Boat co-ownership

[Jsol]

I did a partnership with a good friend through two boats. We were college roommates and knew each other's tendencies well. We also had similar sailing preferences. We drew up a legal agreement etc. and split everything 50/50. Our wives were new to sailing at the time, so we always sailed together so time management wasn't really an issue. We are still good friends, but I would never do it again.
Over time, our personal time requirements began to change and we got out in time. The potential sticking points became more about time spent commissioning, maintaining, cleaning etc. we always did our own maintenance and one of us preferred to get all the work done before sailing and the other was more interested in maximizing sailing time and letting the other stuff go until 'later'. I think if we continued down this path we would have ruined our friendship.
If you are truly looking to just sail for 3 months a year, I would look into sailing clubs or time share arrangements with those type of companies. There is a local sailing school locally that allows members to pay a membership fee and use their range of boats by requesting the size, length of time you want it etc. This can be a very 'economical' way to have use of a sailboat...

[a64pilot]

I see it a lot with airplanes, very few success stories, many, many horror stories.
I think Lawyers love these partnerships.
I think of it as like sharing a Wife. I don't think that would work out well either

[Brocker]

Definitely, co-ownership is a tricky one. Shared hands on maintenance, problems like usage without upkeep, an agreed upon exit strategy for sure, are all elements that can create issues (and that's just sharing a wife, never mind a sailboat... ). I want to sail for 3 months straight through so I don't know that sailing clubs generally do that, or if there are clubs in the Caribbean that have this feature. I'm guessing not. I'm thinking that if a partner gets on the boat and it's ready to go, (or takes his annual turn to 'get it ready' - then he/she leaves it for the other partner 3 months later, 'ready to go', it's an easier setup than on/off week/weekend sailing throughout the year, which I would not do. Basically like 'filling the tank' when done, though many more elements to consider, as many of you have so kindly provided insight on.

[goboatingnow]

I did it once , never again. Prefer to own no boat then a shared ownership.

Good way to end friendships

Dave

[markpierce]

Originally Posted by goboatingnow

I did it once , never again. Prefer to own no boat then a shared ownership.

Good way to end friendships

That's always my fear.

[BandB]

Originally Posted by goboatingnow

I did it once , never again. Prefer to own no boat then a shared ownership.

Good way to end friendships

Dave

Friendships end over borrowed lawnmowers and boats are infinitely more risky.

[Stumble]

Originally Posted by a64pilot

I see it a lot with airplanes, very few success stories, many, many horror stories.
I think Lawyers love these partnerships.
I think of it as like sharing a Wife. I don't think that would work out well either

Actually I hate them. Because people always come to me after there is an issue. Most of my practice is prospective, ie trying to keep clients out of issues like this, so seeing people caught in these situations for me is really frustrating.

My basic rule of thumb for partnership agreements of all types is to assume that the deal won't work out. People hate hearing it, but a good partnership agreement needs to assume that the deal will fall through, and actively work at the beginning to minimize the problems.

So the first thing I do is a buyout clause, or a forced sale clause, or both. Then clauses that deal with settling agreements which can either be a coin toss or assigned responsibilities. Finally berthing requirements, money issues, location of the boat, ect. All need to be addressed, and provisions made for changes in the future.

All in all it looks very much like a pre-nuptial agreement, or a partnership agreement for a business.

Finally keep this in mind. Having a lawyer draw something like this up costs about $1,500. Going to court over something like this without an agreement can cost $20,000 or more each. So if you choose to have a partner spend a little bit of money on the front end and get an attorney to draw up a partnership agreement.

[a64pilot]

Only reason I said I think Lawyers like these partnerships, is the assumption that many end up in court. It was a tongue in cheek comment

[Downtime]

I am part of a co-ownership with a coworker/friend.

We alternate on call weekends (normally on call 26 weeks a year) so there is no chance of us both being on the boat at the same time without a lot of planning. We each pay half and keep spreadsheets and docs in a shared Evernote.

I trust him to the point that I committed to buying the boat sight unseen. He sent pictures and gave it a good once over.

I would never buy a boat with someone who didn't take maintenance and safety seriously. We can both do most mechanical and electrical work.

[Brocker]

Originally Posted by Stumble

Actually I hate them. Because people always come to me after there is an issue. Most of my practice is prospective, ie trying to keep clients out of issues like this, so seeing people caught in these situations for me is really frustrating.

My basic rule of thumb for partnership agreements of all types is to assume that the deal won't work out. People hate hearing it, but a good partnership agreement needs to assume that the deal will fall through, and actively work at the beginning to minimize the problems.

So the first thing I do is a buyout clause, or a forced sale clause, or both. Then clauses that deal with settling agreements which can either be a coin toss or assigned responsibilities. Finally berthing requirements, money issues, location of the boat, ect. All need to be addressed, and provisions made for changes in the future.

All in all it looks very much like a pre-nuptial agreement, or a partnership agreement for a business.

Finally keep this in mind. Having a lawyer draw something like this up costs about $1,500. Going to court over something like this without an agreement can cost $20,000 or more each. So if you choose to have a partner spend a little bit of money on the front end and get an attorney to draw up a partnership agreement.

That makes perfect sense. Expect things to go sideways and plan - as best you can - an approach for every possible occurrence. Legal fees of 1500 dollars, in particular for a 300-500K investment, is good insurance. I still feel that boat usage shared in 3 month 'chunks' helps avoid on going week to week issues that could stir the pot a little too frequently.

[BandB]

Originally Posted by Brocker

That makes perfect sense. Expect things to go sideways and plan - as best you can - an approach for every possible occurrence. Legal fees of 1500 dollars, in particular for a 300-500K investment, is good insurance. I still feel that boat usage shared in 3 month 'chunks' helps avoid on going week to week issues that could stir the pot a little too frequently.

Except it doesn't insure you of anything going right. All it does is insures that there is a legal agreement in the event of disagreement and to support future litigation.

You can think you're going to beat the odds and maybe you will, but 80-90% of partnerships have problems.

[Stumble]

Originally Posted by BandB

Except it doesn't insure you of anything going right. All it does is insures that there is a legal agreement in the event of disagreement and to support future litigation.

You can think you're going to beat the odds and maybe you will, but 80-90% of partnerships have problems.

A good agreement can save massively on any future issues. Just a simple forced liquidation clause and a mediation clause alone will pay for the entire partnership agreement is/ when a problem occurs.

It does provide some insurance against an issue arising since issues are clearly layer out. But what you are really insuring against is the potential legal cost of litigation in the future.

[letsgetsailing3]

Originally Posted by BandB

Except it doesn't insure you of anything going right. All it does is insures that there is a legal agreement in the event of disagreement and to support future litigation.

You can think you're going to beat the odds and maybe you will, but 80-90% of partnerships have problems.

90% of statistics are made up.

[Brocker]

Ha Ha. That's very funny.

[RainDog]

I have also done this and it was a good experience. As Stumble points out, before you begin, make sure you specifically agree on exactly how to end the relationship if either party wants out. Also agree in advance on how much per year you will put into the maintenance fund, how it will be used, and what you will do if there is a sudden, large cost (e.g. repower). Make it clear what happens if one party damages the boat. What about if an older sail rips when one person is using the boat? Talk through these situations in advance and come to an agreement. Write it down. Then feelings will be less likely to get hurt.

It also is most likely a good idea to agree in advance to have the boat professionally cleaned periodically so that no one is annoyed by the state of the boat.