Has anyone ever been in a boat partnership?
Moderator: Jim Walsh
Has anyone ever been in a boat partnership?
I'm interested in peoples opinions about partnerships and/or fractional ownership. I'd love to upgrade to a bigger boat, but thinking this might be the only way to do it...
A written contract is essential
Many years ago I was in a partnership for a few years. It worked out well for me,as my partner lived about 4 hours away from the boat,which was just a few minutes from my house. I think the key though was our written contract / agreement. First, it specified exactly when each of us had the rights to the boat, week by week. We also agreed on monthly contributions to the boats kitty to fund dock fees,maintenance, insurance, etc. I don't remember where we found the contract, but I'm sure some research will help you find one you can modify to suit you. Finally, you need to agree how to dissolve the partnership - who gets the boat or how it can be sold. Handshakes sound good, and friendships are great, but a written agreement / contract removes a lot of potential problems. Good luck.
Exit strategy
I second the above.
My brother has been in a partnership for the last ten or fifteen years with his best friend. So far, everything has gone well. For the first few years, they shared costs equally. Then his friend didn't sail as much, and consequently didn't do as much upkeep. My brother did more, and kept a log. But then the friend has a hard time keeping up fiancially because his job was of a freelance or contractor nature.
Now, my brother considers the boat "essentially" his. And that's all well and good but what if my brother decided to sell?
Also, a contract would protect you if the partner died. Without a contract, legally the heirs would become your partner.
I think it works with them because they are close friends and have the exact same approach to sailing and boat maintenance. (Little as possible) But often, skippers like to arrange the boat in specific ways, and have different ideas of how much to invest in beauty and safety. You need a partner who thinks much alike.
Best of luck,
-Mathias
My brother has been in a partnership for the last ten or fifteen years with his best friend. So far, everything has gone well. For the first few years, they shared costs equally. Then his friend didn't sail as much, and consequently didn't do as much upkeep. My brother did more, and kept a log. But then the friend has a hard time keeping up fiancially because his job was of a freelance or contractor nature.
Now, my brother considers the boat "essentially" his. And that's all well and good but what if my brother decided to sell?
Also, a contract would protect you if the partner died. Without a contract, legally the heirs would become your partner.
I think it works with them because they are close friends and have the exact same approach to sailing and boat maintenance. (Little as possible) But often, skippers like to arrange the boat in specific ways, and have different ideas of how much to invest in beauty and safety. You need a partner who thinks much alike.
Best of luck,
-Mathias
Sunset, CD25
Lake Champlain
Lake Champlain
-
Dick Kobayashi
- Posts: 596
- Joined: Apr 2nd, '05, 16:31
- Location: Former owner of 3 CDs, most recently Susan B, a 25D
How to end it
Nothing last forever, even boat partnerships. You need a written agreement, the most important part of which is how to end it. Usually the person that wants out will give the other partner the right to buy him out - an option of sorts. If the option isn't taken up in a specified time period the boat is sold the money split up.
Dick K
CD 25D Susan B #104
Mattapoisett, MA
Fleet Captain - Northeast Fleet 2014/2015
Tempus Fugit. And not only that, it goes by fast. (Ron Vacarro 1945 - 1971)
CD 25D Susan B #104
Mattapoisett, MA
Fleet Captain - Northeast Fleet 2014/2015
Tempus Fugit. And not only that, it goes by fast. (Ron Vacarro 1945 - 1971)
Go into a partnership with your eyes wide open....
My first boat was a partnership. On the advantage side, it provided me with more sailing for $ than I will ever see again. Maintenance and upgrades were split 4 ways, as was labor which made things much easier. And the partners provided crew for lots of island adventures and we learnt a lot from each other in the process. Ultimately, it ended in disaster due to a bad partner. All said, it was a very good deal even though it ended as a complete loss. So as a voice of experience......
1) Know your partner(s) and their reputation. Go sailing with them, preferably on a short multi-day cruise, and try to understand if their goals are compatible with yours. Are they are racer/day sailor/cruiser/dreamer? What is their skill level? Are they easy to work with or difficult? Neat or Sloppy? You get the idea.
A compatible, responsible, reliable, partner can make or break the partnership, regardless the contract and nice paper you signed. Similarly, a worthless bum who is broke will ruin it for everyone, regardless the quality of the remaining partners. Unfortunately, boats seem to attract the worthless bum type with regularity.
2) Define and agree upon the duration of the partnership and the exit strategy before you get in. For example, maybe you intend to be partners for 3 years then sell your share to the others at some agreed upon price or dissolve the partnership and sell the boat and split the proceeds. Define the terms and duration up front and the terms for early termination. If, after 3 years, it is working out well, you may all decide to renegotiate another 3 but at least you (and they) have an amicable exit agreed upon. And life changes, people get married, jobs move, people get sick etc., so keep the terms relatively short.
3) Agree in advance on how you deal with breakage, especially when it may have been caused by some combination of age and negligence. For example, your partner doesn't pay attention to the engine which over heats and seizes. He claims the failed water pump (age or corrosion) is to blame. You believe if he had checked the temperature gauge or looked at the water flow, he would have noticed before damage was serious. How do you split the cost of the repair? Sooner or later this sort of problem will arise.
In conclusion, boat partnerships can work very well, and even when they don't (like mine), still provide way more sailing fun than I ever could have afforded by myself for the money and time invested.
1) Know your partner(s) and their reputation. Go sailing with them, preferably on a short multi-day cruise, and try to understand if their goals are compatible with yours. Are they are racer/day sailor/cruiser/dreamer? What is their skill level? Are they easy to work with or difficult? Neat or Sloppy? You get the idea.
A compatible, responsible, reliable, partner can make or break the partnership, regardless the contract and nice paper you signed. Similarly, a worthless bum who is broke will ruin it for everyone, regardless the quality of the remaining partners. Unfortunately, boats seem to attract the worthless bum type with regularity.
2) Define and agree upon the duration of the partnership and the exit strategy before you get in. For example, maybe you intend to be partners for 3 years then sell your share to the others at some agreed upon price or dissolve the partnership and sell the boat and split the proceeds. Define the terms and duration up front and the terms for early termination. If, after 3 years, it is working out well, you may all decide to renegotiate another 3 but at least you (and they) have an amicable exit agreed upon. And life changes, people get married, jobs move, people get sick etc., so keep the terms relatively short.
3) Agree in advance on how you deal with breakage, especially when it may have been caused by some combination of age and negligence. For example, your partner doesn't pay attention to the engine which over heats and seizes. He claims the failed water pump (age or corrosion) is to blame. You believe if he had checked the temperature gauge or looked at the water flow, he would have noticed before damage was serious. How do you split the cost of the repair? Sooner or later this sort of problem will arise.
In conclusion, boat partnerships can work very well, and even when they don't (like mine), still provide way more sailing fun than I ever could have afforded by myself for the money and time invested.