Boat partnerships and boat syndicates
Why is boat share growing in popularity and what are the advantages and pitfalls? We explain how boat partnerships and syndicates work.
Sometimes buying a boat is better shared and partnerships and syndicates can offer a great, cost and time-effective solution. Sharing a boat enables all the benefits of boat ownership to be enjoyed, without the major impact on time and finances that doing so usually entails. Given that most vessels spend the majority of their life unused and just sitting on their mooring, it is perhaps surprising that shared ownership is not more common. Slicing maybe three-quarters off the price of buying and running a boat makes owning a decent model affordable and cuts the cost of even the most expensive marinas down to a palatable sum.
Sharing is also ideal for those who'd like a boat, but know they realistically don't have enough time to use one to justify full ownership. It also works for those who want to take part in a number of different types of sailing, perhaps dinghies at a local club, competitive sportsboat racing, and a more cruising-oriented yacht for family sailing. Another advantage is that unexpected expenditure can be less painful – for instance at around £5,000, re-engining a 35ft yacht will blow a big hole in any individual’s budget, but is more palatable if shared.
Don’t be put off by the common myths about sharing boats. These usually concern unsuccessful syndicates with poorly maintained boats and friendships torn apart. While there are undoubtedly some syndicates that go wrong, most are successful, with well maintained boats whose owners get more time afloat than many who own their boat outright.
Your own attitude is potentially the biggest single factor in determining whether sharing a boat will work. If you have fixed ideas as to exactly what kit the boat should have, resent having to pay your share of additional items your partners want, or feel that you've been wronged if one person is not able to complete their allocated share of maintenance on a particular weekend, there's a high chance it won't work for you.
On the other hand if you approach, for example a quarter share, from the standpoint that you have a great boat for a quarter of its market price, pay less than one-third of the running costs you would incur if you owned it outright, and are responsible for organising a lot less than half the maintenance, you’re probably on to a winner.
As with all partnerships, communication is the key to success. However, in the euphoria that goes with buying a boat it's very easy for all parties to assume they are thinking along the same lines, when that is far from the reality of the situation. Start by establishing what your prospective partners want from the syndicate. For some, sharing a boat is an easy way to have crew on tap – a perfectly valid reason in itself – but if you want sole use of the vessel on a time-share basis you could be talking to the wrong people.
Another vital consideration is the group's attitude to maintenance. If you're the kind of person who hates DIY, wants to maximise time afloat, and would always pay a boat yard to do all the maintenance, a partnership with someone who gets as much enjoyment spending time working on the boat during a long annual lay-up as from sailing is unlikely to work.
Other questions to consider include how unexpected bills are treated and procedures for re-assigning usage if the boat is out of action for unexpected repairs. Where the boat is to be kept is also important – will it be in a full service marina, or on a cheap mooring with no local facilities?
The syndicate or partnership agreement
A proper drawn-up agreement is crucial, even for boats shared within families, and forces all parties to consider every aspect of how the boat will run and be operated. As well as setting out each owner’s legal interest, the contract should define his/her responsibilities towards the vessel and share of expenses. It should also cover each partner’s rights to usage. The RYA has a standard agreement for shared ownership that's available free to members.
Another necessity is to set out what happens when one member wants to sell their share. Typically, the other partners have first refusal, enabling perhaps three remaining owners to increase from quarter-shares to third-shares, for instance, or one partner to take a half-share. If no partner wishes to increase their holding then the share might be offered on the open market, with the remaining owners given right of veto over a prospective purchaser they dislike (for valid reason), or the whole boat put up for sale.
It's also important that the syndicate has at least one formal annual meeting to discuss problems of the last season and plans/wishes for the following one, as well as maintenance and replacement of gear.
What’s the best size of share in a boat?
Few yachts owned by individuals are used for more than one weekend per month, plus a fortnight’s summer cruise. On this basis, a quarter share would suffice for many owners, and a large number work successfully on this basis.
On the minus side, with sharing you loose flexibility. If you have an unavoidable commitment on one of your allocated weekends – maybe a wedding – it should be possible to swap dates with another partner. But with a quarter share, if the weather’s bad for your weekend you can’t postpone until the following one. Similarly, you also can’t make a last-minute decision to use the boat if the forecast is particularly good. A half share, however, would give some flexibility in this respect.
In general, shares of less than one-quarter are unlikely to work well for keen owners, unless some of them tend to sail together, or at least one of the parties mostly uses the boat mid-week. However, one instance in which smaller shares – perhaps as little as one-eighth – can work is with boats kept abroad, as each partner’s usage is then less dependent on the number of weekends available – you’re each more likely to want a fortnight, a week, and perhaps a handful of long weekends.
There are also fractional ownership clubs and organisations which might offer an alternative to buying privately, you can read more about boat membership schemes here.