With all respect to Miz Trom and I am no way disparaging their purchase and repair, but this story begs for a discussion of how to buy a boat (from a potentially unscrupulous builder). This is what we did in buying billions of dollars of construction equipment for multi, multi million dollar projects. Some of it can be skipped if you have confidence in the builder, like the partial title/lien provision.
First you need to have clear set of specs when you sign a contract. It doesn't need to be silly, but it should list all equipment whether or not standard. Since this builder has a fluid idea of standard you cannot rely on it as the basis.
If the bulder wants progress payments, then the contract should have an initial payment and progress payment linked to clear, observable progress, not time. These might be laying up the hull mold and turning it over, installing the engine, covering the hull with the topsides layup, etc.
Then if you have any concerns about the financial condition (or integrity) of the builder then write in the contract that payment of each progress payment gives you partial title to what is installed. That way if for some reason he doesn't finish you can take possession of what you have paid for, move it to another shop and finish it. Admittedly if the builder renegs before the hull is closed you are in a world of screwed.
Another less draconian way is to secure a lien on what you have paid for so that if he subsequently declares bankruptcy you have a lien on your property and no other creditor can liquidate it to pay his bills.
This later provisions may sound unwieldy but it was routine in all big orders we made with progress payments. Admittedly making it work after a bankruptcy will be tough, but better to have it than just be one of hundreds of creditors waiting in line.
If he won't agree to these sound and proven solutions, then run don't walk away.
I have purchased four brand new boats in my life and I never had to make a progress payment. One builder did go into bankruptcy- Saga Yachts, some years after I purchased mine, but other than maybe a 10% initial payment I never paid another dime until the boat was delivered to the dealer's yard in Annapolis from the factory in Canada. And according to the contract, final payment made it mine.
Anytime a builder wants progress payments is a big, big red flag and it warrants the stringent measures described above. And by all means consult with an attorney before committing to spend hundreds of thousands of dollars.
David
