Feasibility of shared "ownership?" - SailNet Community
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post #1 of 9 Old 07-28-2016 Thread Starter
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Feasibility of shared "ownership?"

Hi folks,

Sorry for the length of this, I'll get to the point shortly. I'm in a unique position. Before I sold my Catalina 25 on a small Central Ohio reservoir, I bought my current Beneteau 361 and keep it up on Lake Erie. The way the marina administration works for the reservoir, I was able to "keep" my slip, which I lease, there as long as I kept paying the annual fee (about $900). But the Marina Administration would then sublease the slip for that year to the next person on the waiting list. I can't sublease the slip myself, and anyone who keeps a boat in their leased slip has to show proof that they are on the title/registration of the boat.

The reason why I kept the slip (into my fourth year having it subleased) is because if I let go of it, I'll never get another slip there because of the waiting list, and I thought I MIGHT like to get a small sailboat for the Wednesday Night races.

Well this year I volunteered to crew on Wednesday nights on a guy's Ranger 26 who is on a year-to-year sublease at the marine. so there's no guarantee he'll have a slip next year or the next. He and I seem to get along pretty well, and now I'm considering offering to "buy in" to his boat, if he wished, which would put my name on the registration, guaranteeing him a slip every year. Originally I wanted to buy my own Catalina 22 because we have a one-design fleet, but my wife isn't crazy about me buying another toy.

But am I considering something I should leave alone? Would liability insurance make it so complicated that it's not worth it? I mean, I would ONLY want to use the boat for the Wednesday Night races. So what would happen if he's out with his friends some other time and has an incident in which insurance claims are made? Since I'd be named on the registration, would I be responsible, liable to be sued, whatever? Seems like it shouldn't be so difficult, but in today's litigious society it gives me concern.
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post #2 of 9 Old 07-29-2016
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Re: Feasibility of shared "ownership?"

You can sue a ham, sandwich if you want. Read your homeowners insurance policy. My umbrella liability covers sailboats owned by me up to 26 foot for no extra cost. If you are covered for liability, then they should defend you and pay off any claim against you, regardless. But I think obviously you have to discuss it with an agent.

As for the partnership; in the early 2000's I went partners on a 31 foot sailboat with a dear friend. Issues arose; we had different views of how far we could sail. He wanted to stay in the river, I wanted to get out to the sound. Also he liked to park the boat at a bar and pick up women. I was married and just wanted to sail. If I said I was taking the boat out on the sound he would come up with a list of things I had to replace and repair. Things like a new main sail. $$$ . This difference proved insurmountable after a couple of years. So I think you need to discuss in detail and make sure you both share the same vision for what the boat will be used for. At that time we had the boat owned by a corporation of his. Our friendship was and is rock solid so I never had to worry about my money.

I got out of the partnership after 2 years. ( and we stayed good friends) Ironically he only sailed her another year and then let her rot in a yard where she was scrapped. I did offer to take her back for free and just pay to keep her and dock her and he would have unlimited use - but he said no dice as he wanted the money. But by then she was worth very little and he really wanted out 100%. Also he was going through a nasty divorce. So you need to study the marital status of your partner as well. It gets complicated.

I now have my own Cat 22 and sail how and where I want and it is much better.
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Last edited by Sal Paradise; 07-29-2016 at 10:21 AM.
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post #3 of 9 Old 07-29-2016 Thread Starter
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Re: Feasibility of shared "ownership?"

Thanks Sal, great point with regards to talking to my agent. And thanks for the insight on the issues which arose in your own situation. It certainly provides food for thought. My "partial ownership" with his boat would really only be on paper, as it is required if he would keep his boat in my slip. I would still consider the boat as his, as the only reason I am considering this is to allow him to use my slip, and thereby protect my ability to continue my Wednesday night races. And if I don't have to outright "own" my own second sailboat, my wife would be much happier.

On the other hand, he may not be agreeable to my idea at all, but I just wanted to have thought of everything before I bring up the subject with him, if I ever do.
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post #4 of 9 Old 07-29-2016
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Re: Feasibility of shared "ownership?"

To me the potential problems of a partnership outweigh the costs of owning half a small boat.

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post #5 of 9 Old 07-29-2016
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Re: Feasibility of shared "ownership?"

I have only been "partners" in one endeavor and it was a good relationship. I don't think I would ever buy "share" in anything else due to the multitude of issues that will arise due to the myriad of decisions that will never be considered before you are in too deep.
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post #6 of 9 Old 07-30-2016
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Re: Feasibility of shared "ownership?"

As it's often said; "The very worst ship is a partnership" and with a pleasure boat it's certainly the rule.

In my experience it never works very well, and nearly always one buys the other out. I'd rather lend my boat to a friend than have them as a part owner.
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post #7 of 9 Old 07-30-2016
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Re: Feasibility of shared "ownership?"

Going to argue the other side. Had a friend who was also a doc with a call schedule.

He got the boat when I was on call and I did when he was on cal. We alternated weekends withe call schedule in mind. Whoever was assigned the boat could invite the other at his discretion. We set up a simple corporation It had its own checkbook and allowed a wall to liability exposure. The boat was used for entertainment and occasionally charity functions. We paid 50/50 into it and it was fully compliant to law and tax codes.

We did this through 2'-itis and three progressively bigger boats. It was great to have another set of hands for fixing stuff and maintenance chores. It was great to have built in crew who knew the boat as we would occasionally go cruising together or do a Bermuda. It made it possible for us both to have a better boat than either of us could otherwise afford as we brought up our kids. We shifted gears. He got a hank Hinckley Ocean 38' and I bought a used small one off built for a OSTAR. We remained friends until his death.

If you are working and won't use the boat a lot or every weekend boat partnerships may make great sense. But it's like a marriage. Totally depends on who the partners are.

Would note as a kid was one of 5 partners in a J boat. For a race boat partnerships may also make good sense/cents.

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post #8 of 9 Old 07-31-2016
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Re: Feasibility of shared "ownership?"

I think it's easy to over-think these things, and miss out on opportunities in the process. I see two areas of risk here, both quite manageable: liability, and financial entanglements.

For the first (and here's where many people tend to over-think), I would simply buy suitable liability insurance and not worry about it. Your situation doesn't seem to me to be any different from any other boat ownership in terms of liability risk. Even as the sole owner of a boat, a person could be held responsible for something that happens when he is not there. That's what insurance is for. It's so easy to come up with horror stories about people being financially ruined by a ridiculous lawsuit, but it's also easy to find true tales of horrible accidents on escalators and merry-go-rounds. In my view, one should take responsible precautions while continuing to live life.

Regarding financial entanglements, I would approach this in a way that would enable you to write off your whole financial involvement should the worst case arise. It doesn't sound like you are talking about partnering in a major debt or long-term financial obligation. But I do disagree with something you said, that you would be the owner "on paper only." If the marina needs to see that you are an owner, and you oblige by getting your name on the title, then you are in fact an owner in every sense of the word. I would advise writing up a simple agreement (no need for a lawyer, in my opinion; see first paragraph) outlining the fraction of ownership agreed to, some basic use and maintenance sharing provisions, and a provision for terminating the partnership if one party wants out. From the situation you describe, it might make sense for you to buy your share of the boat for $1, and agree to pay half of the cost of the slip.

This could be a win-win. Good luck!

Last edited by scratchee; 07-31-2016 at 01:43 PM.
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post #9 of 9 Old 07-31-2016 Thread Starter
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Re: Feasibility of shared "ownership?"

Thanks All! Scratchee, very good response, and I think you hit the nail on the head.
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