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My 98 181 has Z-lock jack plate on it now. The guy I bought it from mentioned the bolts breaking or something and that's why he changed it out.
Was this a common problem and should I be concerned about transom damage?
It looks like they did a good job on the install, sealed up properly etc.
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It seems to be a common problem with Rite Hite plates. I wouldn't be concerned with your transom as long as it seems solid and appears to be sealed properly. Check from inside the boat to make sure the bolts look clean and are not pulling through or showing signs of the brown ooze of death.