Northern Rock found itself in the unenviable position of a bank run and no matter how this has been dressed up or undressed for that matter that is what happened. The reaction of account holders was predictable and why shouldn’t it be. It was their money in their accounts and they wanted it. Now I know that will be taken by the wealthy mob as a pretty stupid statement as apparently a view has been taken that the public panicking contributed significantly to the run.
However, one must bare in mind that these pearls of wisdom are likely to come from a sector of people who unlike us lesser mortals have many holdings, investments, shares and not to mention numerous bank accounts, who are more likely to be in a position to spread their losses should they occur.
The statement issued by The Bank of England confirming that “The Chancellor of the Exchequer has today authorised the Bank of England to provide a liquidity support facility to Northern Rock” will have gone a long way to reassure many that Northern Rock PLC was and is indeed safe as it had significant backing and funding available.
But confidence has been shaken and many with accounts in smaller banks or institutions elsewhere will not be able to help but question themselves about the safety of their funds.
The FSA (Financial Services Authority) is apparently going to review the compensation facility. The FSCS (Financial Services Compensation Scheme) which is overseen by the FSA, guarantees to pay in full the first £2,000 in an account and thereafter 90% of the next £33,000 if the bank goes out of business….yes quite….what about sums over thirty five grand?
Whilst we are oh such a long way away from the thirties, the fact remains that The Great Depression of the thirties is possibly one of the most if not the most important economic event in American history. It caused enormous hardship for tens of millions of people and the failure of a large fraction of the nation's banks, businesses, and farms.
The film “It’s a Wonderful Life” with the legendary James Stewart playing the role of a banker caught up in a bank run pays tribute to this era and surprisingly despite the films age it still has a lot within the storyline that is relevant to today’s financial and social standards or lack of them some might say.
We are part of a rapidly shrinking world whereby millions no billions of pounds are traded, loaned etc every minute of every day world wide which means that everyone and every institution leaves itself wide open to instability, and just like those people in the 30’s who lost so much we should never underestimate how reliant we are on the banking industry.
Even us lesser mortals have grasped the fact that we are not the only ones that borrow, banks do it too the two questions afoot are, how safe is our money in smaller institutions, is the bottom line that true safety is in the big four? And as for ex pats abroad shouldn’t we know a bit more about what support mechanisms are in place if heaven forbid circumstances beyond our control mean we want to get our hands on our dosh and like the people saving and banking with Northern Rock, we want it now?
Consider the role of a Yacht Surveyor. Having a survey carried out before buying a boat is quite likely to be high on the list. Of course the surveyor can also provide specific technical help with a new build, a simple but worrying problem, a disagreement and sometimes as an expert witness.
If a yacht is used for charter, training, workboat or pilot duties under the Red Ensign it will need to have coding under the Maritime and Coastguard Agency (MCA) for Small Commercial Vessels (SCV). Nominated surveyors can carry out this work through a number of Certifying Authorities authorised by the MCA.
A surveyor is not much use unless he has Professional Indemnity insurance. Most are members of one or more recognised professional associations that have requirements for conduct, ethics, training and mandatory insurance. The usual purpose of a surveyor is to provide information about the condition of a vessel at a particular time. It makes sense therefore that the more information wanted, the more it will cost. The reports should be clear, concise, jargon free and easily understood. If the reader, who may well be inexperienced cannot understand the report it is usually the fault of the author not the reader. Descriptions of condition will bring peace of mind if all is well and in the worst case will highlight defects that influence the decision whether to purchase or not. Surveys reports are always useful in that they provide a checklist of things to be repaired or maintained, hopefully with some comment about the seriousness or timeframe for action.
The Surveyor is the friend of the Buyer.
Now consider the less obvious roles of the surveyor. What about the seller? When someone sells a boat (or anything for that matter) they are supposed to declare any significant problems that they know about. Despite the moral obligation to do so, this makes sense as, if the buyer already has been told about a problem he cannot come back later with a price reduction on this same point. Of course the vendor may not know about the existence of a problem at all. He might not know if a problem is significant but he will almost certainly remember the words Caveat Emptor (which means Buyer Beware) and so if in doubt as to whether something should be mentioned or not, guess what happens! If the boat is being bought with a survey however, it is the surveyor’s job to find the problems and a great deal of the responsibility is immediately taken away from the seller. Taking this further, it occasionally happens that the problems with the boat are so seriou that the buyer pulls out. In order to withdraw from the contract the buyer has to justify the decision by providing a copy of the survey or at least the relevant extracts. The surveyor has now in effect notified the owner about a problem that he should deal with because there may be a safety issue or a breach of insurance terms or other legal certification requirements. This is a point that a vendor would do well to remember when being confronted with request for a reduction in price following survey. Refusing to negotiate could mean that you end up continuing to own a boat with a problem that one way or another will cost money to put right. The boat now has a ‘history’. Somebody had it surveyed, rejected it. Why? This makes it harder to sell later.
The Surveyor is the friend of the Buyer and the Seller.
Yacht brokers also benefit from a boat being surveyed. Almost all of them (mainly because it is a requirement of their insurance or professional association) will have a disclaimer about the accuracy of their description of their boat particulars and also a recommendation that the boat is surveyed prior to purchase. The broker is representing the seller but has a duty of care to seller and buyer but is not a principal in the actual contract. By recommending that the boat should be surveyed the broker has exercised duty of care. In the event that a survey takes place, the broker is relieved from a considerable amount of responsibility about the condition of the boat. If this disclaimer was not used and no survey took place, the broker could be exposed to the possibility of a serious, obvious but undisclosed problem coming to light and an angry buyer albeit one who took a serious risk in not having a survey in the first place. It is important to note that Caveat Emptor does not apply to someone selling in the course of a business, so a broker or agent selling from stock is not allowed to say “Buyer beware”
Brokers are have to be cautious about recommending a surveyor but they can appoint one if they are instructed to do so. Most will have a short list of surveyors who have proven to have provided a reliable professional service or who have a particular expertise in a specialist field. Many brokers and surveyors have built up a professional relationship over the years, that acknowledges each other’s different but equally important roles. Surveyors will very often consult brokers over questions of valuation and brokers look for a view on damage or deterioration if there is some doubt. We are not enemies.
The Surveyor is the friend of the Buyer, the Seller and the Broker
The Insurer of an older boat, or one that is made from timber, ferro-cement or some other exotic material or one that is operating in a particular area or duty, will want to know about condition. In these cases the insurer will want to have a copy of the survey report before issuing terms or confirming a policy. As a rough guide boats made from GRP need their first insurance survey after fifteen years with another survey every five years or so after that. For a timber boat this is likely to be much earlier and the periodic surveys more frequent. The surveyor should be told if the survey is also required by insurers but in any case he should be aware of the circumstances when it is likely to be required insurers. Insurers rely on this information when agreeing to provide cover for a vessel and it is good practice for surveyors to extend their liability in the written report.
The Surveyor is the friend of the Buyer, the Seller, the Broker and the Insurer.
If a boat is being bought with finance, the lending company will want confirmation that the boat is in good condition, properly identified and of a certain value. Many such boats are fairly new even as young as two years old so the scope of the survey (and therefore the cost) can sometimes be reduced. In general, most buyers to prefer the valuation details to be separate from the survey as the documents are often used by different people for different purposes. This is the easiest way to protect confidentiality. The surveyor helps the buyer with his purchase and provides a safeguard to the bank against fraudulent applications and inadequate security. When a valuation for finance has been requested, the surveyor again automatically acquires an extended responsibility and this should be mentioned in the written report.
The Surveyor is the friend of the Buyer, the Seller, the Broker, Insurer and the Finance company.
The surveyor finds and describes conditions with the boat, not the buyer or the seller. The surveyor should not normally be involved in commercial aspects of the deal and never the politics. It is good to remember that above all he should be acting in the best technical interest of the boat.
The Surveyor is the friend of the Buyer, the Seller, the Broker, Insurer, the Finance company and the Boat.
Customs & Excise? Well during the course of surveying a 50ft GRP ketch with the purchaser present, I uncovered an extremely suspicious looking package. My subconscious told me that I might have seen something like it before in a movie but it was still a shock as my conscious brain told me this was a package of drugs and a large one at that. In fact it was a work of art. The package was a neat cube, completely covered in brown parcel tape with perfectly made handles also made with tape and contained about five kilos of cannabis resin.
What do I do? Cover it up again quickly? Move it? Try it? Sell it? (very silly). It was reassuring that the rational thing to do came in a nanosecond and I went off to phone the customs telling the purchaser to stand guard.
Never before have I seen such a quick reaction, there were the local officers, regional officers, local police, regional police, supervisors, supervisors for supervisors and of course the dog all over the place within minutes. Flashing lights were everywhere and enough sirens to qualify Hamble as a disaster area. The influx at last stopped when there was clearly no more room on the boat and the waterline had come interestingly closer to the deck edge. How did I help? Well after ensuring that I was not chief suspect, I was asked to advise and point out where other similar articles could be cached inside the boat. Fuel tanks, water tanks, yes holding tanks as well, voids, false compartments etc. etc. even inside the engine although it was running! These operations considerably extended the duration of the survey and when I asked where I should send the supplementary invoice it was the dog they chose as their spokesman. So, as unpaid assistant to Customs I suppose I was their friend but when one of them came over to me and said there was an officer stuck at his desk in Southampton on the verge of tears because after twenty five years service had not come up with a single ‘find’ and here was I, a rank amateur, with a major find after fifteen minutes involvement I knew it was not possible to befriend everyone.
Tim moved to Mallorca with his wife Sally in April 2007 to enjoy living and working in the Mediterranean climate and ambience. A full member of the Yacht Designers and Surveyors Association (YDSA) and the International Institute of Marine Surveying (IIMS) he originally qualified as a Shipwright with Appledore Shipbuilders in 1977. Now with thirty years experience in the marine industry and with tens of thousands of sea miles in yachts Tim is in an excellent position to provide professional advice on a wide range of marine topics. Tim has built up a carefully earned reputation for providing detailed surveys with clear and practical recommendations. He also has an excellent track record for providing solutions and for problem solving on major repairs and refits. Tim is an acknowledged specialist on the Recreational Craft Directive (RCD) and works throughout Europe and Scandinavia.
If I had a euro for every person who had contacted me to sort out transfer of ownership on a car they had bought when it was too late, I am not saying that it would pay for a cruise, but I could afford a good holiday in most parts of the Mediterranean!
The problem is an English or rather non-Spanish mind set when it comes to buying and taking ownership of a car. It can be a mine field, particularly when buying privately, although sometimes even through a dealer.
It can be tempting, a bargain car available for cash just before the owner leaves the Island, but the bargain can soon turn into a nightmare with no possibility of ever taking over legal ownership or having bought an expensive liability with a number of outstanding debts.
Firstly, for every transfer of ownership, however many times that has taken place in the car’s lifetime there is a transfer tax which must be paid to the government equivalent to 4% of the current value of the car (not what was paid for it, not what you think it is worth, but the value that Hacienda places on it).
Secondly, you must be sure that you are buying from the actual owner. Due to lack of knowledge sometimes cars change hands several times without any transfer of ownership taking place, so the chances of finding the real owner becomes remote and the legal transfer becomes impossible. This can be checked out by simply asking to see the car’s Permiso de Circulación.
Assuming you are dealing with the current legal owner you must have proof of their personal identity and signature to make the transfer. So you must have either their original or notarized copy of their passport or residencia and a signature on a contract of sale and the Trafico application form.
Thirdly you need to be assured that the car has a current ITV (equivalent to the MOT), that the local road tax is up to date and that there are no outstanding fines or finance on the vehicle.
Normally buying through a dealer is the safer option though I recently met someone who had bought a car on the mainland from an English dealer and 18 months later is still waiting for the transfer documents to be sent on.
There is no excuse for such a delay, because with the correct papers the transfer can be made in one to two days at the outside.
So, buyers beware - before any money passes hands!
2007 has probably been the most vibrant summer season ever experienced in The Balearics for yachting, this has given most local marine businesses a very busy trading year, and all watersports enthusiasts something to enjoy, no matter what their particular boating preference may be.
During the same period there has been a change of Government, and many people will be asking; “What is the future for yachting in the Balearics, and how can this success be continued and sustained in the coming years?
The Balearics Chamber of Commerce has a pivotal role to play in strategising and developing the boating/yachting market which is a major contributor to the local economy, and an important attraction for encouraging quality tourism.
Given this background, we thought it was a good time to interview the President of the Chamber, Snr.Juan Gual de Torrella - and we are most grateful to Snr.Gual for taking the time to share his thoughts with our readers.
Q) We understand that you are a keen yachtsman yourself, could you tell us briefly what your yachting experience is, and how it influences your responsibilities as President of Chamber of Commerce?
A) I do love sailing and I usually sail as often as I can. But this has nothing to do with the activity of the Chamber of Commerce. The nautical sector is interesting as a productive sector by itself. The fact that Baleares now has a touristic product that is mature, means that we have to look for specialisation opportunities. In this way, the nautical sector is a good chance to open both new touristic, nautical leisure and cruising in another dimension, plus developing industrial products, and specialisation in leisure marine services. We believe that Balearics has big opportunities in this area as a reparation centre in the Mediterranean, because we can offer good quality in a perfect environment. Of course, the fact that I like to sail and that I love the sea, helps me to understand all of this sector and its needs.
Q) In your speech to the European Marina Conference earlier this year, you mentioned that competitive countries such as Italy and France have had more success than Spain in the boat building, charter and leisure marine service sectors. You went on to say that the Chamber of Commerce is actively engaged in lobbying for tax reforms, and for improvement of the skills training in the local marine labour market. Can you comment on how these initiatives are progressing?
A) Considering that the environment in the Balearics is perfect for charter and sailing, it is true that the tax situation in Spain does not give an incentive to the nautical industry and creates a negative situation for the Spanish companies compared to the companies located in Italy or France. This does not mean that the Spanish companies aren´t as good and competitive as the rest of the companies, the tax situation makes the difference and creates a disadvantage for them. Fortunately, we have been informed that this situation is being reconsidered in a way that a new registration basis could be established. But for the moment, this is only a project. The Chamber of Commerce is still actively engaged in lobbying for those tax reforms to become true, and also for improving the skills of the local labour market in general, which will contribute to improving the competitiveness of the Balearics.
Q) At the same conference, the lack of moorings in The Balearics (particularly for yachts of +24 metres) was mentioned by many speakers, as a key factor in preventing more growth in the leisure marine sector, which is already acknowledged as a major contributor to the local economy. Given the environmental constraints, the shortage of land, and competition from other tourism and commercial sectors for improved infrastructure, do you see any realistic opportunities to improve this situation in the future?
A) We do agree that there is a lack of moorings for superyachts as a business. But it is also true that this growth depends on the environmental constraints and the shortage of land, as right now there is a balance between the number of boats that we receive and what we can absorb. The good news is that little by little, there are projects under way providing new moorings as in Port Adriano, or the plan to grow by 20% some of the ports that could handle this new situation. The enlargement of Palma´s port is a key factor in improving the activity of the leisure marine sector, which has a lack of space for maintenance, and this of course will contribute to the local economy.
Q) News has just been released of a new agreement between two of the most important locations for Superyachts; Palma de Mallorca and Antigua, which we understand you have been personally involved with, along with the managers of The Superyacht Cup. Can you please comment on how this came about, and what benefits you expect to come from such an agreement in the future?
A) The idea of linking Mallorca and Antigua in some way, came out at the Millennium Cup in June 2007. At the moment, only the outlines for a formal arrangement have been ‘agreed’. Considering that Mallorca and Antigua are the two most important locations for superyachts, we thought about promoting in parallel both countries so that we could amplify the popularity of both destinations with the yachting community. At the recent meeting at the Monaco Yacht Show, Mr Harold Lovell, The Minister for Tourism for Antigua, and myself agreed the outlines which aim to benefit the extremely important marine industries in both locations, as well as promoting trade and commerce across other sectors such as tourism. We have a common strength, and that is both countries are the most important centres for superyachts in the seasonal yachting areas, the Caribbean and the Mediterranean and we have to use this argument to compete in the world as yachting destinations.
Q) Lastly, you have promised to improve the promotion of The Balearics as a premier yachting location, at international boat shows and trade seminars.
We understand you have recently returned from the Monaco Yacht Show, can you comment on how that went, and how you think this kind of promotion may translate into future benefits for yachting in The Balearics?
A) The Chamber of Commerce is present in several nautical shows –such as Monaco, which contribute to improve and make more effective our promotion. Right now a group of Chamber representatives have travelled to explore the Genova show and its possibilities for Balearic companies. We believe that we do a good job in the islands but we have to communicate this to the world. The last Monaco show was very positive for our companies, because they saw that they can compete with the best companies in the world, they made lots of commercial contacts and even signed contracts up to 2014! Every year we also organise some journalist meetings in the Balearics to let them know that the islands are a perfect destination for sailing. Not only because of our weather, but also because of the quality of our sea, our infrastructures and services. This is something our potential customers have to know through the press or through the shows, and the Chamber of Commerce works continuously to get that message across.