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Should I Sign a Release to Protect My Broker in Case of a Deficient Survey?


Posted: September 26, 2013  |  By: David Weil, Esq.

I made an offer on a 40-foot sailing yacht, and I now have two weeks to complete a sea trial and survey. I asked my yacht broker to recommend a marine surveyor, but he won’t do so unless I sign a release to hold him harmless if he refers me to an incompetent surveyor. That seems a little heavy-handed to me. Should I sign the release?
Yacht brokers are in a tricky position, when it comes to recommending a marine surveyor. Their clients rightfully look to them for expertise and counsel in all matters relating to the purchase of a boat, but they fear that they may be liable for any problems relating to the purchase, including problems that arise from a negligent marine survey. Since an undiscovered defect in the boat’s condition may lead to thousands of dollars in repairs, the recommendation and selection of a surveyor is critical to the success of any boat purchase.            

Surveyor recommendations are complicated by the fact that surveyors are not licensed by any government agency. We discussed surveyor licensing several years ago in a previous installment of this column (“Ask A Maritime Attorney -- Marine Surveyors Don’t Require Licensing,” in The Log, July 26, 2007), and we noted that it may not be practical to license surveyors because of the wide range of services they provide.            

In fact, the pre-purchase inspections that are familiar to the yachting community comprise only a small part of the marine survey industry. Many surveyors work exclusively in marine insurance investigations, commercial voyage consulting, inspection of large commercial vessels and testifying in court as marine experts.            

Due to this lack of government oversight, buyers often rely on a surveyors’ membership in one of two trade organizations. The National Association of Marine Surveyors (NAMS) and the Society of Accredited Marine Surveyors (SAMS) both assist their members in maintaining a high standard of professionalism, but membership is not mandatory and a qualified surveyor may choose not to join either organization.            

In practice, a referral to a marine surveyor will be based on the surveyor’s reputation in the community and upon the experience of your yacht broker with that surveyor. That’s not much to go on. A referral from a broker is, therefore, a good starting point -- but a buyer should never follow this kind of advice blindly.            

Ask your broker to explain why he is recommending a particular surveyor. What are the surveyor’s qualifications? A red flag should go up if the broker is unable to explain why he or she has recommended the surveyor.            

How often has that surveyor worked with the broker? If a surveyor has worked with a broker on an extraordinary number of deals, they may be too closely connected for the surveyor to be truly objective.            

After choosing a surveyor, the buyer should be fully involved in the inspection process. A buyer pays good money for an experienced professional to inspect the boat, and most surveyors are happy to walk the buyer through the entire inspection process. In short, a buyer should remain fully engaged in the purchase process.            

In the transaction described by our reader, the broker has asked the buyer to sign a release, to protect the broker against a deficient survey. If properly drafted, this kind of form will probably be enforceable, but it is impossible for us to advise the reader to sign the release without knowing more about his particular circumstances.            

In the end, the buyer’s best protection may be to stay engaged in the process.
David Weil is licensed to practice law in the state of California and, as such, some of the information provided in this column may not be applicable in a jurisdiction outside of California. Please note also that no two legal situations are alike, and it is impossible to provide accurate legal advice without knowing all the facts of a particular situation. Therefore, the information provided in this column should not be regarded as individual legal advice, and readers should not act upon this information without seeking the opinion of an attorney in their home state.
David Weil is the managing attorney at Weil & Associates (www.weilmaritime.com) in Long Beach. He is an adjunct professor of Admiralty Law at Loyola University Law School, is a member of the Maritime Law Association of the United States and is former legal counsel to the California Yacht Brokers Association. He is also one of a small group of attorneys to be certified as an Admiralty and Maritime Law Specialist by the State Bar of California. If you have a maritime law question for Weil, he can be contacted at (562) 438-8149 or at dweil@weilmaritime.com.

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