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Why you should never buy a second hand yacht in Greece

Lessons from buying a second hand boat in Greece

Stamatis Konstantos This is the broker from Yacht Broker House Corfu who sold me the boat to me. I believe he now works for another broker in Greece.

Angelo Flessas Broker from Yacht Broker House Corfu

George Karamalis

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This website is a warning to anyone thinking of buying a second hand boat in Greece.

It is all about what went horribly wrong when I bought a second hand wooden gulet in 2022. A gulet refers to a type of traditional wooden boat made in Turkey which has been converted into a charter boat. It is done by turning what was the hold into cabins and extending the stern to give more deck space for lounging and dining. It all started over 40 years ago when foreign tourists started visiting the Turquoise Coast around 40 years ago and staying old ports like Bodrum and Marmaris. Building these boats was once a cottage industry and even today a few are still built by villagers often in their backyards. These kind of shipwrights don't bother with blueprints or naval architects.

This particular boat with the charming name of Dream of Freedom was built in 1989. It has eight cabins, all ensuite, and a spacious and roomy wheelhouse with its own bar. There are enough bunks to sleep up to 20 people including 4 crew.

These gulets are intended for leisurely coastal cruising. They don't go very fast and usually they don't both putting the sails up.

The difference with a normal yacht charter is that the crew is also there to cook and serve food at a nice dining table or pour drinks from a bar. There are plenty of cushions to laze about on and plenty of space to sunbathe. Unlike a sailing boat, where the passengers can easily get sea sick, these boats are heavy and solid.

I had already been to Turkey to see what was on sale there and to look at how the boats were built. Although this one was rather old, the ones that I had seen for sale in Turkey often seemed to have been made with a lot of plywood and epoxy or they had not been built to any professional design. This particular boat, which I had found for sale in Turkey, claimed to have been built with oak and it had been registered under a British flag as a commercial vessel. True, it was older, but maybe it was more durable. It had been used in Spain as a charter vessel.

As you got a lot of boat for the money I thought it was worth looking at. Before going there, I commissioned an initial walk through survey from a Greek surveyor to see if the boat had potential. My previous experience with surveyors was very good. In Turkey, a local boat surveyor, Ali Dincer, had very quickly assessed some boats on offer. After just an hour, he advised me against wasting any more time on it. Although the gulet in question looked rather splendid to my eyes, he swiftly spotted the poor quality of the carpentry. So I assumed, foolishly as it turned out, that the same thing would happen in Greece. Afterall, I reasoned the Greeks had been building wooden boats for millennia. The Greeks used to make similar boats, called Caiki (Caique), but no longer. The craft has largely died out and in fact a few years ago, the EU had ordered the Greeks to destroy 10,000 wooden fishing boats in bid to rebuild fish stocks.

Browsing the web, I came across a well established Greek surveyor based near the popular marina in Alimos outside Athens called Karamalis and Associates. Their website - https://www.karamalis-surveyors.gr/ - claims to be a father and son operation that has been ‘providing technical expertise since 1984’.

The website says it is ‘a locally and internationally recognized independent company based in Athens, Greece, specializing in the field of yachts’ surveying and consultation.' The website also said that - 'Since its inception in 1984, Karamalis & Associates has earned the respect of the Greek and international yachting industry for its reliability, integrity and quality of service. Our mission is to provide our clients with independent, confidential and unbiased expert services, which always meet the industry standards.’

'We have an experience in yacht surveying and consultation on all types of yachts!'

So I asked them to do an initial walk through survey. We agreed a price for this. A surveyor, Georgio Karamalis, took the ferry from Piraeus to Porto Cheli where the boat was. I expected him to look at two critical issues – was the hull sound and did the engine work?

In the autumn of 2022, he sent me his report with photos and a video and declared that the hull was in a 'satisfactory condition'. ‘The hull was checked internally in some places and no ‘rots were noted on the wood.’ ‘As a general comment the yacht was found in average condition for her age with normal wear (built in 1989). He stated that 'some oil and water was noted at the engine room bilges’ but did not seem to be alarmed by this. Indeed, this is quite common in boats.

On the strength of that report I flew over the Greece and took the long ferry ride to Porto Cheli. There I met the broker and the owner. The engine seemed to start OK. The boat clearly needed some investment to fix up the interior. The wood around the wheelhouse and windows and the deck needed repairs but the engine and hull seemed OK. Part of the deck was laminated to cover up some rot. I could see some planks needed repairing and others had been crudely patched up. The owner, who was Dutch, had bought it at an auction in Spain and had spent money fixing up the engine and wiring and adding new navigational equipment and so on. He said he had sailed it over from Spain and lived in it during the lockdowns. So it seemed to be working boat. I thought I could get it fixed up in Turkey pretty easily.

So I decided to put down a deposit and commission a more detailed pre-purchase survey. This was in November 14, 2022, and the fee was for 1,400 euros plus VAT.

This offer included looking at:

Internal structure (bilges, girders, stiffeners, bulkheads) • Interior furniture, walls, ceiling, floors, etc

Underwater inspection
Hull inspection and hammer testing
Shaft, propeller, bracket and cutlass bearing
Rudder and steering gear
Keel
Anodic protection
Through hull fittings

Underwater inspection can either consist of sending a diver to look at the hull and take pictures. Or to lift the boat out and inspect it – costly and expensive operation. None of these things were even discussed.

The double failure to investigate the hull properly and to highlight the risks of buying an old wooden boat without inspecting the hull properly turned this purchase into a possibly life threating disaster. The hull was so rotten that it could easily have sunk at sea.

It was so bad that when I did get it to a boatyard, it could not be lifted out of water for fear of it collapsing midships.

Karamalis made the following points with regard to the hull and engine:

In the section devoted to the state of the hull, he said:

Hull Topsides: * The starboard hull topside was found with some rotten wooden planks. Also some old repairs were noted.

* The port hull topside amidships was found with some fractured wooden parts.

* The seam caulking between the wooden planks at the starboard hull topside near the bow was found deteriorated and gaps were visible, to be recaulked.

Transom: The transom was found in satisfactory condition. The edge of the transom at the starboard side was found with a repair

These remarks seemed to me to refer to the visible repairs to the planking well above the water line where you could see lots of different coloured planks. The remark about 'fractured wooden parts' in the port hull topsides didn't seem too alarming. As long as it didn't stop me taking the boat to a boatyard, it didn't sound dangerous. I was reassured by the next section:

'Internal Structure: Stiffeners, bulkheads and other hull structural parts were inspected where access was available and no cracks, fractures or delamination were noted on the internal structural parts. One through-hull was found disconnected and laminated.'
A wooden frame aft of the engine at the port side was found fractured, to be fixed
The yacht’s structural components supporting the engines and the engine mounts were inspected and were found in satisfactory condition.
In addition, he noted that:
The stuffing box was found rusted and its leaking rate was found to be more than normal, to be dismantled and serviced as found necessary.
The engine room bilges were found with water and oil, to be cleaned and the leaks to be traced and dealt as found necessary

The surveyor said that the 'Stiffeners, bulkheads and other hull structural parts were inspected where access was available and no cracks, fractures or delamination were noted on the internal structural parts.' So he seemed to be confirming again that the hull was structurally sound.

The 15-page report did not give any indication that the boat required expensive repairs or that before buying it I should have the boat lifted out and inspected. The surveyor did not think it was necessary to take the dingy out and go round the boat and test how many of the planks were rotten. It did not say what kind of rot was found. However, he had taken the boat out for a sea trial and said the engine was working fine.

Yet after I took possession of the gulet in early March 2023, it proved impossible to get the boat working and to leave the marina where it had been kept. A Turkish yard in Marmaris had been booked and a professional Greek captain, Giannos hired to take it there. In March 2023, he went to Porto Cheli three times together with a first mate. Each time, the captain, had to admit defeat. The boat was simply not in a good enough condition to undertake a journey that long. 'You need to spend at least 100,000 Euros to get the boat ready,' he warned me.

Water was seeping into the engine room and had damaged the engine. The batteries and generator needed attention. He bought a new bilge pump and hired a mechanic to fix the engine. Yet, it was not enough.

The maintenance team at the marina suggested that a local carpenter, a local mechanic and a local electrician could work on the boat while it was in the water and get it ready. We had to arrange a tow to the public dock as the Marina no longer had a berth for the boat.

Curiously, the leaks stopped after the boat moved. Later we even moved it top the middle of the bay because the sanding work was annoying the other boat owners.

Although there are two Greek shipyards very close to Porto Cheli, one of which definitely had the expertise to fix wooden boats, they were both solidly booked up for at least a year ahead.

Nearly all other Greek boatyards don’t want to take on wooden boats. They either don’t have the expertise, and they avoid wooden boats which can take too long to fix. That meant looking at boatyards that were far away – Piraeus, Rhodes, or Preveza – so far away that you might as well sail to Turkey where things were generally much cheaper.

For the best part of two months, I stayed on board trying to clean and prepare the boat while various contractors worked on it. At the end of the period, the local mechanic, Dimitris Chalkitis, who charged me hefty sums to fix the engine, swore that engine and generator were good condition and that the snuffing box was fixed. He also claimed to have installed new bilge pumps.

The engine was working again and in early June we left the dockside and moored the boat in the bay. A lot of new sanding, varnishing and painting had been finished. The wiring was completely redone.

On a beautiful Sunday morning, we fired up the engine and headed out for a brief trip to test it out. After an hour smoke started pouring out and the engine seized up. We decided to warn the coastguard as the boat was in a busy shipping lane and hard to control with just one sail up.

In Greece it is a big mistake to call the coastguard. They immediately assumed it was a mayday distress signal, rather than a notification, and acted as if the boat was sinking and required a salvage vessel. It took the various local coastguards a while to decide which of them was responsible. They had difficulty understanding the location even though we repeated the coordinates several times.

Eventually the high speed boat of the coastguards arrived. Their chief concern was the insurance papers and the flag registration. The flag registration transfer should have been completed on the Friday but we didn’t get the papers until Monday. Eventually they let that go for the moment and found a fishing boat which towed us back the 2 miles to Porto Cheli. Later I was fined for taking the boat out without notifying the port police and for the flag document business. To this day I still can’t understand why on Sunday morning you have to get the permission of the port police in Greece to take your boat out a mile or two.

We then had various mechanics come and look at the engine and a diver inspect the hull again. It was clear that somehow water had got into the engine. The oil was milky and cloudy. So the engine had to be replaced which meant opening up the roof of the wheelhouse and craning the old engine out and installing a new engine. I spent a fruitless few months trying to find a company to do this. At high season everyone was far too busy. I called Volvo Penta offices in Greece but they weren’t interested. I drove around the region asking every possible mechanic to fix the engine but to no avail. I tried setting up a crew to sail the boat to Turkey but the port police vetoed this. I asked for help on Facebook pages devoted to Volvo Penta engines to see if anyone could fix the engine while it was still in the boat. None of those who responded actually turned up. Then in late October the port police called me and said the boat was sinking. Water had been coming into the boat. I made an emergency call to a local captain who managed a boat next to mine. Thankfully he came and pumped the water out. This time the engine had been really badly flooded and there was no chance of repairing it. Then the generator broke down and no one could repair it. I had to hire an emergency portable generator to keep pumping the water out.

Finally, my Greek lawyer made a phone call to the head of a large Greek company. A tug boat was available and space at a boatyard opened up. It cost a hefty fee to tow the boat 12 hours all the way to the Promarine shipyard at Eleuthis. When we arrived they were ready to lift the boat out. However, the staff there quickly realised that this was impossible. They said they could see that there were too many rotten structural timbers in the middle of the boat. The boat would sag in the middle and collapse.

They kindly arranged another tug to take the boat to a very small boatyard on Salamina Island, about an hour away. There they would haul the boat out instead of lifting it. By this time we were in December. We tried again to stop water come into the engine room by sending a diver down to plug the holes. This didn’t work again.

It took some months before the boat was lifted out and the extent of the hull damage could be investigated. A lot of the hull planking was rotten and the ribs on either side midships were rotten. The damage had clearly been disguised with paint. When I showed the mages to surveyors familiar with wooden gulets, they said were certain the wood rot had started many years before November 2022. A competent surveyor would have spotted this and warned me about it. The damage was so severe that the boat was not seaworthy when it was inspected. It was in too poor a condition to sail it to Turkey. The shipyard owner put the cost of the hull repairs alone at over 100,000 Euros. And he thought that more rot would be discovered once the carpenters started work. By the end the costs could easily reach 200,000 euros.

It is hard to summarize the amount of time and effort lost and the accumulated financial losses that has stemmed from professional failure by the Greek surveyor. By this time, I had to pay for the boat to be towed 5 times and each time this involved a lot of time consuming paper work. The generator had broken down. The dingy outboard had packed up and so on. One should also take into account the loss of income from being unable to use the boat for charter. The owner of a similar wooden Gulet earned 81,000 Euros in the 2024 season.

What also became clear - and that is why I am going public with this - is that no one involved carries professional liability indemnity insurance. This is normal in Britain and indeed in most countries. In fact for regulated professions, such as lawyers, architects, engineers, and accountants, it is mandatory.

In the marine surveying industry, PII is not always legally required across the EU. However, many clients and industry bodies require marine surveyors to carry PII as a condition of conducting business.

What this means that if you buy a ‘lemon’ like I did and if you believe the surveyor may be at fault, it is hard to make a claim for professional negligence. It is much easier to lodge a claim against a surveyor when there is a third party that can investigate a claim and make a pay out. An insurance company has access to professional expertise.

The alternative is to go through the Greek courts where the judge will have no knowledge of the industry. So the judge will rely on expert testimony from other Greek surveyors. But they in turn are going to be reluctant to testify against other Greek surveyors because that would be a breach of their code of conduct to disparage other surveyors.

Karamalis Associates are not members of the IIMS – the International Institute of Marine Surveying. This a body set up in 1990 to establish high standards in the industry. In fact, very few Greek marine surveyors are members. The Institute’s Code of Conduct recommends that all members have PII insurance before they start surveying and in the case of UK small craft surveyors it is a mandatory requirement.

The IIMS organises special schemes for its small craft members through specialist insurers. The annual fees for professional indemnity insurance are modest. At the most several thousand euros - not a lot for people who are often surveying boats worth millions.

The IIMS code of conduct also asks members to not criticise a fellow Surveyor or colleague to third parties.

In fact the Karamalis website does not list membership of any professional bodies although Georgio Karamalis says he is a member of the Technical Chamber of Greece which awards professional licenses to technical engineers.

What applies to Greek surveyors also applies to Greek Yacht brokers including the Greek brokerage company which marketed the Dream of Freedom - Yacht Broker House Corfu - www.ybh.gr . They employed Stamatis Konstantos and Angelo Flessis of Yacht Broker House in Corfu to deal with this sale. In 2023, I visited their tiny offices in Corfu. It didn’t look like they had any assets to sell if they were going to be sued for professional negligence.

This brokerage is also not a member of any international body like the ABYA which requires its members to have professional indemnity insurance. Nor does the YBH website say that the it is a member of the Yacht Designers & Surveyors Association (YDSA). Nor the European Yacht Broker’s Association.

The firm is however a member of the Greek (Hellenic) Association of Yacht brokers - http://hyba.gr/index.php/about-us/board-members - but this does not oblige its members to take out insurance.

So if you are buying a boat in Greece, it is best to avoid a Greek yacht broker unless he has PII and is a member of an international body of yacht brokers.

The Greeks are not adhering to the highest international standards and they should pay the price. How did this show in the behaviour of YBH ? I think they saw me coming - a novice sucker who could be duped into buying a lemon.

A lot of claims were made in the sales prospectus of this boat turned out to be false. For instance, it said the boat is 30m long. In fact it is registered as 21.5m and this was confirmed when it was measured by a Greek naval architect who issued a formal document of measurement.

It said the boat is made out of double oak rib - that it has a bow thruster - a teak cockpit and a teak deck – a fully battened mainsail. These things were also not true. There is no bow thruster and most of the deck is not teak but largely laminated. There was also no working main sail only a Genoa.

Further, when I was completing the sale, the broker, Stamatis Konstantos, who took me there to see the boat and meet the owner, proceeded to give me a wrong advice. Critically, he advised me to transfer the money to purchase directly to the seller as I was paying on the last possible day specified in the memorandum of understanding. He claimed the Greek lawyer with whom I was working was a crook. However, this meant the lawyer did not get a chance to ensure the right documents were checked and handed over. Stamatis said that this certain Greek lawyer would charge me a large sum and was not very honest.

This meant that I did not get a properly notarised bill of sale. Without this, it is very hard registered the boat under the Greek flag. Nor did I get a document showing that the EU Import Tax and VAT had been paid on a boat that was originally made in Turkey. It is surely the case that the taxes had been paid since the boat had been used for charter in Spain for many years. But the paperwork had been lost along the way.

To register it now involves paying a 24 percent tax on the lowest nominal value of the boat which will amount to 30,000 Euros. However, the sales prospectus clearly states that VAT had been paid. As Stamatis is an experienced broker, he would have been aware of this all along but chose not to warn me. All this would later cause a great deal of trouble down the line.

Nor was it ever made clear by anyone involved of the difficulty of registering the boat under a Greek flag - and so enjoying the tax incentives offered by the Greek state for the chartering industry. The first step is to create a Greek company – a quite time consuming process – which requires opening a Greek bank account. A problem if you are not a resident and an EU member state citizen. However, even after I set up a Greek company complete with a bank account it was impossible to register the boat under as a private vessel. The previous owner had registered it under the German flag and after selling it had deregistered it. As I was not a Greek resident, I could not register under my name. It could only be registered under a Greek flag once it had been licensed by the Greek authorities for commercial use. To do this requires lifting the boat out so the hull could be inspected....

In the meantime, I had to spend extra money to register the boat under the Polish flag. And while that was going on the boat had no flag registration so the Port Police, who are very fierce in Greece, fined me. And with a Polish flag you are liable to pay a monthly tourist tax, not easy to do in itself. And of course, without a Greek flag it turned out to be impossible to get insurance from anyone in Greece. This was the cause of further problems.

In the meantime, I had this dormant Greek company and was supposed report its VAT turnover every month. The Greek accountants that I worked with demanded 150 euros a month to perform this action – which would take about five minutes. So I ended up hiring someone else for 20 euros an hour.

So my impression from all this was that the advice given even by professionals in Greece is often very poor and the fees rather high by most standards.

So if you are trying similar in Greece please check and double check everything. Although Greeks individually speak good English and can be very helpful, the general business climate for this industry and others is over complicated and bureaucratic. Greek shipping insurance is similarly very problematic. It can be very difficult and time consuming getting anything done in Greece even if you are a resident. It is a very poor place to do business. When it comes to the yacht business, the Port Police can be very difficult and unhelpful if they choose to be. Their paperwork is not on line and it is all very cumbersome and time consuming. They also seem to be possess far more powers than their counterparts elsewhere. In short, stay away from Greece.