Boat co-ownership

[Brocker]

Has anyone on this forum partnered/shared ownership of a boat? I’ve read the Moorings ownership program posts here but it seems sharing a boat with one other owner could be better. I’d sail 3 months a year, alternating with a partner who’d use it the other 3 months, leaving it on the hard for the remaining 6 months. Capital outlay/costs would be halved. Most potential issues – such as need to sell, usage scheduling, cost sharing, boat damage during use - could be worked into a purchase/partner agreement. Does anyone have real life experience with co-ownership of a boat? Thanks!

[Horror Hotel]

Boats and maintenance decisions are generally far to personal to share with someone. It might work if you were extremely easy going and just didn't care about most things and it would help if your partner was the same. Having a vote or argument every time a hole needed to be drilled would get old very quick. For these reasons it's really not very common at all.

[Stumble]

Brocker,

I am currently involved in a few co-ownership agreements, and have written a number of them over the years. When they work it can be a huge money saver, and help relieve some of the stress of ownership. When they don't work it can be the biggest mistake you can make with a boat.

The biggest issues I see are not having enough money dedicated to the boat at the outset, and not having clear rules about how things like usage, disagreements, maintenance will work.

I have drafted a few for clients, plus my own and have a pretty good idea of how to work thru these problems, but it can be tricky.

[Kenomac]

A partnership... is a difficult ship to sail.

[letsgetsailing3]

I did this with a good friend once, and no problems.

I don't know about with strangers.

[Brocker]

Thanks for the comments so far. Good to hear there is a partnership success story out there. Yes, I'm sure it's a challenge and it's got to be the right person/couple, no doubt about it. Framing the agreement and asking all the 'tough questions' at the outset - per attorney recommendations - would be critical I'm sure. I'm guessing that the partner would have to share similar objectives and of course these could change over time. I only want to be sailing 3 months a year so it seems a waste to have the boat sitting/not being used. Not much different than having it in a Moorings rental pool except there's only the other partner using it. Thanks!

[Macblaze]

These guys (AMAROK Partnership - Info Page) do it with a Canal boat in France when they aren't on their original boats. I was so tempted...

[Brocker]

Great tip. Friends rented one of those for a week and had a perfect holiday. They've got some good basic guidelines for their partnership and I see they've found a partner since.

[BandB]

Originally Posted by Brocker

Has anyone on this forum partnered/shared ownership of a boat? I’ve read the Moorings ownership program posts here but it seems sharing a boat with one other owner could be better. I’d sail 3 months a year, alternating with a partner who’d use it the other 3 months, leaving it on the hard for the remaining 6 months. Capital outlay/costs would be halved. Most potential issues – such as need to sell, usage scheduling, cost sharing, boat damage during use - could be worked into a purchase/partner agreement. Does anyone have real life experience with co-ownership of a boat? Thanks!

I've known first hand of such situations. Several were relatives. Among those most worked although I know two where one brother wasn't holding up his end of things.

I've also known non relative situations. Two sets of them work well as neither uses the boat much. I also know one situation where two partners owned a boat without any true legal partnership. One operated drunk and wrecked with one death involved. The other one got sued by the victims of the wreck as well for several million dollars. Ultimately insurance settled but it was also financially devastating.

In general it seems it works best when neither partner uses the boat much and conflict comes when they are both heavy users. Where it's family and they actually use together, it seems to go decently.

Now my personal opinion. Partnerships in any situation are an extremely difficult arrangement. There is no one who can make a decision. All votes can go 1 to 1 with nothing resolved. If one is going to enter into one then have lawyers write up a good agreement with a pre-defined escape mechanism and make it an LLC to protect yourself. Have everything detailed so there is a clear method of resolving issues.

Now, why does Moorings work when one made by individuals might not? Because there's someone in charge, someone running things, someone making decisions, someone avoiding and resolving any issues. Basically someone doing all the dirty work. Clear understandings of how things work.

In your partnership, what happens when you both want it at the same time? Or what happens when one party wants to replace a sail and the other wants to just patch and continue? What about when the microwave goes out and one wants to replace it while the other says they don't need it and doesn't want to spend the money? What about when a partner leaves the boat dirty? Whose responsibility to clean it? To get maintenance done?

Actually the most common partnership arrangement is a marriage. Half of them end up in divorce. That's among people in love. Before that you have relationships. 90% of relationships end. If you're going to enter a partnership it has to be very much a business relationship. And it has to be assumed up front that at some point one will want to end it. So must decide up front how that happens.

I wouldn't do it. I'd go through Moorings or someone in the business. But if you are going to do it, be very careful in choosing your partner and be prepared, if they're a friend, to lose that friend.

[Brocker]

Great comments. Disaster at one end and reasonably peaceful at the other. I imagined that to be a possible range of outcomes but it always hits closer to home when someone states it for you, especially the 'crash, die and sue' story. Much appreciated.

[redcobra]

I di this once with a good friend. After two years we were no longer friends and we sold the boat. He still owes me money and I never see him.
Worst thing I ever did.
I bought my own and never have any arguments with myself.

[Brocker]

Sorry to hear that. It is, essentially, going into business with someone, and unfortunately friends aren't necessarily the best choice for that. Again, always a risk with partnerships and it is very helpful to hear the various scenarios, good and bad, that have occurred. Thanks.

[letsgetsailing3]

The key is to anticipate things a bit. It's not THAT complicated. Broken parts? They get fixed at shared expense. One person breaks the boat, you're STILL partners, and you have insurance. 50/50, right? If your partner is breaking the boat all the time, it will get old, and you might need to sell.

You can't anticipate that you might want the boat the same weekend? That's why you have a schedule. One wants to sell, and the other wants to keep? Have a plan. One wants to allow glass beer bottles and the other wants only cans? Have a way to compromise in advance. Rock, paper, scissors? Get as much worked out BEFORE you take ownership as you can.

A little organization, and flexibility, goes a long way. If you know the person before you do this, you should also know if you can work with them.

Even with all this, it's a risk. Just make it a manageable one, and do it with someone who has a certain emotional intelligence. Also make sure you also are willing to be reasonable.

It really isn't any different than any partnership, in that it requires a certain amount of compatibility among partners.

[BandB]

Originally Posted by letsgetsailing3

It really isn't any different than any partnership, in that it requires a certain amount of compatibility among partners.

But most partnerships don't work out long term especially when business and pleasure are mixed.

Should be simple. For some reason isn't. Clear detailed rules and structure can definitely help avoid disagreements. But then one decides he just no longer finds it worthwhile to own half a boat. What then? Then it really gets complicated and difficult.

I think this situation is one reason you're seeing a lot of rental programs in addition to chartering come into play with individuals renting to other individuals. But those are relatively new and a lot of issues still to be worked through. Eventually they might become more common where you own the boat, but rent it to others for periods you don't use it, either through friends or through classified type listings with companies arranging those rentals. Something short of chartering.

[letsgetsailing3]

Originally Posted by BandB

But most partnerships don't work out long term especially when business and pleasure are mixed.

Partnerships are just another form of relationship. If you choose your partner well, and organize it right, they work fine. Even if it ends, it will be amicable.

Part of the trick is being perceptive enough to know that when you get to the point that you can't agree on trivial things, you're done.

Dissolving the boat is the FIRST thing in your partnership agreement. Boats are hard to sell, and worth less than you think they should be. Always. Be prepared to take a hit in value if you want out. But also remember that you're really only taking HALF the hit you would have taken if you owned it outright.

Another thing. Don't overbuy, just because you're in a partnership.

It's a partnership, not a fantasy where you get a boat for half price and get to call all the shots, and the boat goes away when you change your mind.