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Old 09-04-2006, 22:39   #1
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Admiralty Law - Boat timeshare concept launches

By MARK ERCOLIN
Waterfront News Columnist


It’s nice to share. At least that’s what a certain insipid purple dinosaur says on public television. But if you’re an adult who wants to share in the use of a boat, it can become a rather complicated process.
Some people without the resources or the inclination to buy a vessel still want the use of a boat on a part time basis. In the past, this meant renting or chartering a boat under the terms of a charter contract. Recently though, for better or worse, some are trying to adapt the land-based strategy of timesharing to the boat chartering concept. Before analyzing what this might mean to the potential timeshare client, it might help to review what traditional boat chartering usually entails.
From the legal perspective, there are three types of charter arrangements: time charters, voyage charters and demise charters, also known as a “bareboat” charter.
A voyage charter is when the underlying vessel owner takes responsibility for the captain and crew, and the vessel is hired to get something or someone to a designated location. Think of a voyage charter as hiring a taxi or a delivery service.
In a time charter, the underlying vessel owner remains responsible for the captain and crew, but the vessel is hired for a certain length of time and the renting party often determines the destinations the boat will go to before it returns to its homeport at a designated hour. Chartering a fishing or diving boat with a captain for the afternoon is a pretty good example of a time charter.
In a demise or bareboat charter, the renter becomes, in effect, the owner of the boat from the time he or she takes control of it. If the vessel requires a captain and crew, they will be hired under a separate contract and the renter becomes liable for damage to the vessel — and possibly injury to any passengers — during the time of the charter. Think of bareboat chartering as renting a car, except that your platinum card won’t pay for any collision damages.
Boating timeshares appear to be a variation of the bareboat charter concept. This is slightly different in design from land-based timesharing, when the user of the property would have an actual permanent ownership interest in its use and disposal. Upon examination, this difference makes a certain amount of legal sense.
The ownership of real property is usually regulated by the state authorities where the property resides, whereas vessel ownership and the liens that may be incurred by a vessel generally fall under the purview of the federal court. Because of this dichotomy between state and federal systems, creating a workable timeshare situation for a vessel requires careful design.
In Florida, the definition of timeshares was recently expanded to include boats with timeshare agreements lasting three or more years. The vessel timeshares established in the state that I have examined appear to have only one real owner, while all other participants are actually parties to what is basically a bareboat charter contract that will expire before three years. These bareboat participants have no ownership interest in the vessel other than those responsibilities they would otherwise have as a traditional bareboat charter party.
While there may be other timeshare plans out there for vessels, the one previously described, or some similar variation, seems to be the type that is enduring under legal scrutiny.
So, what does this mean if you’re considering a vessel timeshare program as an alternative to actual boat ownership? I would advise checking all contracts carefully well before signing, and consider the following:
First, you may be committing yourself to a specific boat to be used at specific times. Trying to change that commitment likely would result in financial forfeit. Moreover, a timeshare may not grant any real ownership interest to the vessel, meaning your ability to “sell” your contract interest — if it is even allowed — may be limited.
This might also mean being prepared for the value of the timeshare to actually depreciate as time goes on, as opposed to a land-based timesharing that can sometimes appreciate. Additionally, while a vessel timeshare participant may not have an actual ownership interest in the boat, there would still be a liability concern even when others are using the vessel. For this reason, you should make sure the timeshare program you join is properly insured for such contingencies.
As you can see, boat timesharing may not be for everyone and should be approached with the mind of a sophisticated consumer. Remember, although Barney the TV dinosaur might tell us how nice it is to share, keep in mind that he’s really just a guy in a big purple sock.

Mark Ercolin is a Fort Lauderdale-based attorney. This month’s column marks his 10th year writing for the Waterfront News.
The information offered in this column is summary in nature and should not be applied to specific cases or situations.
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Old 09-04-2006, 22:44   #2
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K, very interesting article. Could you cite the source?
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Old 09-04-2006, 22:51   #3
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Just did Kai!!
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Old 10-04-2006, 13:32   #4
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Boat share has been used for many years on this side of the pond. Experience has shown the following points

It is a great way of destroying friendships when a boat share is entered into without considering how it should work.

It must be entered into as a business proposition (with written agreements and methodology for selling your part of the boat share), and this needs to include methodology for agreeing expenses for things above normal wear and tear (e.g. that new plotter you have always wanted) and how maintenance issues are dealt with.

It can be a way of creating new friendships.
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Old 10-04-2006, 17:47   #5
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Very good post, CaptainK.

I am IN the charter business and didn't know that little tidbit about the time share vessels. I have often suggested to people that it might be a good alternative to chartering for people who want something different. I will stop doing so immediately.
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Old 10-04-2006, 17:50   #6
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Yeah Sean.

I surprise myself, on what knowledgeable stuff that I come across. And thought I already knew?

It just goes to show. That you can teach an old dog new tricks? :cubalibre
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Old 11-04-2006, 03:16   #7
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Time share and boat share in UK are not the same. The standard boat registration (Pt 1) is akin to ownership of a commercial vessel, and up to 64 (IIRC) shares in the boat can be divided up. Thus normal boat insurance and responsibilities can be equated to a boat share sindicate. There appear to be no real problems arising from this form of ownership other than that experienced by clashes in personality , and even these can normally be smoothed over provided the share is done on a proper legal contract. the problems happen when it is done on a nod and a shake of the hand, and then one of the sharers doesnt meet his commitments.
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Old 11-04-2006, 07:40   #8
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Yes.
After reading that article myself. It makes me very happy that I bought my boat. And to not having to go out and do any time sharing of any boat.
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