Testing the Market

[John]

I thought some here might be interested in my (ongoing) experience in looking for a boat partner. Although I think what I'm asking for is pretty reasonable (way less than what the local sailing clubs charge), I've been having some difficulty finding a partner. Several people contacted me, several actually came and looked at the boat, and they all liked the boat - or my description of it - but they all got cold feet. A couple of them specifically said it was because of the costs.

Although this is different from trying to sell a boat, I think there are some things in common also. I guess it's still a buyers' market out there.

 

[Peggie Hall HeadMistress]

It would be helpful if you describe your terms

Are you offering an X% interest in the boat, plus insurance and dockage, for a fixed amount? Or X% interest in the boat for a fixed amount and split additional expenses plus maintenance & repairs? Or....???

What are you offering? What are you asking?

 

[sailingdog]

Also, do you have a USCG captain's ticket? If not, what you may be doing may be illegal. IF you're selling an interest in the boat, and they would be on the title to the boat as a co-owner, then this probably doesn't require a USCG ticket, but if not, it may be considered chartering and would require one. You'd need to talk to a maritime lawyer to be sure.

 

[John]

No, they would not be on the insurance as part owners, but they would accrue a small equity in the boat yearly. Basically, I'm renting out the boat for one week a month. They would be listed as an "operator" with the insurance.

 

[sailingdog]

John—

By renting the boat out, you may need to have a commercial insurance package, since you're basically chartering the boat one week a month. You'd also need to have a USCG license, an OUPV at a minimum, since you're chartering the boat.

 

[HukilauMike]

John—

By renting the boat out, you may need to have a commercial insurance package, since you're basically chartering the boat one week a month. You'd also need to have a USCG license, an OUPV at a minimum, since you're chartering the boat.

Dog:

do mean to say that only USCG licensed captains can charter boats they own? Or put differently, owners of boats who want to charter their boats must have a licensed captain somehow involved? I agree that you need to have a licensed skipper if you are chartering the boat with crew included, but I don't see why you would need to be licensed just to rent out your boat "bare" for a week.

 

[sailingdog]

To charter your boat out for hire, it is my understanding that you need to have a USCG licensed captain. IIRC, to use a boat for any commercial purpose, whatsoever, requires you to have a USCG licensed captain.

Also, chartering your boat—the rental of it for one week a month—will most likely REQUIRE you to have a commercial insurance policy.

 

[John]

All I know is that lots of people here in the Bay Area have non-equity partnerships and I doubt most of them have captain's licenses or anything else of the sort. I can see it if I took some people out on my boat and charged them and I was the one responsible, but this is just letting somebody else use the boat in exchange for which they pay some of the expenses of owning the boat. In addition, they do become part owners, although with just a small amount of equity. As far as the insurance requirements - I already talked with them and they say all I need to do is have them listed with the insurance as an "operator".

 

[higgs]

What are you doing to ensure that any takers are capable of operating your boat?

 

[sailingdog]

John—

What other people are doing, and what is legal aren't always the same thing. My understanding is that if you're using the boat for a commercial purpose, which means that you're getting compensation for use of the boat regardless of what the use or compensation is, you are required to have a USCG ticket. IANAL... so you really should check with a maritime lawyer.

My understanding is if they are are co-owners of the boat, the situation is different than if they are "renting" the boat a week a month, and have no ownership stake in the boat.

 

[Peggie Hall HeadMistress]

He's asked his insurance company what's required...they told him. It's unlikely that any insurance company would insure any illegal operation of boat.

 

[Jim Kolstoe]

Aside from possible licensing requirements, about which I can only suggest you call the USCG, assuming you're in waters they have jurisdiction over, you need to consider issues and problems of sharing use, expenses and decisions about a boat that has been your sole province. There was a very good article on boat partnerships in Cruising World several years ago. If you can locate it, you'll find it very informative. Some of the points I remember are that you need to work out the details of scheduling, decision making, financial contributions, dealing with problems, repairs and casualties including how resulting down time affects each partner's time, and finally, how to end and wind up the partnership. Deciding all of these things ahead of time when everyone's in a good mood beats out fighting about them. And most importantly, boat partnerships, like marriages, require a lot of work to keep them on an even keel.
Good luck.
Jim Kolstoe, h23 Kara's Boo

 

[Chuck Creel]

renting out/ insurance

All I know is that lots of people here in the Bay Area have non-equity partnerships and I doubt most of them have captain's licenses or anything else of the sort. I can see it if I took some people out on my boat and charged them and I was the one responsible, but this is just letting somebody else use the boat in exchange for which they pay some of the expenses of owning the boat. In addition, they do become part owners, although with just a small amount of equity. As far as the insurance requirements - I already talked with them and they say all I need to do is have them listed with the insurance as an "operator".

Sounds tome yourasking for trouble. Regarding insurance, this will depend on how you ask the agent. If i want to loan you my boat, i just have to add you as operator. If i charge you fees for using the boat then i become a chater company and in case of an accident , your insurance can become null and void.
In reference to USCG requirements, it is my understanding that ANYONE operating a commercial vessel greater than 26 ft LOAmust have a USCG lic.
OUPV at minimum maybe masters ticket.
tell your insurance company that you are renting the boat for a week n watch your premiums skyrocket.
Trust me, this is a very fine line and thin ice.

Captain Charles Creel
Professional mariner " 14 yrs "
200 ton masters/ master of towing vessels.

btw i also have a 30 ft sailboat and would be very carefull who i let use it unsupervised.

 

[CaptChuck]

I just wanted to add my two cents to the USCG requirements question. I have been under the impression that anyone who operates any vessel and is compensated is required to have a USCG lic. In this case it who appear that John is the owner or co-owner of the vessel but is not receiving compensation when he is in command of the vessel. The other co-owner is in the same position. The insurance copany will certainly consider it a commercial but I think the question of a required lic. revolves around the compensation issue of the operator of the vessel. If I have another individual operate my vessel & they receive compensation from me or anyone, else he/she would be required to hold an appropiate USCG lic. In any case I agree with Captain Creel, I think the problems, risks and costs of John's proposal out weigh the advantages. I am also very careful about letting anyone operate my sailboat.

Captain Chuck Dickhut
USCG Master
S/V Obsession
Catalina 320 #114

 

[Stu Jackson]

Why complicate a simple (potential) arrangement?

So many people "share" boats, and Latitude 38, for one, have showed or discussed ways to have partnerships. No one said the partnership had to be 50/50...

Complicating this with perhaps misunderstandings or deeper issues takes a simple thing and makes it complicated.

Or, or course, I might have gotten it wrong, in which case all of my other friends with boat partnerships are screwed.

 

[Ron20324]

I have not yet seen mention of the fact if you are the skipper with a 6-pack license and you charter the boat, then the boat itself must meet certain CG requirements.

 

[dvideohd]

IF - formed a LLP or LLC - with youself as the general partner, and did all the nifty things you have to do.... You could sell portions of the partnership or something similar... it can get fairly complex.... still.. if you want to buffer the costs - there are folks that keep themselves as general partner and have enough partners to pay all boat expenses...

these are hard times to find folks to do this - but if you have the "bargin" - may be things would work out....

--jerry

 

[sailingdog]

Peggie—

A lot of how his insurance company would respond depends on how he asked. If he asked: "If my friend uses my boat for a week, what do I need to do to cover his use", is going to probably get a very different answer from "If I rent my boat to someone one week every month, what do I need to cover his use".

The former will get an answer much like what he got... put them on the policy as an operator. The second will not—that I'm pretty sure of.

He's asked his insurance company what's required...they told him. It's unlikely that any insurance company would insure any illegal operation of boat.

 

[Terry in Naples]

We have way too much regulation in this counrty. As citizens we just seem to take it. Don't anchor here, do not fish here. do not dock your boat here, slow down speed zone, wear your life jacket, do you have a whistle and a horn, fishing license, boating license, anchoring sticker, mooring fields only, NO BOATS, 6 pack, captains licenses, guide licenses, city sticker, state sticker, excise tax, fuel tax, insurance premiums skyrocket in Florida, deductables raised, all or nothing coverage, no boats over 30 feet insured here, 3 day stay maximum in this anchorage. Do not dock dinghys, No Tresspassing to the public, Do not go to Cuba unless you are a government official or obtain special permission. Do not go into the Keys sanctuary unless you are employed by the government. (they are way smarter than the rest of us) Post this this discharge sticker on your boat, inscribe your documentation number, post your registration, current Flares, fire extinguishers, The list is endless. Sure these are important but do we really need a sheriff police, wildlife police, city waterfront police, county waterfront police, conservation police, coast guard, coast guard auxzillary all stoppong boats to check all these items
I am not an anarchist so don't diss me. Just tired of so many reguolations. Here is a guy trying to cut a few costs and now sees how many people with nothing to do with this want a say in how and what he can do.
anna sanna santanna .."its always something"

 

[catsailor]

Seems like a very expensive way to save money

Surely, Sailingdog is correct about the insurance. I think that is obvious and incontrovertible since you are charging for the rent. If there is true ownership sharing, that has complications which have been discussed. The Coast Guard requirements for uninspected vessels are modest, but you need to check the list.

Then there is the matter of renter dings. I rented a house out for a time.... Uhg. You will get ~125% of your normal maintanance, not 75%.

Skip movies, skip dinner out, wear old clothes, improve the energy efficiency of your house, drive less and at the speed limit, DIY on the boat, anchor out, find a cheaper marina... motor less and sail more.