The Bareboat Charter -
Ever wonder why there are so many boats listed on a website with a maximum guest capacity of 12? Even when it is a gigantic yacht? There is a good chance it is because the boat is an Uninspected Passenger Vessel (UPV). When you rent this type of boat, it must be done as a bareboat charter.
The USCG states that a bareboat charter is when a boat owner rents out their vessel without providing a crew. The person leasing the boat is fully responsible for operating it, including managing the crew and all aspects of the boat’s operation during the rental period.
To ensure the agreement is a bareboat charter, certain factors must be met:
Full control by the charterer: The charterer must be able to select and hire the crew and have the final say in how the boat is operated.
Responsibility: The charterer must take on responsibilities like providing food, fuel, insurance, and paying all expenses.
No ownership interference: The boat owner cannot be on board or dictate how the boat is run.
Classifying the boat as a bareboat carter versus a passenger vessel impacts the legal responsibilities of both the owner and charterer, including insurance, safety requirements, and whether a licensed captain is necessary.
Bottom line: for a bareboat charter to be valid, the charterer must have full control over the vessel without interference from the owner. If not, the vessel may be classified as a passenger vessel, requiring a licensed captain and an inspection by the USCG.
As you can probably guess, the rise of boat-sharing platforms, similar to how Airbnb revolutionized the rental market for homes, is creating issues with these regulations. With boat-sharing platforms, anyone can list a boat—whether it’s a professional operation or a casual boat owner.
In the past, the bareboat charter was used as a loophole to avoid USCG inspections and still be able to go out with between 6 and 12 passengers. Boat owners would captain the boat or have a friend or relative captain the boat while they stayed on as the crew. This argument was always a little murkey until the USCG clarified the rule of “full possession and control of the vessel” in a June 2017 news release.
This news release cited two examples of non-compliance:
- The customer selects the owner of the vessel as the crew. In this case, full possession and control of the vessel has presumptively not been passed to the customer.
- The customer selects a crew, other than the owner, and the owner or agent pays the crew, selects the crew, or has the authority to dismiss the crew for cause. In this case, full possession and control of the vessel has presumptively not been passed to the customer.
So if you decide to charter an uninspected boat, understand the task you are taking on. You do not want your celebration boat ride interrupted by the USCG. Or even worse, get towed back to the dock.