A charter; a bareboat charter; What’s the difference?
Wow; that is a loaded question.
In the simplest terms: Chartering a boat is a commercial venture as opposed to a recreational venture.
Not to be confused with renting a boat; which is also considered recreational, in purpose; but still commercial.
A bareboat charter is a recreational charter (for the purposes of this article). And because it’s deemed recreational, and not commercial, it doesn’t fall under the immense scrutiny that would be for a commercial charter venture. Kind of like the difference between being an armature vs. pro.
Now; if you need more detail, feel free to read on.
What constitutes a charter?
When you contact someone or a company to take you out fishing, booze cruise or trip to a party island or beach that is a charter; a commercial venture. And, for the scope of this response you are limited to six passengers.
When you contact someone or a company to use their boat (meaning you’re going to operate it; that is a rental; a recreational venture. But, while the rental is considered recreational in purpose, it’s still exchanging money for use of the boat and thus, you are limited to only having six passengers.
Pretty cut and dry.
However…
And to put into context, I am referring to vessels as large as around 80 foot yacht (under 100-gross tons) down to a 12-foot Jon boat.
Let’s say you had a friend who owns a boat. And this friend was not going out on the boat that day; but, you asked the friend to take you (and your posse) out. For your friend's troubles for taking you out, you gave him/her something (let’s say you chipped in for fuel or brought booze and snacks) for the ride.
That something you gave for your ride is considered payment.
That payment can be in the form of cash, credit, fuel, booze, snacks, favors; basically anything of value.
That action of giving something of value for why you’re getting a boat ride is in fact, a charter (with or without a contract). And as a charter, falls under immense scrutiny with the USCG.
The two biggest (but not all) criterion that must be adhered to under a charter are 1) the bud who operates the boat must be licensed by the USCG; and 2) the passenger count is limited to six passengers only and is considered a commercial operation. In other words, making money with a boat.
Now, if your same bud (with the same boat) calls you up and says “hey, I’m going to a party island or fishing, would you and your friends like to go with me?” And because you’re a nice person, you offer to pay for fuel or bring snacks and booze, etc. That is just an example of you being a good and honorable boat friend; and thus, not a charter. Which means, no USCG licensed required for your bud operating the boat and you/your bud can take as many peeps on the boat that it can legally handle (weight) as long as everyone has a properly fitted life jacket.
When someone is receiving something of value for use of their boat (chartering or renting) that is considered a commercial operation and you are limited to six passengers; again, kind of like a pro vs. an amateur.
Side note 1: As a boat owner (in Florida) you can’t just rent your boat out. To do that you need a State livery license and a few more new laws went in place last April in Florida.
Side note 2: That small eco-tour or dolphin-watching pontoon boat that can carry twenty plus peeps, or a water taxi, or that dinner cruise yacht, those boats were inspected by the USCG and were given a certificate that states the number of passengers the boat can carry. A whole different topic.
So, when you call up fishing charter companies or party yacht companies, they may tell you that there is a six passengers limitation. And now you know why.
But...
There is a 3rd type of boat acquisition called a bareboat charter. And anyone that advertises that they can take up to thirteen is actually bareboating the charter.
Bareboat charters were used back in the day for on-the-water commercial enterprises that didn’t want to invest in owning a boat but had on-the-water skills to make money; and all they needed was a boat. Think fishing, or dredging, or some other on-the-water enterprise. These enterprises had the talent, but just needed a boat to do it and didn’t want the hassle of owning or perhaps couldn’t afford.
Bareboating was also used for peeps that wanted to use a yacht for a couple of weeks but didn’t want to own the yacht.
Introduce: The Demise Charter Agreement; commonly known as a bareboat charter.
And how did bareboat get its name? You get a boat and nothing else!
The key concept in the previous statement: “‘You’ get a boat.” Meaning, you temporarily own a boat under the duration terms of the demise agreement. And as a boat owner, you can do anything you want with the boat; it’s your boat. It’s not a rental and it’s not a charter, it’s your boat.
Since there is money changing hands for the use of the boat; even though you are now a “de facto” boat owner for the duration of the agreement; and regardless of the reason for use of the uninspected boat (a recreational boat); SOLAS (Safety of Life at Sea) through the IMO (International Maritime Organization); and thus the USCG is going to limit loss of life to twelve passengers only.
Therefore, the total number of passengers on a bareboat is thirteen; twelve passengers and the person who signed the Demise (bareboat) Agreement. And yes, the person who signs the agreement can be on the boat for a total of thirteen. By the way, SOLAS is why a standard charter on an uninspected boat is limited to 6 passengers only; limits the loss of life.
FACTOID: SOLAS was created as a result from the sinking of the R.M.S. Titanic.
The recreational charter industry monopolize on this loophole (meaning, the bareboat agreement) as a way to skirt the six passengers limitation on a charter vessel. And while I use the terms "loophole" and “skirt,” I feel it’s important to remind that bareboating is a perfectly legal method of chartering a boat.
Why is bareboating used by the recreational charter industry? Easy answer; you can sell more charters and make more money when you can rent a boat that can carry 13 rather than be limited to 5 (you and 5 friends; for a total of 6).
All perfectly legal. But, the recreational charter industry is rife with unscrupulous people who don’t follow the “rules.”
Rules; in my humble opinion, that have little to do with real safety. But rules that needed to be followed because they are intensely enforced.
But like all laws and regulations, their existence are designed for safety for the masses.
But being that bypassing the six passengers limitation for a regular charter is such a popular instrument, the bareboat agreement, the USCG targets boats for safety inspections and compliance when they see a boat on the water with more than 6 people.
So what are these bareboat charter rules? And why do boat owners get into so much trouble?
And when I say trouble; I mean: immediate termination of the charter, the agreement, and up to $138,000.00 USD in fines (first offense) and criminal prosecution and asset seizure for multiple offenses.
There are 3 main rules that a person who owns a boat who wishes to bareboat MUST adhere to to meet the regulations.
Now, before I go into the rules, let me give you my opinion as to why these rules are so scrutinized.
The USCG (for safety) and the individuals that have spent time and money acquiring a USCG license, and invested more time and more money to be compliant conducting standard charters, look down on boat owners who do do not have to follow a rigorous set of rules when performing standard charters. Rules that you don’t have to follow under a bareboat agreement.
Remember, the Demise Agreement was an instrument used long before chartering a boat for recreational purposes became popular.
Aside from all the standard safety requirements that every boat must adhere to; under a bareboat agreement; here are the rules.
The boat owner cannot be on the boat anytime the boat is under the demise agreement. Meaning, a boat owner can’t be your captain or part of the crew and cannot not influence any aspect of what the bareboat charterer wants to do with or where to operate the boat. All the responsibilities as the charterer (or also known as the de facto boat owner), are laid out in the Demise Charter Agreement; think damage, condition, maintence, fuel, insurance etc.
The boat owner cannot force you to use their captain(s). The bareboat charterer must hire (and pay) the captain (and crew) separately. However, the boat owner can provide you a list of pre-approved captains (and crew); but you, the charterer, must be given a choice. You have the right to vet any captain and crew. You have the right to provide your own captain (and crew); but, the boat owner has the right to evaluate and approve any captain or crew you bring to operate the boat. And, the boat owner is not under any obligation to approve your captain or crew to operate their boat.
Also, the captain of a bareboat charter does not need a USCG license to operate a bareboat charter (confusing, huh?)
On a side note; there are a few more regulations that are not required under a bareboat that is required with a regular charter; but insignificant for the purpose of this explanation.
Why confusing? Your demise charter agreement is for recreational purposes only (not commercial) and therefore the operator is not required to have a USCG license.
However most companies and boat owners provide pre-approved USCG license captains to operate their boat. But, not all do. However, the charterer has every right to vet any captain by asking to see his/her credentials and to question their experience.
As the charterer, since you must hire (and pay) the captain (and crew), you have the right to dismiss (fire) the captain (and crew) with or without cause.
This is a big deal because the USCG does not want the boat owner dictating any aspect of the boat’s use. It’s your boat under the terms of the Demise Charter Agreement.
Those rules are the big ones. There are a few more but for the simplicity of this article, there are some grey areas (for lack of a better term) with those. All of these rules are in place (and enforced) in the name of safety.
Bareboating is perfectly legal and has a place in the chartering industry. Anyone that tells you different or has a stick up their “arse” about bareboat chartering.
Again, and in my humble opinion, negative views most likely has to do with an axe to grind for some competitive reason.
I am a USCG licensed Master; and I ran (captained) bareboat charters for years. I have helped boat owners who wanted to make money with their boat by providing consultation on the rules and regulations.
There is nothing wrong with bareboating! And until someone changes the rules, bareboating is perfectly legal means to acquire a boat that otherwise limits the charter to six passengers.
And the case of the post I responded to, there is no need to charter two boats that are limited to six passengers when 10 people want to go fishing. You simple need to find a charter company that will bareboat you the vessel. And now you know.
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