Motor yacht purchase through surveyor/broker
Trust in the legal system was restored for one of our clients after three years of appeal before the Flensburg Regional Court. The client wanted to buy a used motorboat and, due to travel restrictions during the Covid-19 pandemic, sought the assistance of an appraiser and broker from West Germany. A suitable boat was found in the Netherlands: at least at first glance, it met the requirements. The appointed appraiser was supposed to examine it more closely, but ultimately failed to do so. Therefore, a parallel legal dispute is now pending before the Hamm Higher Regional Court, after we successfully held the appraiser/broker liable on behalf of our client in the first instance. After the appraiser had recommended the purchase, the boat was delivered to the client’s location, and a workshop took care of some technical issues, but unfortunately, not everything that the appraiser had simply failed to inspect was addressed. The workshop claims to have cleaned and polished the boat’s exterior, but due to the boat’s poor condition, this was hardly noticeable.
It is unclear who commissioned the renovation work.
We got the impression that the workshop had initially pursued payment for all services from the appraiser/broker, was unsuccessful, and then ultimately sued our client as the new owner of the boat. In the first instance, the arguments presented regarding various orders were, in our view, rather incoherent, and it was unclear whether these were orders directly from our client or orders issued on his behalf by the appraiser/broker. To our surprise, the local court then accepted a so-called implied authority and ordered our client to pay the invoice for the exterior cleaning and polishing.
First instance decision in the appeal
Sometimes you need a strong stomach and have to appeal. That’s exactly what we did. In the hearing before the appeals chamber of the Flensburg Regional Court, our legal assessment was upheld, and even the opposing counsel’s arguments didn’t change anything: The Flensburg Regional Court accepted the appeal and dismissed the contractor’s lawsuit against the new motorboat owner. Our client therefore doesn’t have to pay for the alleged exterior cleaning and polishing services.
It is unclear who commissioned the renovation work.
Essentially, there was a lack of a clear explanation of how the order came about. The regional court then confirmed our legal assessment that there could be no question of an order being placed on behalf of the buyer or of implied authority.
Good for our client.
But what exactly does that mean for real estate agents, brokers, and boat buyers?
In general, it is sensible and important, especially in brokerage transactions, to pay attention to who is actually acting for whom. Is the broker acting in the name and on behalf of the buyer or prospective buyer?
What should a shipyard/contractor take into account?
Does he actually have the authority to do that? This is a question that a contractor providing services in this context should ask themselves in particular.
What should a buyer/prospective purchaser consider?
However, a prospective buyer of a boat should not send their broker or agent on their way without a clearly defined mandate. Our client did just that. However, the agent failed to present his power of attorney to the contractor. Of course, the prospective buyer is ultimately not at fault for this, and therefore the decision had to be in our client’s favor as the buyer.
What should a real estate agent/broker take into account?
A real estate agent/broker would also be well advised to protect themselves from potential buyers regarding the decisions they make in the interest of completing a deal. Specific, individualized agreements, which can be prepared systematically, are helpful in this regard, while of course adhering to the limits of content control under the law governing standard terms and conditions. It is worthwhile to draw up a standardized contract process with legal counsel.
Judgment of the Flensburg Regional Court
as court of appeal: Flensburg Regional Court, judgment of 17 July 2024, case number: 1 S 70722
Contact person for boat purchases through intermediaries
For questions regarding boat purchases with intermediaries/brokers and the coordination of work or services carried out in connection with the yacht purchase, please contact attorney Jochen-P. Kunze and attorney Max Lessner at Yacht-Recht and Baltic-Recht.