Warranty Woes

I purchased a new boat last year and have had nothing but problems since the first day. If it’s not one thing, it’s another. The dealer continues to fix the problems under the warranty, but a new issue seems to surface every time an old problem is repaired. At this point, the boat has probably spent more time at the dealer’s dock than at our regular slip. Do I have any recourse against the manufacturer? Is there a ’lemon law’ for boats?

In a recent edition of this column (’Dealing With Disclosure,’ Nov. 30, 2006 issue), we compared the strict legal framework under which a buyer is protected in a real estate transaction, to the vague and complicated protection available to the buyer of a yacht. The legislature simply did not consider the issues faced by the yachting community when the transfer disclosure law was drafted. Boaters ran into the same problem in connection with warranty repairs. The ’lemon law’ protects the buyer of a new car from the frustration described above, but it fails to extend much of that protection to the buyer of a boat. Once again, we are on our own.

As the buyer of a ’consumer good,’ a boat buyer in California is protected by a body of law known as the Song-Beverly Consumer Warranty Act (California Civil Code sec. 1790). The Song-Beverly Act enforces manufacturer’s warranties on all consumer goods sold in California. It covers everything from computers to refrigerators, and it does cover the purchase of a new boat. Under this law, a manufacturer that fails to fix a problem under warranty after a ’reasonable number of attempts,’ must either replace the product or reimburse the buyer for the purchase price, less the amount ’directly attributable to use by the buyer’ prior to the discovery of the problem (depreciation). Failure to comply with the law will subject the manufacturer to strict penalties.

The Song-Beverly Act has one glaring problem for the buyer of a new boat: It fails to consider that a boat is a complicated machine, with a long list of complex systems that may be subject to failure. A manufacturer will be in compliance with the Song-Beverly Act if it repairs each of those failed systems within a ’reasonable time,’ notwithstanding that it may have deprived the owner of the use of the boat for many months of accumulated downtime during the repairs. Song-Beverly may work fine for a toaster or a television, but it does not adequately protect the buyer of a new boat.

In contrast, new car buyers are in a much better position. California’s ’Lemon Law’ is set forth in the Tanner Consumer Protection Act (Civil Code sec. 1793.22), and the scope of the law is expressly limited to ’new motor vehicles.’ The Tanner Act offers a number of protections to the buyer of a new car, including a requirement that the manufacturer replace the car or refund the purchase price if, during the first 18 months or 18,000 miles, the car is out of service due to warranty repairs for a cumulative total of more than 30 calendar days. A new car buyer would therefore be protected under the scenario described above, where each individual problem is repaired but the cumulative effect of all the repairs amounts to months of downtime. Further, under the Tanner Act, the new car buyer is entitled to a refund of the full purchase price without any deduction for depreciation.

Most of the 50 states have some sort of ’lemon law’ protection, and the law is almost always limited to buyers of new cars. Exceptions may exist, however, and the best approach for a boat buyer with a continuing problem is to document all of the repair efforts and contact an attorney for advice on his or her particular case.