It’s not your boat, it’s our boat. That’s the first rule of a boat sharing agreement.
There is a lot of responsibility to owning a boat — most of it financial. A boat sharing agreement can be handy for people who want the luxury of owning a boat without having to shoulder all of the financial commitment. It’s also a happy medium for friends and family members to mutually benefit from owning a boat. However, before you strike an agreement to buy a boat with joint-ownership, make sure everyone involved is fully committed.
Owning any type of property with someone else can cause a strain on the relationship if terms and conditions are not set. So, start by asking the right questions. If no one in the group has owned a boat previously, talk to someone who has — it’s highly recommended.
Ownership rights should be divided as equally as possible: 50 percent for two owners, 33 percent for three owners, etc. This will be important when it comes to determining costs for maintenance, repairs, taxes and scheduling. Defining what ownership means is also useful so no one oversteps any boundaries without full agreement.
Research and purchase the boat with all the owners involved. It should be a vessel that everyone can handle and drive safely and meets the agreed upon purposes: fishing, skiing, wakeboarding, overnighting, etc. Whether it’s a new or used boat, try to test drive it first. You don’t want to buy a boat that only some of the owners enjoy. The price, style and model should all be something that is agreed on before money is exchanged.
As mentioned before, owning a boat is a serious financial commitment, and when you share a boat, you need to discuss every financial obligation involved. Here is a list of items you need to discuss with all owners:
Even if you buy a new boat, maintenance (and the associated costs) is something that every boat requires. Supplies to keep your boat running in the best condition can add up to a substantial amount over a season. Set up an account that everyone contributes to, and make sure everyone knows when money is being deducted for maintenance costs.
Outline what is considered normal wear and tear, and what is major damage, like a smashed lower unit. You should also include context for damages incurred while the boat was in the care of an owner, versus something that occurred at the marina or during a natural disaster. You can pull from the maintenance account or create a separate emergency fund to cover damages from natural disasters or incidentals. You should also discuss sole responsibility for repair costs when damages are excessive or the result of carelessness.
In the event of unforeseeable circumstances, insurance can be your saving grace. If you live near waters that are active during hurricane season, boat insurance is a necessity. States also will have unique requirements for insurance coverage. Contact an insurance provider and set up a meeting to discuss policy options. Make sure each owner is listed as a partner on the policy and that the policy covers other operators. Again, agreeing on the premiums, deductibles, and cost sharing is vital.
The spring and summer are notorious for high gas prices, and conveniently for the bank account of marina owners, those are also the best seasons for being out on the water. Create a plan for keeping the boat refueled between each owner’s uses. Incidentals can also include food and beverages, supplies, tools, cleaning, taxes and registration fees. It’s up to the owners to decide which costs are and are not covered by the agreement.
Where are you going to keep the boat during the offseason? Who’s going to house it during the season? Can you afford to share a marina slip or a boat house? Is purchasing a storage facility that’s easily accessible by all parties the best option?
These questions and more need to be answered when it comes to storing the boat. Storage needs to be convenient and cost effective for everyone.
How do you decide who gets the boat at any given time? Well, if your partner is your fishing buddy, then it’s likely you won’t be on the boat without him or her. Often, however, joint-ownership means creating a schedule and assigning days or weekends to each owner. Scheduling can be tricky, especially around holidays, but it’s worth organizing ahead of time.
Just like any relationship, conflict happens. If you run into an issue with another owner, ask a third party to intervene and resolve the situation. The last thing you want is a relationship ruined over a boat.
Selling, Buyouts and Transfers
Discussing the end of a partnership — at the beginning — will save you some headaches in the long run. If an owner wants out of the agreement, passes away, or wants to transfer their ownership, your agreement should include language that specifies the process to handle these events.
Want more information on boat sharing? Visit Nautical Monkey for tools that can help manage your boat sharing agreement, from expense tracking to scheduling. If you have additional tips for joint ownership of a boat, let us know!