# Long-term leasing of a sailboat



## Valiente (Jun 16, 2006)

I have what I suspect is an unusual situation, although not likely a unique one. I sail a '70s cruiser-racer on Lake Ontario of just over 33 feet LOA, and it's a bit of a hot rod. We are, however, close to buying an ocean passagemaker and intend to cruise "mid-life" for five years or so. The normal course of affairs would see me selling the current good old boat and buying a radar or something for the new one.

But I don't feel as if I'm "done" with the current boat. I think it's perfect for the Great Lakes and I want to keep it. While I could pay a farmer to have it tarped in a barn for years, I think that loaning it to a committed crew who would bear the cost of dockage and maintenance might be a better idea. They get a mid-sized boat for about $3,000/year in "carrying costs" (considerably less if they go on a mooring and take it out of Toronto) and I get it back when we return and sell the big metal cruiser that will make a great home but is very much overkill for a weekender boat.

Anyone ever hear of loaning/leasing their boat in order to keep it while they cruised on a different boat?


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## sailingdog (Mar 19, 2006)

Unless you already have a person in mind, and one that you trust completely, I would be hesitant to recommend this. Leasing a boat for five years, where you will not be able to check up on it, is fraught with many risks. The contract between you and the lessee would have to be very well thought out and very well written.

Would you be charging them for the use of the boat? It seems to me that you both would benefit by this arrangement, and that charging them would be somewhat counterproductive, especially if they are going to be bearing the costs of maintenance and dockage. 

It might be worth talking to a yatch management company, which could oversee such a lease, while you are cruising.


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## Valiente (Jun 16, 2006)

Unless you already have a person in mind, and one that you trust completely, I would be hesitant to recommend this. Leasing a boat for five years, where you will not be able to check up on it, is fraught with many risks. The contract between you and the lessee would have to be very well thought out and very well written.

_Yes, I understand this, which is why I am at the exploratory phase. The alternative is loaning it to my boating in-laws, but they might not want to spend even the carrying costs at this point, as they are aging and the season is shortish here._

Would you be charging them for the use of the boat?

_
Only a nominal "dollar a year" and the offer of a "first refusal" should I decide to sell partway through my trip or upon our return. Just enough to make the lease legal._

It seems to me that you both would benefit by this arrangement, and that charging them would be somewhat counterproductive, especially if they are going to be bearing the costs of maintenance and dockage.

_The idea is that they get five years' use of a $30,000 boat for $3,000/year, meaning they get to learn, to evaluate and to play extensively on something bigger and more spacious than a "starter boat", like a Shark or a 26 footer, without having to commit to either a new boat purchase or the purchase of an equivalently sized 25 year old C&C or similar, which would be $40,000 or better. My boat's a C&C design farmed out to another Canadian builder: it's actually built a little better than some C&Cs of the same age.
_

It might be worth talking to a yatch management company, which could oversee such a lease, while you are cruising.

_Thanks for the suggestions. I will be talking to a broker tomorrow as I wish to put down a deposit prior to survey of the next boat. If I can't find likely candidates, I'll either sell the boat, or mothball it. The only thing I know is that I can't keep two boats on the go. We aren't leaving until 2009, so I have a bit of time to figure out a scheme._


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## sailingdog (Mar 19, 2006)

Sounds like you've got the basics covered then... Might also want to look at talking to sailors in the Chicago and Michigan regions of the US as possible users of the boat.


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## hellosailor (Apr 11, 2006)

A little business can ruin a friendship. Do you have "vicarious liability" rules up there, i.e. if you are still the owner, can you be held liable for their actions? Who will carry the insurance? A dollar per year requires commercial insurance, not pleasure. 

Might be better to let them form a limited partnership, or whatever they please, and sell the boat outright to them for a dollar up front with a precondition that they can either make a balloon payment (the full value you agree on) at the end of five years, or allow you to buy the boat back for the same dollar. With a maintenance schedule made as part of the their "annual" installments.

Fertile ground for a sea lawyer who might be best aware of the risks up there, so the risks, termination options, annual requirements, etc. are all planned BEFORE you go into it. (If you can't agree on all that fine print going into it, you wouldnt be able to agree on the same things during your lease, either.)


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## foxglove (Dec 27, 2002)

*One more cheap source of info*

You might go to the Boat/US website and click on the Resources tab and go to "Ask the Experts". Tom Neale, who is also an attorney as well as an experieced cruiser, is listed among the experts. You have to be a member to use the service.

I once read an article by Tom about the legal aspects of buying a boat for charter. He might give you a better angle.

Max


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