When you "buy" a slip, what are you really buying?

[Jdege]

When you buy a house, you have title to the land and the buildings on it.

When you buy a slip, you don't get title to the bit of water between the finger piers.

What are you actually buying?

[ilenart]

Depends where you are; what jurisdiction you are in. For my local club you are buying a sublease with various rights dependent on the main lease with the club and the state government. So no you do not get title to anything; same as any lease or rental agreement.

Ilenart

[valhalla360]

The ones I've seen are basically a condominium setups.

Make sure to check what the annual fees are and if they can do special assessments. That can really undermine the value if you pay almost as much as the guy in the next slip just renting for the season.

[TheOffice]

In Maryland you are buying an easement to use the space between the piling and the right to use the pier.

[CaptTom]

Lots of different ways to slice that one. Maine doesn't allow "dockominiums." Instead of a slip, I own a "membership" in a club. The club owns the land down to the low-water mark (a quirk of Maine law) and rents the submerged lands from the state. The by-laws of the club give me exclusive right to use "my" slip. The members own the club, and it takes a 2/3 majority to change the by-laws.

So, in theory, the other members could vote to sell the whole marina. But we'd then split the proceeds which would likely more than repay my initial investment.

This arrangement also has tax and insurance benefits. Property tax for one marina is much lower than if each member owned and paid taxes on "their" slip. The town tried that once and it went all the way to the state supreme court. They still occasionally try to sneak in an assessment for the land they don't own under the docks. Then we have to wave the state lease under their noses. At that point they apologize for their "mistake." Always makes me wonder if maybe they were hoping we wouldn't notice.

[moctrams]

I own a deeded 35-foot slip at Flag Harbor in St. Leonard, MD. The annual fee is $1500/year. The Maryland tax is $200/year. We do have special assessments from time to time. One time to repair the jetty and about five years ago to rebuild the docks. I have been at Flag harbor for over 30 years and feel it is my second home. We have potluck suppers on Friday nights, annual oyster roast and all kinds of events. As long as I keep up my annual fees, the slip is MINE to inherit or sell.

[night0wl]

Originally Posted by Jdege

When you buy a house, you have title to the land and the buildings on it.

When you buy a slip, you don't get title to the bit of water between the finger piers.

What are you actually buying?

See this thread I posted in the past: http://www.cruisersforum.com/forums/...ms-199097.html

Here in Florida, there are two models. Most slips are a share of a piece of land that is in a condominium. The condominium has a underwater land lease from the State of FL for an area where the docks go. Then the condominium sells/assigns those slips. You dont have any title to the underwater land, rather to the condo, so you dont pay property tax, rather a sales tax when you buy the slip. Your monthly assessments to the condo pay for the property tax for the common shoreside elements.

The second, and in my opinion more preferable model, which I chose to buy into. There are rare marinas that actually own the land under the water. I've found that these were typically land in the 40s/50s that was dredged, then flooded/connected to open water by a developer and then sold to owners. There is no way you could do this now with the EPA and Army Corps permits being impossible to get for dredge/fill projects. You have a deed and title to that underwater property since its essentially land you owned above water that you chose to "flood". (I've always wondered what this means from a wetlands mitigation perspective). You are also part of a condo association that owns and pays for and maintains the shoreside elements. For example, we have a clubhouse, a pool, parking lots, gas grills, and full time staff. I do pay annual property tax on my piece of waterfront. I cannot homestead it, so my property tax is going up a lot given the values are spiking in FL.

Given a choice, I still prefer the deeded freehold model. I worry about land leases not being renewed. I also worry about the State charging a lot at lease renewal or putting onerous requirements (such as new public pumpouts) at lease renewal. Also, as mentioned earlier, its just more rare to have deeded land since its just not possible to do those massive dredge and fill projects in the USA today given the environmental considerations.

[tomlisasail]

You're right, we have your second option. I said I'd never buy a slip or waterfront home for that matter. We have a slip in Marco Island, Fl.. We had to leave our rental slip after Irma and went to an awesome marina and paid significantly more for rent. We began to see a diminishing amount of affordable rental slips. We ended up buying a slip. We got it at a market price and don't have to worry about finding a dock form time to time. We basically own nothing except the requirement to pay dues and assessments. The only marina that I know of in the area were you actually own the bottom under your slip costs 3 times more than our slip and you have to pay property taxes plus HOA. If we get what we paid for the slip $37,500, plus closing, then we will come out ahead because our monthly cost is slightly less then renting.

[BruceS]

Yep. We own as Nightowl says for the second type.
Not sure but I think the original poster wanted "what do you get"?
Lawns & common facilities maintained.
Twice a week (if required) pump out of grey & black water.
Twice a week pick up & disposal of rubbish. (doesn't include big hard rubbish like old decking or fridges!)
Hose connection to potable 'town' water supply. (free)
Power connection. (small connection fee plus pay for what you use ... metered)
Parking for 3 vehicles out front.
Security gated.

NO buildings allowed .... not even a car port etc.
Similar to what we call in Australia, Strata Title but called Community Title.

[jackheape]

As others have said depends on how the marina owner participation was set up. I recently looked at pruchasing a slip in Myrtle Beach SC. It was set up as a condominium. Cost would have been $8000. It was deeded slip, with monthly condo fees of almost $300 a month. Several problems though. One, marina was part of a large condo housing complex, so the special assessment costs to had to be shared by the slip owners to pay for housing condo up keep. Two, the marina needed to be dredged and the slip that was for sale only had 2 ft of water in it at low tide. So the dredging would have been another cost. Apparently it has tobe dredged every 12-15 years. And three, the bulwarks surrounding the marina were falling in and would have to be replaced soon, for a cost of over $4 million. So...not buying into that. Be careful buying into anything that has shared ownership. It can be a nightmare.

[Jdege]

What I'm looking for are what are the guarantees?

Suppose, for example, a storm sends all the boats and pilings out down the river.

Is the marina obligated to rebuild exactly the same structure, so that everyone has "their" slip restored? Or is the marina only obligated to provide you with an equivalent slip?

If the marina, rather, goes into bankruptcy, how much of your "investment" is recoverable? Do you have a claim on the assets? If a new owner picks up the pieces, is the new owner obligated to provide you with a slip? Even if the new owner decides on a business model that doesn't include providing slips?

[belizesailor]

Jdedge...as posted, it all depends on the venue. No one can give you a detailed answer without knowing where you plan to buy. [emoji780]

[Jdege]

Originally Posted by belizesailor

Jdedge...as posted, it all depends on the venue. No one can give you a detailed answer without knowing where you plan to buy. [emoji780]

Mostly, I think, is reading the contact carefully, studying the applicable statutes, and searching out and reviewing any relevant court precedents.

Most folks would say "talk to a lawyer", but I've not found that useful advice unless you could find someone who actually made a specialty out of this. The advice of a lawyer outside his area of expertise is of minimal value.

[mvweebles]

I own two slips. More accurately, I own one slip in St Pete Beach Florida that appears on the deed of my condo on the ICW. I also "own" slip at Pier 39 in San Francisco, which is a lease arrangement with about 30-years left on it. I also looked a slip in emeryville CA that was a dock-a-minimum arrangement. In my opinion, the deeded slip in St Pete Beach makes financial sense. The other two do not. Fees are slightly lower than market, but in my opinion, not enough to offset the risk of ownership.

[valhalla360]

Originally Posted by Jdege

What I'm looking for are what are the guarantees?

Suppose, for example, a storm sends all the boats and pilings out down the river.

Is the marina obligated to rebuild exactly the same structure, so that everyone has "their" slip restored? Or is the marina only obligated to provide you with an equivalent slip?

If the marina, rather, goes into bankruptcy, how much of your "investment" is recoverable? Do you have a claim on the assets? If a new owner picks up the pieces, is the new owner obligated to provide you with a slip? Even if the new owner decides on a business model that doesn't include providing slips?

Hopefully???? they have insurance to cover something so major but realistically, you may be without a slip until they get it rebuilt which could take months or years.

Any deductibles or non-insured losses...expect an assessment you (as an owner) pay to fix it.

If it goes bankrupt...expect it to get messy and if it's big dollars, plan to hire a lawyer. A lot depends on WHY it went bankrupt.

Do your research and assume the worst before plunking down your cash.