Why do I need a boat agreement?
Buying a boat is meant to be fun. Sharing that fun (and the cost) with one or more of your friends can be a great idea, and many boats are owned by friends who all pitch in for the cost of the purchase of the boat, and the cost of storing and maintaining it.
However, it’s not uncommon that disagreements break out, and so having an agreement up front, is a very good way to prevent the loss of friendships, and a bitter end to the sweet dream of boat ownership.
What terms should be in a boat agreement?
Your boat agreement should include a user-friendly method of booking the boat, and set out the principles regarding how the use of the boat is to be shared. For example, it’s not fair for one owner to use the boat on all the public holidays, so there needs to be a way of sharing out the peak periods fairly.
The boat agreement should also deal with the cost of maintaining and insuring the boat, and how much time each owner must put into doing the work required to keep a boat. For example, one person is going to have to keep an account of the boat expenses, and make sure these are paid and shared equally. Actually doing this accounting work is a burden, so you might decide that this is a job that changes hands each year.
Your will also need to set out the terms on which a person can sell his or her share, and those terms will probably include an option for the other owners to buy the share of a boat owner who wants to leave.
What about rules? Do you want specific rules about how to clean the boat after you use it and where everything is stored? The level of detail might depend on the particular owners.
Finally, and perhaps most importantly, you need a dispute resolution clause. What happens if there is a disagreement? You want to have a process where the parties must deal with their differences and make every effort to avoid the dispute going to court.
If you would like further information about boat agreements, please contact us and we can prepare a boat agreement that will perfectly fit your situation.