Wednesday, January 30, 2013

Surveyor Guide Notes for Prepurchase Condition Survey

Pre-Purchase can be carried out (e.g. for owners, banks, etc for mortgage purposes; for underwriters pre-entry surveys, etc.)

The vessel is to be surveyed from an operator’s point of view. It is not enough for the vessel to be satisfactory from a class point of view. The surveyor should also comment on all non-class items such as coatings, condition of steel under coatings, accommodations and their condition and outfit, standards, of maintenance, etc.

1.  The Surveyor’s report should clearly describe items inspected as being in “good”, “fair”, “poor” or “unsatisfactory” condition and, specifically mention those in need of immediate attention/repair. The following definitions are to be included in the formal report.

Good                     Unimpaired condition without significant wear or deviation from original strength and operating efficiency. No maintenance or repair required.
Fair                       Condition with wear and tear and other deficiencies of minor nature not requiring correction or repair.
Poor                      Condition in which the adequacy of strength or operational efficiency is marginally below acceptable limits or is in doubt. Remedial action is required.
Unsatisfactory       Condition of undoubtedly inadequate strength or operational efficiency. Immediate extensive repair or renewal required to reinstate serviceability.

If any conditions are considered poor or unsatisfactory, our report should be specific as to the reasons for same.

2.  It is just as important to report upon items/areas not inspected as upon those that are inspected.
Such as:
“Cargo hold (tank) Nº __________ was not available for internal examination due to cargo in way (tank fully/partially loaded).”
Freshly coated areas may hide deficiencies and should be closely examined and noted in the report as "freshly painted".

3.  Every survey report should contain an appropriate preamble similar to the following:
“It is to be clearly understood that the conditions and/or states of items reported upon herein below are strictly the opinions of the undersigned and that those opinions fairly reflect the findings made during the course of this survey. All statements of condition are made in comparison with new condition.”

4.  The Survey report should have an appropriate summary and conclusion similar to the following:
“Based on findings of limited physical inspection, without exposing areas normally concealed, testing or opening out the machinery, gauging the structure, or testing for tightness, it is the opinion of the undersigned that subject vessel was generally in (good, fair, poor, or unsatisfactory) condition on (insert day/month/year), subject to exceptions which may be set forth herein above.”

5.  If a Pre-Purchase Condition Survey is being carried out (vessel is not ABS Classed), it is important to note that the memorandum of agreement of the ship sale will specify that the prospective purchaser must make his declaration of intention within a certain time frame (such as 48 or 72 hours) after completion of survey inspection. Therefore, immediately after completion of the survey a short preliminary report (hand written if necessary) must be faxed to the client informing them of significant conditions found (good and bad) and that our formal survey report will be air expressed ASAP (normally this should be within three (3) days).

6.  It is also most important that a representative set of photographs suitably labeled, be taken which will give a general overall impression of the vessels condition, plus any damage or unsatisfactory areas.

7.  In order for our services to be of any value to our client, our information must be forwarded as soon as possible to our client as instructed. It is an aid in their decision on making process, and places them in a competitive position. The importance of this promptness to our clients is stressed as a reminder to avoid complacency and to maintain our competitive position in meeting the requirements of our clients.

8.  In conclusion, we would add the following instructions to Surveyors, the intent of which should be clearly understood before writing up the report;
a)  Condition Surveys must contain statements of fact as to the actual condition of the vessel. No unsubstantiated opinions and no recommendations as to method of repair are to be included in the report.
b)  There must be no comments which are vague or ambiguous.
c)  All statement contained in the survey report can be supported and defended in a court of law.