Boat Sharing Agreement

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Neil McDonald

Neil McDonald

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Aug 19, 2004
239
Hunter 35 Vancouver, BC
I have owned my Hunter 35 for several years and am planning to share use and expenses (but not ownership) with an experienced sailing friend. We need to document the basics of our sharing agreement in order to reduce the chances of misunderstandings. A simple agreement, not a complex legal document, would be sufficient.

Can anyone provide a template for this document? The internet has quite a lot of discussion but little in the way of a hard information.
 
J

John R

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Oct 9, 2012
110
Catalina 36 Emeryville
Boat US will consider your boat to be a charter boat and sharply raise your rates if you take money for somebody to use the boat who isn't a part owner. They consider the boat to be a charter boat in that case. The alternative is to sell a fraction of the boat. Then you retain control but it's not a charter. Send me a private message with your e mail address and I'll be happy to send you the contract I've used.

I should add that this has worked out very well for me and my wife.
 
J

John R

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Oct 9, 2012
110
Catalina 36 Emeryville
I'd like to add one other point about these partnerships: I agree that a contract that spells things out as clearly as possible is important. But there's no contract that can spell out every possible situation. And we sail to, among other things, reduce the stress in our lives. The contract helps in that it makes things clear up front. But in the end, in my experience, the main thing is that everybody approaches the arrangement with good will, wanting to make things good for the other person. I had one person who wanted to partner with me on my boat. He had all the background, but there was something about him that made me just not feel right. So I told him "no" (in as polite a way as I could). To me just trying to get along with the other people, and having partners that you feel good about who you think will try to do the same, is the most important thing. Without that, it's going to add to the stress, no matter what.
 
CalebD

CalebD

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Jun 27, 2006
1,479
Tartan 27' 1967 Nyack, NY
I think it is a very good idea to try and map out when/how each person will contribute to "the boat".
Your insurer will not care if it is only your name on the registration, or your name and someone else unrelated to you. This is how my/our boat is registered and we are not considered a charter vessel.
I share a boat with a friend I have known since college. We have no written agreement but have fallen into what seems to be a fair arrangement.
We split all recurring costs of owning the boat (winter, summer, insurance, registration fees). Beyond this things can become a bit fuzzy.
If you have other people do all the chores for your boat then you can just split the expenses of that. We do all our own work so this is where things don't always end up 100% equal. I do the bottom paint each year as my partner prefers to do the somewhat cleaner electrical, rigging and engine work. Anything to do with epoxy/fiberglass then I am your guy. I do all the stuff related to "boat snot" of any kind and my boat partner helps with tasks he is better prepared to do.
We each bring different (but overlapping) skill sets to the table which ultimately is a good thing.
You should also give some thought as to how big one-time expenses are handled. Who pays for that new suit of sails, new standing rigging, chart plotter, engine rebuild or replacement? This should be clearly spelled out from the get go.
 
Neil McDonald

Neil McDonald

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Aug 19, 2004
239
Hunter 35 Vancouver, BC
I totally agree with your point John. Perhaps it would be more appropriate to call such a document an agreement instead of a contract. The word contract implies that it could be legally enforced whereas an agreement is all about smoothing the way towards a comfortable working relationship. My prospective partner and I are both engineers and deal with contract disputes frequently. I was once told that the more detail that a contract contains the more loopholes are created.

I sent you my email address in a private message and look forward to seeing your document.
 
W

Winkfish

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Jul 28, 2010
914
Boston Whaler Montauk New Orleans
Legally, there's no difference between an "agreement" and a "contract." But, as usual, the devil is in the details. The more details, the more devils.

As John R said, you really need to feel comfortable with the other person.

And have a way that either of you can opt out in case things go south.
 
Dean_Wilson

Dean_Wilson

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Jun 22, 2010
17
Bombardier 4.8, Alberg 22 (1/3) 0 Saint John
As I mentioned to John R via email, I am in partnership with my brother and a co-worker on a 22ft project sailboat. Any disputes between my brother & I will be settled by a severe judge: our mother :)

dean
 
Neil McDonald

Neil McDonald

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Aug 19, 2004
239
Hunter 35 Vancouver, BC
I talked to my broker and he said that any sort of documented cost sharing agreement creates a commercial charter in the insurance company's view. However if my partner buys even a nominal share of the boat he could be named on the policy at little or no extra cost. Since we both want at least simple documented agreement, it looks like we will go the co-ownership route.
 
woodster

woodster

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Sep 15, 2009
6,243
S2 9.2a Fairhope Al
why not incorprate the boat and just have 2 share holders ...just a thought from my knee jerk reaction to reading this thread....

regards

woody
 
C

Crazy Dave Condon

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Jun 8, 2004
10,376
-na -NA Anywhere USA
Having been a dealer for many years and now retired, the advice given regarding insurance when there is a contract of any kind, most insurance carriers will clasify the boat differently and thus you will experience higher rates. If you do not declare that, coverage afforded under single ownership can and will be denied. I have seen that happen.

As for multiple ownership or usage, I have always seen that fail due to many reasons to include who does maintenance, sharing cost of repairs and docks and so forth. Once I sold a boat to four fellows and that lasted less than two years besides being thrown out of two marinas as well plus having to deal with four owners on one boat drove me nuts. I never did that stunt again selling to multiple ownership.

If you really have a friend, invite to go out with you from time to time but if you get involved with the sharing agreementl, you will eventually loose a friend. Is it worth that my friend.

Crazy dave condon
 
Cool Beans

Cool Beans

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Mar 8, 2011
296
Ranger 33 Norfolk
My boss shares a boat with a partner. . .it seems to work out for them both. They share regular expenses (slip, insurance, maintenance, etc.) but new/extra toys are paid for by the partner who wants it. They don't day sail. . .typically, one will sail the boat to the destination (Bahamas, Caribbean, Keys, Central America, etc.) and tool around for however long, and then slip the boat down there and fly back. The other partner will then fly down when ready and tool around for a bit, then sail the boat back.

Just saying, it could work out if you find the right person.

Personally, I would leave any "partnership" too:

"Hey Steve, when are we going sailing?"
"I dunno, probably after you help me with [maintenance item here] ;) "

Or maybe start there and see if giving them a financial interest works out?
 
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