Syndicates/Shares, tips and experiences

[CM74]

I'm thinking of selling a half-share of my boat, and I'd be interested to hear of people's experiences of selling off shares, especially how the finances tend to be worked out. And as a little common sense check of my ideas too!

I'm considering it because (like many people) my boat spends a lot of its time not going anywhere.
My situation is a little different as I work away on rotation so there's a few weeks at a time when even in glorious sailing weather, I'm not around to take advantage of it. It would give the advantage to a potential 2nd owner that they would be guaranteed use of it half of the time at least.
Unlike most shares I've seen though, it's not a big or particularly valuable boat, or in an exotic location.

How do people usually work out the ongoing berthing, maintenance and running costs? I'm guessing a monthly payment into a shared pot? Berthing is fairly predictable, and I'd guess building up a decent pot of money to deal with any needed repairs is a very good idea.
But how does it account for everyday, DIY maintenance?

How do people tend to allocate their "weeks"?
My idea would be to have rotating "first choice" weeks, with the option to book in your "off " weeks as well if the other one doesn't want to sail.

My only experience of shares has been my Dad, who has had shares in a few light aircraft over the years. Generally it's worked fairly well.
They buy their share, then pay a monthly fee to build up a pot to cover the ongoing maintenance costs, as well as an hourly rate when actually flying.
With aircraft it's a little different though as fuel is a large percentage of the hourly running cost, and the maintenance is strictly hours & time based and has to be done professionally. It's almost the polar opposite to sailing boats where fuel burn is pretty low, and maintenance is a lot more debatable about what needs doing (and DIY vs professional cost).

Are there any particular legal pitfalls?
Eg. Insurance - as everyone sharing is a part owner, do they each need to arrange their own insurance? Or does one arrange it, pay for it from the pot, then distribute any payout or shortfall among the members?

 

[Tranona]

You are thinking along the right lines. Suggest you look at the RYA guidance on shared ownership as it goes through the pros and cons of different arrangements rya.org.uk/e-news/inbrief/shared-boat-ownership As you see the details are available to members. On the specific insurance question the boat is insured as one but with both owners shown as having an interest reflecting the size of each share as shown on the Bill of Sale (if you are indeed selling part of the boat).

Most successful boat shares depend on the relationship between the co-owners and usually arise out of either a common interest (for example a syndicate owning a racing boat) a prior relationship or forming a partnership specifically to buy a boat. Finding someone to share in your circumstances from cold is not easy. When you do find a compatible partner then the actual details of how you share both the costs and usage will likely come out of discussion rather than fit a predetermined format . The key is that both parties should be happy - and in particular that there is an agreed "exit strategy".

Good luck.

 

[davidej]

I have shared boats (2) over 20 years with two different partners,.

No legal agreement, just lots of goodwill and we have never had a serious disagreement.

But we had wifes that weren’t very keen so we often sailed together.

 

[CM74]

Thanks both for your replies,

(if you are indeed selling part of the boat).

...

and in particular that there is an agreed "exit strategy".

My intention is definitely to sell part of the boat (50%) as I understand it, this would make co-ownership clear, and avoid any issues around it possibly being considered chartering, coding requirements, insurance complications, etc etc.
For an exit strategy, the plan would be to make it clear that either owner is free to sell their share on to someone else.

I have shared boats (2) over 20 years with two different partners,.

No legal agreement, just lots of goodwill and we have never had a serious disagreement.

But we had wifes that weren’t very keen so we often sailed together.

I'm not sure I would want to do it without some sort of paperwork - even if just for the reason that if I was to buy a part share, I'd expect to get some sort of agreement proving that I own part and what my responsibilities & liabilities are.
It's good to hear some positive experiences!

FWIW in this case it's a boat worth about £3k so it's not involving mega money at least.

 

[ylop]

I looked at shares when I was buying - in many regards it would have made more sense. I'd not have fancied buying into someone else's boat as the first sharer (unless I knew them well already), as it would feel (to me) like we weren't really equal parties and I'd be paranoid about any scratch etc on "your" boat. Technically that may not be a valid argument but perception is important so if I am not unique your market is diluted.

My idea would be to have rotating "first choice" weeks, with the option to book in your "off " weeks as well if the other one doesn't want to sail.

If its only two owners I think you are probably over thinking it. But have you considered the possibility that your first choice weeks are mostly when you are working and you get to use the boat less than now?

Whats your annual running costs? For a £3k boat you aren't trying to attract someone with the initial capital cost; most people who could afford £1.5k for half a boat could come up with £3k to own outright. Unless you are in an expensive but amazing location I wonder if 50% of the running costs is attractive to a buyer either; if you can only afford that what happens for an unexpected major repair? if you could afford it all why not have the 100% flexibility/convenience? or if you want to do it "cheaper" why not look for cheaper mooring etc. If you've got the cash but only want to sail a few weeks a year - charter, you can go different places, sail different boats etc.

I think boat shares are a really good idea. But to me it either allows you to purchase a boat you could otherwise not afford/justify OR lets several people share it in a location that's too inconvenient for frequent use by any one of them (and presumably is very good sailing when you are there). The other time it makes sense to me are when its a pre-existing group of friends or if its a very special set up like Brighton Belle.

 

[davidej]

I don’t think leaving an outgoing partner to sell to anyone would work. If the remaining partner is not happy with the third party, then the boat should be sold and the proceeds split.

I think my partnerships have worked because we sail together almost as much as we do separately.

 

[Tranona]

Thanks both for your replies,


My intention is definitely to sell part of the boat (50%) as I understand it, this would make co-ownership clear, and avoid any issues around it possibly being considered chartering, coding requirements, insurance complications, etc etc.
For an exit strategy, the plan would be to make it clear that either owner is free to sell their share on to someone else.


I'm not sure I would want to do it without some sort of paperwork - even if just for the reason that if I was to buy a part share, I'd expect to get some sort of agreement proving that I own part and what my responsibilities & liabilities are.
It's good to hear some positive experiences!

FWIW in this case it's a boat worth about £3k so it's not involving mega money at least.

TBH doubt you would get anybody interested in buying a share of such a low value boat and take half the running costs. This sounds more like an informal arrangement with a mate settled over a pint.

 

[superheat6k]

My first and indeed a fairly basic boat (Ballerina 22) was a share between three of us, which we carried on to a second boat (Sabre 27). However, it was also my hobby, so I quite happily took on the donkey element, so they really became my babies.

I used to always prioritise the others preferred usage dates, and indeed this worked very well.

I kept a simple spreadsheet of expenditures with everything split three ways - very cheap boating.

The arrangement lasted for some 4 seasons, before we ended the arrangement perfectly amicably, especially as we each walked with slightly more than our entire expenditures over the 4 seasons (excluding berthing fees).

There was no legal agreement, just Gentlemen acting as Gentlemen.