Leasing a berth in the med

[MikeA]

I'm trying to work out the pros and cons of purchasing a lease for a berth in the med. I rent a berth in Mallorca but fancy a change of location. When looking around the marinas in Mallorca last year, there didn't appear to be that many long term rental berths available. I'd like to reduce my berthing costs if possible (currently around 18K euros for a 12m berth).

I've been offered a 15m berth at Club de Mar in Palma which has a concession until Oct 19. The costs would work out at slightly less than what I'm currently paying but more expensive than a direct rental from the Marina. The bonus is that it comes with storage space. Here's the rub, rather than owning the lease, as far as I can tell, I would own 2 shares in a Spanish company which owns the lease until Oct 2019, at the general enquiry stage, I've no idea what percentage of the overall shareholding that represents but probably safe to assume less than 50%! There's an upfront cost for the berth plus a premium of 5K for intial 'membership' of the 'club' (perhaps somebody's commission!). My gut tells me to look elsewhere, I don't have all the information yet, but I suspect the 3.8K variable per annum for the service charge is not paid directly to the marina but to the 'club/company' who then pay the marina. I've no idea whether there is any contractual obligation for the club to keep the variable annual costs to its members in line with what the marina charge, so that makes me nervous. Of course, all of the paperwork will be in Spanish and way beyond my vocabulary of 1/2 a dozen words, so finding a reliable lawyer/notary will also be a challenge but that will be a given with any lease I consider.

Should I run a mile, or is this kind of arrangement not unusual for those buying into a existing lease rather than getting in at the build/early days stage?

My other concern, is what happens when the concession ends? Will I be in as strong a position as I would have been if I'd owned the lease. I see leases often get extended, but have no idea how that works in practice, does it work out as expensive as purchasing a new lease or are there some concessions made for existing leaseholders? I suspect in the case of the club, even if there is some sort of cut price deal to extend the lease for 5 years or whatever, as a member rather than the leaseholder, the deal offered could be a lot different from what the leaseholders are offered.

Putting the 'club' deal to one side, I've read on one of the berth broker websites that the norm is for the leaseholder to have no right to let the berth when not in use, in fact the website article states it is common for there to be a clause which allows the marina to let the berth once empty for say, 30 days and to keep all of the rental income but making the berth vacated as and when the leaseholder wants to put their own boat back on there. Is the article accurate? There seems to be a lot of rental berths available from private individuals/brokers for that to be the case. I'm not looking at this as a financial investment (would need some serious man-maths for that) but situations can change, I may purchase a bigger boat or it's possible I may even have to sell the boat, who knows?, so the right to let would be a worthwhile option especially if I look at much longer term leases.

Apologies, lots of questions and I know the obvious answer would be "without seeing the contract it's impossible to provide answers" but I'd appreciate some general feedback from anyone who owns a lease or has some knowledge of the subject before I commit to spending on legal fees etc.

TIA
Mike

 

[julians]

I own a lease in Port Adriano, the setup you describe using companies etc is not how mine works. I own the actual lease,I pay the annual maintenance charge directly to the marina. I bought it approx 10 years ago, but I can't remember whether I bought it from a private individual or from the marina directly. At the time I bought it the marina has been in existence for 20 years or more

With regards to the right to 'sub let' it,not sure what my contract states, I can have a look later on and let you know.

I bought it for the following reasons:-

-Certainty over my mooring costs for the life of the lease,ie not subject to the vagaries of exchange rate fluctuation,or the whim of the Marina to increase the cost. As it happens the cost increases of annual rental and the decline in strength of the pound now make what I paid look very good value.
- No hassle each year potentially having to find a new berth.

 

[MikeA]

Thanks for replying. Adriano has been through a major modernisation period, so perhaps issued new leases around that time to finance the expansion. Would be interested in your right to let conditions.

I'm pretty sure I won't be taking my enquiry into the above berth any further but am still keen to gain as much knowledge of the lease market as possible. My reasons to purchase are similar to your own, I suspect annual letting fees will only rise, so finding a lease where the overall cost is similar to the number of years left x the current annual cost inc maintenance/service charge, will likely result in a saving over the duration of the lease. I am a little concerned about being tied to one place but if there's the option to let it out or at least sell it without the need for the sale to be controlled by a management company, that's not a show stopper.

 

[KINGFISHER 9]

I've got two leased berths here in St.Cyprien Marina in France ... a 10 metre which I paid €25k for a 30 year lease and a 12 metre which I also paid €25k for a 29 year lease.

 

[MikeA]

That's sounds great value, do you have the right to let? What's the berthing situation like in StCyp? Similar to the eastern end or does there to tend to be availability?

 

[KINGFISHER 9]

I can sub lease the 10 metre one ... I've got my other boat on the 12 metre. Brought a 10 metre boat down here last year then decided it wasn't big enough! (it's for sale along with the berth, or separate) Currently got a 40 footer on a 12 metre berth and no plans to go bigger! Like pretty much everywhere berths are like gold dust ... that's what everyone tells me but I still see the marina advertising them at all sizes! My 2 are pontoon berths down the quiet end if you look at the map on the website. Leasing is the way to go ... long leases are always saleable. Good place to keep a boat and plenty of places to explore going South.