Last month, Superyacht Buyer spoke to an owner who was subject to a $1.5 million setback as a catastrophic consequence of circumventing a thorough surveying procedure for his new build. This is all despite having previous experience with surveys – prior to this, he had turned away a new build as a result of a well-conducted survey.
In addition to the survey guidance given to an owner/buyer from his/her advisors, information on how to ensure a rigorous and, hopefully, risk-averse pre-purchase condition survey is clearly of importance to not only industry newcomers. Superyacht Buyer spoke to Peter Chettleborough, director of Winterbothams Ltd., for his advice on how to make this a smoother and trouble-free process.
Words of Peter Chettleborough:
1. Communication: Don’t keep surveyors in the background. After we give our quote, as we are not a party to the contracts - we sometimes don’t hear anything for some time and then we’re expected to drop everything and be completely flexible. A survey needs to be organised early to ensure the timings can be kept and all personnel required are available.
2. Scope of survey: We will always strongly recommend a haul-out and sea trial for completeness on the grounds of due diligence. If a full survey is not carried out, it will be necessary to put yourself at the mercy of insurers. Do not limit a surveyor’s inspection to specific aspects of the yacht unless you are prepared to have a report drowning in caveats, which will render it next to worthless.
3. Sample reports: I’d also highly recommend seeing a sample report before choosing a surveyor. The report style, and the information it contains, differs hugely from surveyor to surveyor. You will then see if a surveyor is simply a ‘tick-the-box’ type prior to having the survey undertaken. You might think that’s ok, but if you’re looking for something more substantial, you’d want to know beforehand.
4. Timings: It will take about one week to complete the survey, inclusive of hauling and sea trials. This can be done either in a week or staggered due to availability. It then takes another week to write up the report and wait for the results of any oil or other samples that have to be sent off to independent laboratories. It must be acknowledged that it can sometimes take two weeks from the commencement of the survey to publication of the report.
5. Hiring specialists: Planning early allows you to secure specialists for the survey. For instance, bringing in the manufacturers of the engines, or a rigging specialist for a sail boat, is extremely important. We conducted a survey last year on a 100m-plus yacht where we brought in electrical engineers, ultra-sound specialists for the hull and we even had to fly in an engine specialist from the other side of the world. In the grand scheme of things, it’s pennies in comparison to the cost of the yacht, but it’s crucial due diligence for a buyer.
6. Insurance cover: You don’t need any form of accreditation to survey a superyacht, so if you’re employing a surveyor, always check the company’s experience and reputation together with the CVs, experience and professional qualifications of individuals and whether they have adequate professional insurance. You must ask, would this surveyor have adequate cover for an insurance claim? What would be the most expensive thing that could go wrong? Make sure the insurance-cover policy is of a type known as ‘any one claim’, which provides cover up to the full limit for each individual claim, rather than an aggregate type policy that provides only cover up to the full limit for all claims made in the period of insurance.
7. Back history: You need to know the service history of all the on-board machinery, and regulatory history. The surveyors who you employ should provide this information so that you are aware if there is, for instance, a class special survey due in a year, or the main engines are due a complete rebuild in the next six months – both of which could require significant expenditure.