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
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
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
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.
, 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.