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sailingblue · 01-03-2023, 06:29

Curious if people have experience with owning a fraction of a sailboat with a couple of people.

Not referring to our heading from a company who sells to 10 owners. Specifically curious if anyone has teamed up with others to buy a dream boat to share ownership in.

Would you?

Have you?

**TrentePieds** · 01-03-2023, 12:30

IMO money between friends is never a good idea. People's circumstances change, and sure as little apples, if, or more likely when, one participant needs to get his "investment" out, one side or t'other is going to wind up hurting!

Another thing you need to look out for is that at least in the strict legal sense, if you declare yourselves "partners", each one of you becomes wholly liable for the other's debts! That includes debt NOT relating to the jointly owned boat!

Best, perhaps, to de-escalate your wants, and get a boat you can afford to keep without financial contributions from friends!

Remember that a lot of people can find the money to BUY a boat. It's the KEEPING of a boat that slays people financially!

TrentePieds

Montanan · 01-03-2023, 12:49

Informative Reference:

Comparative ownership mechanisms.

https://www.boats.com/boat-buyers-guide/fractional-boat-ownership/

S/V Illusion · 01-03-2023, 13:31

It’s a cheap way to kind of own a boat but begs the question - if you can’t afford a boat, why buy one? It’s a purely discretionary toy purchase.

ChrisJHC · 01-03-2023, 13:56

I have seen it work really well with three co-owners who were all mates before they started.

Every month each skipper paid a set amount into a shared bank account to cover running costs.
One-off expenses were split equally as they arose.

During the year, they rotated the skipper every month for club racing and weekends away.
During summer, they cruised for 6 weeks with each owner having the boat for their own purposes for two weeks at a time (flying in/out at the end of each two week period).

The important thing is to make sure that all arrangements are well understood (and preferably documented) before going into the deal.

5BTM · 01-03-2023, 13:59

No experience with sharing a boat but going on vacation with friends was lesson enough.

Cheyne · 01-03-2023, 17:29

I would only do it if the other owners were never allowed on the boat.

Cheyne

nightowle · 01-03-2023, 17:48

From a friend's experience, it all worked fine until one of the co-owners was drunk and plowed the boat into a bridge support. A young lady was launched over the bow and was killed. The friend wasn't on board, but as co-owner liability ensued.

AKA-None · 01-03-2023, 18:19

All I know is that buying one after is a pain to get all the right signatures on all the paperwork was a pita

**TrentePieds** · 01-03-2023, 19:31

A comment arising from nightowle's #8:

Indeed! And no sensible insurance underwriter would write a policy on a boat owned in some kind of loosey-goosey share ownership or partnership.

It would be possible to cobble up something akin to a Strata Corporation holding real estate for the purpose of owning a boat, but since a boat is NOT real estate - but PERSONAL PROPERTY - it is doubtful that in case of dispute between the "unit owners" a court would pay the slightest attention to any opinion held by the "unit owners" that liability should be divisible and apportioned as it is done by a Strata Corporation. Such a corporation can only be formed under the provisions of duly enacted legislation in the given jurisdiction and must be operated strictly - and I mean STRICTLY - in accordance with procedures laid down in that legislation.

Fortunate the man who learns early in life to avoid financial entanglements involving discretionary consumption :-)!

Cheers

TP

Brioche · 01-03-2023, 19:53

I have litigated numerous ownership breakups, mainly businesses, but also assets like vacation homes, boats, etc. Some general observations:

1. Ownership should be though an entity, such as a corporation or LLC. That protects you against your "partner's" possible negligence.
2. If things go well, well that's great --sometimes things do work out!
3. Make plans for succession. If your partner dies, who gets that share and what are their rights. A lawyer helping you put the entity together can walk you through the ways of handling this.
4. As others have said, it is best to be clear on potential points of disagreement and how to resolve those, such as escrowing money for and deciding when it is necessary to do updates or repairs, and how to schedule taking turns using the boat.
5. Hope for the best, but assume that things will not work out at some point and prepare for the worst. To avoid litigation, include worst-case procedures in your agreement.
6. A common provision is a buy-sell provision. If you can afford it, this is a good way to resolve disputes -- when you reach an impasse, you name a price and either your partner buys you out for that price or you buy them out.
7. If you can't afford to buy out your partner in an extreme case, then another common provision would allow you to force a public sale -- if you reach a point where going on together won't work, you can agree in that case the boat will be put on the market and sold within X number of days or months to the highest bidder. Either partner of course could also bid in that case. You have to be prepared for a possible sale at a loss.
8. Also consider where the boat might be and get a knowledgable lawyer to advise you on the mechanics of enforcing an agreement if the boat is in distant lands.

Obviously, I think that boat sharing could work well as long as partners remain in agreement, but should have strong protections in case of disagreement.

Not quite on point, but illustrating my concerns, we once had a couple who split ownership of a nice house on a very nice beach. After many happy years, the two sets of owners came to blows. We worked hard for many months to bring them to agreement (while they were paying substantial fees) and eventually got everyone to come to the table to sign off on a settlement. Then at the planned closing it turned out that there was a wooden pelican by the front door that we had not talked about, and the whole settlement fell apart because they could not agree on who got the pelican .

Hope this gives you something to consider.

Galumay · 01-03-2023, 20:13

Like everything in life, it can work, it can go wrong.

We have made it work, but we took a completely trusting and no documentation approach, the 3 parties agreed the friendships were worth more than any material value. Boat is owned in one name, no written agreements about anything. We split the costs.

We have used the same structure for 3 boats (same owners/friends), has worked for many years.

garyfdl · 01-03-2023, 20:38

The best way to ruin a friendship? Buy a boat together.

I speak from experience. 20 years ago I and a co-worker/friend (I guy I thought I got along good with, and hunted and fished with for a couple years) bought a boat for sport fishing on the Great Lakes. First year went pretty good. Expenses were split 50/50.

Because the engines were 'tired' I suggested we rebuild them (two 4 cyl Mercruisers) during the winter off-season. Cost was ~$1000 / $500 ea, with us doing most of the labor. He 'vetoed', said the boat wasn't worth putting that much money into it. So I backed off.

Fast forward to the summer. We were using the boat separately more, and I was always the one fueling it up. He always had an excuse - that he got back after the fuel dock was closed, but he would pay me back (he didn't). Then I made a 4 week trip and, while I was out-of-country, I wasn't out-of-touch. When I came back I was informed that I owed him $900. Seems while I was gone, he unilaterally decided to have new canvas made for the boat, without telling me.

I paid him, and listed the boat the next day (title was me 'or' him). He bought me out.

Haven't spoken to, or seen him since.