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How To Make Co-Owning A Boat Work

These boating buddies split the costs of upkeep and share captain duties — and still maintain a close friendship after 25 years.

Robert Ferraro and Tim Hurley

Robert Ferraro (right) and Tim Hurley together purchased a 1984 Beneteau First 32 in 2001. They continue to split the costs of co-owning the boat.

My friend Tim and I have been boating partners and co-owners for more than a quarter century. Our first boat was a 1967 26-foot Excalibur that we owned for a decade, before selling her and buying Calypso, our current 1984 Beneteau First 32, which we bought in 2001. Our tried-and-true arrangement may not work for everyone, but for us it's been the solution to cutting the cost of boating in half. As a bonus, the power of two can make the ongoing work of boat maintenance more manageable. There are lots of caveats for those considering a maritime marriage, so here are some things to consider before tying the knot, based on our experience.

Choose Your Shipmate Wisely

This is a fundamental of life, right? I firmly believe you want a boating partnership of complementary, not necessarily similar, personalities. Your partner would have skills and interests you don't. Is one partner more athletic and physical than the other? Great! He goes up the mast, and you make sure he does it safely. Are you a gadget guy and he's all thumbs? Super! You take care of the electronics and let him do the brightwork. He likes adventure and exploration, and you like simply racing the buoys? Perfect! He'll get you to expand your horizons, and you'll get him to crew your races. You get the idea.

A boating partnership can be a two-headed monster. A boat with two captains sounds like a recipe for disaster, and it will be if you can't reach consensus with respect, humor, and speed. So unless you are truly apprehensive, or totally opposed to a partner's proposal, once you've stated your position, it's better to go along to get along. Remember, just as when arguing with a spouse, all victories are pyrrhic; you might win the decision only to end up sleeping in the garage. There is always only one captain on the boat at a time; we just agree when to hand over the helm. Get it in writing?

We did consider putting our partnership in writing, as any good lawyer would advise. But we were close friends for 10 years before we became boat-owning partners, and our handshake partnership is just a solid as the day we started. That said, I think it's a good idea for most people to iron everything out in writing in advance.

Most negatives I hear about partners is when there is more than two. When three or four people decide to go into partnership, that's when I think you face the most likelihood of trouble. The more people involved, the greater the risks, and the fewer the rewards.

Show Me The Money

Keep exact accounts. This is not about honesty; if you can't trust your partner over money, don't even think about getting a boat together. Rather, the issue is for you to know what this little sport is costing you. Also, you have to be sensitive to the size of your partner's purse. If you want to spring for a new color chartplotter and his daughter is about to get married, the plotter might have to wait.

Robert and Tim at the helm

We split the cost of our boat ($28,000, long since paid off) and keep a running tab of ordinary expenses in an Excel spreadsheet, which we usually settle up about twice a year (more frequently if there's a large expenditure). Costs are strictly shared 50/50, and agreement is reached prior to making any even moderately expensive purchases. Most of the physical work of maintenance, cleaning and painting, we do together.

We're both registered owners of Calypso. The boat's sales tax liability was split, as was the purchase price, and we also split the write-off for the mortgage as a second home until the loan was paid off. All premiums for insurance (currently through BoatUS) and fees for state and federal registrations are toted up and paid jointly.

Unfortunately we have had the need to make an insurance claim, but the insurance money went back into the boat. As for the liabilities, as with any general partnership, we both may be liable for whatever happens on the boat regardless of who is at fault. It is a reality that if I do something stupid, Tim could share the liability, and vice versa, but we accept the possibility. We trust each other's skills, and if something bad happens on or to the boat because of Tim, I know it could just as easily have been me.

Master And Commander

One reason you go boating is because you want to test yourself and your boat, improve your skills, and make her perform well under your command. You can't do that unless you take the wheel or tiller, make decisions, trim the sails. Having a partner doesn't mean you give up command; it means you have to share it. "I'll do the start and first leg. You take it from there." Or, "You take us out and I'll take her back."

If you even get a hint that your partner wants the wheel (maybe he says, "Let me know when you want a break.") it's time to relinquish it. This could be a sticky situation for some, but for Tim and me, we're simply considerate of the other's need to have some fun or take a break. Planning longer journeys? Routes, times, and layovers are always done as a team.

Friends aboard

Spouses Rule — Period!

If Tim's better half wants to do something, discussion over! And, of course, vice versa. His wife hates the boat heeling more than 7 degrees? Then you sail flat. Save your rail-under days for another day.

Time Sharing

Who gets the boat this weekend? Tim and I like to sail together, so if we're both free, we'll usually go out together. But what happens if he wants to take friends out and not include me? Bye, bye! Have a great time. If I then have a weekend planned without Tim, fine. If not, that's fine, too. There's no tit for tat. Maybe the secret to our 25-year success is our personalities, but our experience has been overwhelmingly positive.

The Freedom NOT To Use The Boat

If I don't want to go out this weekend, I don't feel guilty because that expensive boat is sitting unused at her mooring. First, because I'm not spending as much money to keep her there; second, because it's probable that Tim will take her out. A partnership means a greater freedom to sail — and not to sail.

Calypso sailboat

Robert and Tim think they are the second owners of Calypso, which they share for both cruising and racing. "She loves 15 knots of wind but needs a reef at 18," Robert says. They sail her mainly throughout Long Island Sound and down to New York Harbor. Often Tim will take the wheel to start a race, while Robert will assume command at the finish line.

Future Plans?

We don't have a plan if one of us decides to sell. With our first boat, it was a mutual agreement to sell, split the proceeds, and invest in a new boat. In a sense we serve at the pleasure of each other. If one of us wants out, the partnership is over. I assume when the time comes we'll just sell Calypso and split the proceeds. We haven't discussed it yet, but I can't see Tim keeping the boat without me and vice versa, so I don't think a buyout is in the cards. We haven't discussed it because even though we're getting older, we still love boating!

A successful partnership requires good will, consideration, and honesty. In return you get someone with whom to share adventure, work, and costs. Our partnership is successful because we're really not a 50-50 relationship; each of us is 60-40 — for the other guy! By that I mean each of us is willing to do what the other desires, whether or not it's entirely what we want ourselves. That's made this a great deal.

Tips For Smooth Sailing

The partners in our story are fortunate to have had a strong, respectful friendship and smooth working relationship based on trust and complimentary skills. Not every partnership may be so well balanced. But that doesn't mean you can't make it work well.

No matter how friendly you are with your potential partner, a signed, written agreement between co-owners makes it easier to maintain a workable partnership, solve problems before they develop, provide guidelines, and establish a process to handle unforeseen events — important no matter the size and complexity of the boat. Here are some things to consider including in your agreement:

  • Decide when shared expenditures will be reviewed and reconciled between the partners during the season/year. Agree to always check with the other partner before making purchases/upgrades larger than required maintenance items.
  • Insurance policies should be in the name of both parties. Include how insurance payouts, liabilities, and sharing of recovery-upon-loss will be handled.
  • Decide which of the partners is to provide which prerequisite levels of care required by many insurance companies, and the recourse when one partner cannot (or does not) fulfill their side. Decide in advance who takes what steps and when, when a hurricane is forecast in your area.
  • Decide how to handle taxes, who will pay, and what happens if one partner cannot (or will not) pay his/her share.
  • Your written partnership will probably be based on the idea that you both hope to use the boat somewhat equally. But what if one partner wants to use it disproportionately more than the other? Figure out a reasonable-use arrangement in advance, including accommodating longer vacations, and also agree that you'll go back and forth and adjust together to accommodate the other whenever needed.
  • What about when one partner wants or needs to sell? Come up with a fair method to assess real sales value, plus establish a reasonable amount of time for one partner to buy out the other before putting the boat on the market. Address the fact that, if one partner must get out of the partnership for any reason, and the other cannot pay that partner out, that you agree in advance that you both will sell the boat.
  • Once the partners have put all caveats and guidelines in writing, have an attorney review it. He or she may suggest things you hadn't considered, such as owning the boat through a corporate entity.

— Bernadette Bernon

Author

Robert Ferraro

Contributor, BoatUS Magazine

Robert Ferraro, a lifelong New Yorker, has been fishing, boating, and sailing the waters of the Long Island Sound since childhood. The former ABC and NBC television news producer was commodore of the New York Athletic Club Yacht Club and a founder of South Street Seaport Museum.