Yacht Partnerships--Do They Work?

Christian Williams

E381 - Los Angeles
Moderator
Blogs Author
Many forum inquiries from potential Ericson owners focus rightly on size, initial cost, renovation and upkeep.

The numbers are indeed daunting, and experienced hands often shudder at the prospect of a young skipper with kids and a dog and a demanding job taking on a bargain boat--or any boat.

But partnerships can work. I've been in two. The first was a 25-foot Hunter in the 1970s at a time when I was traveling a lot, usually overextended, and a young father. I had one partner, then eventually two. The partners were equally busy and with competing financial commitments. We sailed together when we could -- we always had each other as ready crew. I hadn't known either guy before, we had little in common--and never had an argument. We split costs and enjoyed the deal for almost seven years. Neither could sail when they started and ended up fully experienced.

I campaigned a Soling with Larry Brodie for five years. Racing is very expensive--new sails and demands of time. We practiced or raced almost every weekend in Annapolis then, in a competitive fleet with two Olympians. I could never have done it without a partner to share the expenses, training and logistics. We (almost) never had an argument.

Are partnerships insufficiently considered by potential boatowners? I've always thought so. All it takes is a cup of coffee for a couple of strangers to know whether it makes sense to share a boat neither could afford alone.
 

Sailingfun

Member I
I tried it one time with my old Nordhavn. It didn't work at all. Ended a really good friendship over cost, money and use time. I would never try again so my suggestion does not tried it if you want a healthy boat relationship
 

steven

Member III
I was in a very successful partnership on one of my prior boats with a good friend.

- made pre-agreed monthly payments into account, which was used for all boat expenses.
- agreed on a list of priorities for expenses including non recurring and contingency expenses
- drew up a schedule of use including weekends an holidays (which we adjusted from time to time).
- procedure for dissolution of the partnership

wrote it all down.

Eventually I needed to exist and that went very smoothly following the agreed breakup procedure (partner bought me out using pre-agreed pricing formula; he had the option to instead request sale and then we would have split the net sale and anything eft over in the account).

--Steve
 

Tin Kicker

Member III
I've been in really good airplane partnerships but also lost a good friend to a jointly owned boat. The more structure in the rules and a formal way to book usage the better. Like trying to teaching a wife/GF to drive, I think it works better with strangers or acquaintances.
 

kapnkd

kapnkd
I was in a very successful partnership on one of my prior boats with a good friend.

- made pre-agreed monthly payments into account, which was used for all boat expenses.
- agreed on a list of priorities for expenses including non recurring and contingency expenses
- drew up a schedule of use including weekends an holidays (which we adjusted from time to time).
- procedure for dissolution of the partnership

wrote it all down.

Eventually I needed to exist and that went very smoothly following the agreed breakup procedure (partner bought me out using pre-agreed pricing formula; he had the option to instead request sale and then we would have split the net sale and anything eft over in the account).

--Steve
You did it correctly! I’ve witnessed a couple partnership deals go south and with resulting bitter feelings on both sides. ...One of them was sadly between brothers.

I created a partnership with my son early on as soon as he learned to write his name. Think he was about 5 years old. We came out of the county clerks office and he anxiously asked, “Daddy, which half of the boat is mine?” ...My fast thinking reply was simply, “The broken half.”

All kidding aside, this is perhaps the only partnership that worked I’ve ever seen. It proved to be a great bonding tool for us over the years. He developed a strong interest in the boat and care for her with that sense of real ownership and a vested interest.
 

Mark David

Junior Member
I am lucky enough to be on the other side of a similar partnership or 'syndicate' as we kiddingly refer to it. Five years ago I bought the family boat and entered into a partnership with my 83 year old Father...BY FAR THE BEST DEAL I HAVE EVER BEEN INVOLVED WITH!!
 

Christian Williams

E381 - Los Angeles
Moderator
Blogs Author
When my first partnership formed I had just done a profile of James Webb. He ran NASA in a triumvirate with two others. They had hundreds of thousands of people reporting to them and big personalities. How did three guys come to agree on anything? Webb said they agreed that if any one of them felt strongly about an issue, the others would yield and support him. Therefore "we bound ourselves with iron chains." Webb was celebrated as a brilliant administrator, so I took his model.

We had no formal contracts, because that invites legalise and fine distinctions. We had a use allocation by which the weekends were assigned in turn for the coming year, and owners were to give notice if they needed the boat for, say, a two-week cruise.

Every time I asked to use the boat on somebody else's weekend they said "Great! Can I come?"

The experience taught me that sailboats don't get used enough--especially by people with jobs, kids and wives who play golf (not mine).
 

JSM

Member III
My first boat was a partnership with a buddy that I had grown up with. We purchased a used C&C 30 with a five year balloon payment loan. The first five years went (somewhat) smoothly and we managed to make the balloon payment at the end of year five.
Year six partner partner falls in love with a woman who turns green at the mention of sailing and he decides that since he's not sailing anymore he's not paying either. His payments into the joint checking account stop and he and his new love fall off the map.
The months pass and one day I get a call from my buddy informing me that his girlfriend is pregnant , they're getting married and buying a house and could I please write him a check for his half of the boat.
My new bride an I ended up buying him out at at very reasonable price and sailed the boat for another twenty five years .
Needless to say the deal put a strain on our relationship but we're still friends to this day.
The only way that I would get anywhere near a partnership on a boat now would be a timeshare / fractional ownership type arangement if and when I'm no longer willing or able to maintain my own boat.
 
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K2MSmith

Member II
I currently have a Sailtime membership which could probably best be described as a "Limited Timeshare Agreement". You basically are leasing a boat for a period of time and share it with 7 other members. The members and boat are fixed (unless a member or boat leaves the agreement) . It's basically treated as "your boat" while you are sailing it. In my case, the agreement has worked very well for us. The operator has nice reservation app and you are given an allocation of time per month you can use the boat. If there is free time available and nobody is using the boat, you can reserve it for no cost to your allocation if you reserve within 48 hours.

Although it works well for us in this particular case, I realize it's not for everyone. If you want access to your boat anytime for any period of time, you don't have that flexibility. Also even though you are leasing the boat and "it's your boat" while you use it , you can't make any modifications to it.

The success of the partnership in this case is well thought out agreement and a good operator. In our case, the operator/owner is outstanding.

I'm actually looking for another boat (as you have seen from my other posts) for other reasons (like I want to single-hand race in the bay etc.) but if you have any questions about my agreement would be happy to answer, please PM me. I'm not affiliated with the company - just a member.
 

steven

Member III
If I were creating a private partnership today, I would look at a time share membership contract and see if it could be adapted. Also, by the way, my boat partner and I considered if we wanted our agreement to be a legal document, including the possibility of forming a corporation to hold the boat. We decided that was overkill. But if we had taken in a third partner (a possibility at the time) it might have made sense. Three is way more ccomplicated than 2.
 

K2MSmith

Member II
If I were creating a private partnership today, I would look at a time share membership contract and see if it could be adapted. Also, by the way, my boat partner and I considered if we wanted our agreement to be a legal document, including the possibility of forming a corporation to hold the boat. We decided that was overkill. But if we had taken in a third partner (a possibility at the time) it might have made sense. Three is way more ccomplicated than 2.
I think it really depends on the partners involved and to a certain extent the value of the asset. It sounds like maybe you find an idea partner which is not always easy to find...

I'm also in gen aviation and know of airplane partnerships with various degrees of formality. I would lean towards some kind of written agreement. The best of friends can turn sour on each other if there is a miscommunication or misunderstanding. Writing those terms down can help keep that clear. my 2 cents...
 

1911tex

Member III
Another 2 cents or freebe, your choice. I was also in an airplane partnership and a club long ago...all written as a contractual arrangement. I cannot stand partnerships for two reasons...I am particularly anal and possessive and will spend hours doing things no one else wanted to do... and keeping everything "ship" shape. Most partners that I had as the old saying goes, just ride 'em hard and put 'em away wet. An example...during annuals, I would work along side with the A&E/P making sure all the t's are crossed and i's dotted. Mechanics actually appreciated the assistance. No one else cared, other than sharing costs. The sheriffs dept. where I worked hired me a chief pilot for that reason. Others I know are very satisfied with partnerships. Just a personal observation.
 
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K2MSmith

Member II
. Certainly for a pilot, i think it's requirement to have a partner who is thorough and detail-oriented (without being obnoxious). That would be on the top of my list if I was talking to partners.
 

Tin Kicker

Member III
Another 2 cents or freebe, your choice. I was also in an airplane partnership and a club long ago...all written as a contractual arrangement. I cannot stand partnerships for two reasons...I am particularly anal and possessive and will spend hours doing things no one else wanted to do... and keeping everything "ship" shape. Most partners that I had as the old saying goes, just ride 'em hard and put 'em away wet. An example...during annuals, I would work along side with the A&E/P making sure all the t's are crossed and i's dotted. Mechanics actually appreciated the assistance. No one else cared, other than sharing costs. The sheriffs dept. where I worked hired me a chief pilot for that reason. Others I know are very satisfied with partnerships. Just a personal observation.
Being the A&P in clubs was one reason I wanted out and started flipping airplanes. In the club was being like a hooker, in knowing what people wanted and so many getting either pushy or unhappy when they called and I had other things going on.
 
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