Features January 1, 2000 Issue

Consumer Alert: Surveyor Problem

I purchased a 1990 Beneteau in Florida in 1995 for $75,000 that had been in charter for five years in Tortola. The boat was on sale by the charter company in Fort Lauderdale. The surveyor advised me that seven large osmotic blistering and water penetration of the vessel’s hull were cosmetic even though high moisture readings were taken on the entire bottom and in fact three out of the four layers of fiberglass were so saturated with water that they were beyond being dried out and had to be removed. The company’s broker who was representing me and the seller did not contradict the surveyor’s opinion.

During the survey, I requested that the surveyor perform a laminate profile but he convinced me it was not necessary.

After purchasing the boat I discovered the real extent of the damage and had Manning Marine Survey in Annapolis, Maryland (410/263 5852) perform a laminate profile. A laminate profile entails systematically removing single layers of laminate using a grinder. The laminates are then tested for moisture content using a Sovereign Moisture Master meter. An acceptable level of moisture content is from 0% to 5% on the relative scale. The laminates are also tested for softening using a Barber Coleman Impressor, with the readings reflecting the “Barcol” scale of hardness.

The laminate profile on my boat disclosed the following: 1st layer was soft and high in moisture at 18%. The 2nd layer was high in moisture at 20% and beginning to soften. The 3rd layer had 10-15% moisture and not yet soft. The 4th layer was low in moisture at 5% and hard.

The repairs cost me over $8,000.

I later sued the surveyor. At the hearing the surveyor’s attorney argued that the problem was a latent defect specifically excluded from the survey report. He argued that a latent defect could only have been found by opening or removal of sheathing or other parts of the vessel which the surveyor was not obligated to do under the contract. The court rejected this argument on the basis that the engagement between the parties was a verbal agreement and no written agreement was entered into between the parties. The surveyor at no time limited the scope of the survey or excluded any conditions of the vessel. I did not receive the written report with the liability limitation clause until after I had received a verbal report and had paid for the survey. The surveyor’s motion to dismiss based upon the limiting liability clause in the contract was denied by the judge. We went to arbitration and I was awarded $3,300 in damages.

I sold the boat in September 1998 for $70,000. I lost money. Except for the damage to the bottom, the boat was otherwise in good condition. It was also a fun boat to sail, being very fast. I would never again buy a chartered boat even if they gave it to me. It’s like buying a hotel room that has been used for 200 years.

The lesson is to never rely on [surface] moisture meter readings. If there is any blister damage get a laminate profile. It is destructive testing but it only costs about $200. Also, make sure you have your own broker who is not also representing the seller and make sure the surveyor is well versed on core sampling.

I believe that a surveyor should be a devil’s advocate and give the buyer all the bad news. My surveyor said to me early on, “I assume you are borrowing the money and therefore you need a good survey to get the money.” I immediately told him I was paying cash for the boat and I wanted to know what was wrong with the boat. I should have fired the surveyor then and there.

Larry Miller
McLean, Virginia

We asked Jonathan Klopmann, a Marblehead, Massachusetts surveyor, to comment. He is active in the National Association of Marine Surveyors (800/822-6267).“These situations,” said Klopmann, “are particularly upsetting for any surveyor to review. They give our profession a bad name and underscore the fact that there are still no restrictions on who can call himself a ‘qualified’ marine surveyor.

“The first detail of note is the surveyor’s defense. His attorney argues that the blistering is a ‘latent defect,’ and as such would be covered under the umbrella disclaimer on the surveyor’s report. The blisters most certainly were not ‘latent.’ They were observable with the naked eye. The surveyor is guilty of improper diagnosis of the situation, or at the very least of failing to instruct the buyer that a degenerative condition could exist.

“The issue of disclaimers has been a topic of great debate in this profession. Some surveyors use an all inclusive ‘hold harmless’ agreement, stating that ‘receipt of the report means an acceptance of all the conditions, and the surveyor cannot be held liable...etc.’ These blanket statements cannot absolve a surveyor of his professional responsibility. Legally, a professional will be held to the same standards of routine practice as determined by his colleagues—he does not have the right to determine or limit his own boundaries of liability.

“A surveyor should describe his services upon being contracted for the job; that way, the boat owner knows what he is getting. It is perfectly fair and right for a surveyor to mention at this time the limitations imposed on his inspection. For example, the profession generally considers extensive removals, equipment disassembly and destructive testing above and beyond the call of duty for the average survey.

“If a conflict over a surveyor’s competence or ethics arises, the owner should contact the surveyor’s professional organization. The National Association of Marine Surveyors, for example, will hold a formal grievance committee to investigate any severe transgression of its members. Without one, the owner is on his own.

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