suggest that, if you disagree with something I say here, send me a comment to make your case. Because open discussion is what it’s all about. — PLF

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Surveys are an integral part of almost every yacht buy/sell transaction — at least of those which involve more than just a few thousand dollars. And yacht surveyors, like the providers of yacht documentation services, are symbiotic fellow-travelers of yacht brokers. Moreover, most, if not all yacht surveyors — again, like most, if not all yacht brokers — use carefully constructed disclaimers in their agreements in an effort to avoid potential liability for errors and omissions. Consequently, it’s fitting that a discussion of yacht surveys and surveyors finds its way into the ongoing saga of the current legal challenge to the way yacht brokerage and closely related companies conduct business.

Why Just Any Survey Won’t Do

When someone decides to buy a pre-owned yacht, the first piece of advice he or she gets from the broker(s) involved is “Be sure to get a survey.” Which may generally be good advice — but only for as far as it goes.
 
The problem is there are several different types of yacht surveys, not to mention significant variations in qualifications from surveyor to surveyor. So, “getting a survey” becomes quite a bit more complicated than, say, ordering a pizza. Certainly more complicated than the yacht broker — who gives the buyer a short list of (usually three) recommended surveyors from which to choose — leads the client to believe.