Buying or selling a boat in the UK: resolving problems from a survey or sea trial

A survey allows for an independent assessment of the boat’s condition. A buyer can make an informed decision about the boat, for example considering any structural defects, safety concerns or electrical issues before committing to the purchase.

A sea trial can reveal performance issues that only become apparent when the boat is on the water. This could include engine problems, navigational issues or steering difficulties.

Where these result in significant concerns, buyers should assess their options before committing to the purchase. A buyer’s options might be limited in the boat purchase agreement so the terms of the agreement should be checked to see if a resolution has already been determined.

If the agreement is silent or an agreement was not entered into, the buyer has multiple options available:

Option 1: continue with the purchase

Not every result from the survey will be a cause for concern. Some are simple maintenance issues that can be easily resolved. Others are standard wear and tear.

The buyer will need to commercially decide if these defects are an issue. The buyer might choose to proceed on the agreed terms and accept responsibility for repairing these defects.

A key consideration for a buyer is whether the issues that have been identified mirror the buyer’s expectations when the purchase price was agreed. If they do, proceeding with the purchase could be a sensible option.

Option 2: renegotiate the purchase price

Buyers as a result of the defect might take the view that they will incur costs shortly after completion that the purchase price did not reflect.

Parties could agree to reduce the purchase price to reflect the costs of repairing the defects or the difference in value between the agreed purchase price and the maintenance expenditure.

Unless bound by contract through the agreement, sellers do not have to agree to a reduction in price. Still, it might be a commercially sensible compromise.

Option 3: seller repair the boat

A buyer might prefer that the seller repairs the boat prior to the change of ownership. This is particularly useful where the defects can be clearly identified and rectifying the defects can occur in reasonable time frame.

Where repairs are agreed to be rectified by the seller, it can be useful to document this in order to avoid disagreements over what defects are being addressed, the standard of repair required and when the work will be completed.

Option 4: retain part of the purchase price

The parties might agree to proceed with the transaction. However, a reasonable part of the purchase price is retained by the buyer until the repairs are completed.

This can provide reassurance to the buyer that the repairs will be completed which also ensuring that the sale is completed.

Again, this should be clearly documented in order to avoid any disputes as to costs and timing.

Option 5: walk away from the deal

Sometimes the buyer might decide that the survey or sea trial results are so problematic that the boat is not worth purchasing.

Where the transaction is conditional on a survey and sea trial being completed to the buyer’s satisfaction, the buyer might have the ability to do this. Whether the buyer can do this will entirely depend on the drafting to the purchase agreement.

This is by far the most extreme solution. However, a buyer, when analysing the defects, should consider whether the defects mean that the boat no longer represents the terms that were originally expected.