There has been an unusual amount of questions asked in a few of the Captain Facebook groups I belong to. I’m getting a little tired of writing the same response; so I decided to post to my blog and will now point people to it when they ask about chartering their vessel.
This article describes some of the key elements of bareboat requirements but certainly not all. Anyone that wishes to bareboat should know, understand and follow the regulations.
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Here is yet another long winded but informative response about bareboating.
What you (the poster) are saying is misleading and incorrect.
Your conclusion is wrong and not why the charter was terminated and reclassified as an illegal charter.
(Responding to a news article and why the charter was stopped and why it was classified a an illegal charter).
You have to know the regulations.
Let’s start with the obvious. The charter had paying passengers and is not a T-boat.
Therefore, a vessel under 100 GRT is classified as a SPV; and the maximum amount of paying passengers is 6. Yes, you read that correctly, the maximum paying passenger count is 6.
That’s a SOLAS reg. The maximum amount of paying passengers on vessels over 100 but under 300 GRT is 12. Also a SOLAS reg.
So why can a bareboat charter operate with 13 passengers (and not 12; which is the max); where at least one is a paying passenger?
There is a (let’s call it a loophole) with Coast Guard regulations that has been exploited by the private charter industry; bareboating.
The demise charter agreement’s (also known as bareboat contract) original purpose was not for the recreational charter industry.
Let’s start with number of passengers allowed on a bareboat.
The maximum number of passengers for a bareboat is 12… yes it’s 12…
Some will say 13… but that’s not accurate.
The 13th person is not classified as a passenger.
That 13th person is “The Owner.” Not the actual owner (or registered owner) of the vessel whose name appears on documentation or state title and state registration.
The owner in this case is the “de facto” owner; the person who is listed as owner on the Bareboat agreement and is “the owner” for the duration of the Bareboat agreement.
I have spoke in great detail about the legalities of Bareboating with this group before. If you missed it… sorry… not going to retype.
How does one determine that a person is a de facto owner?
The underlining component is the registered owner can not have any influence on or with the vessel during the terms of the Bareboat agreement.
Remember, the bareboat agreement was not designed to address recreational charters. It’s intended purpose was on the commercial side; working vessels (dredge, fishing, towing, cargo, etc.).
The recreational charter industry took a legal instrument designed for the commercial side and saw a legal loophole that grants more paying passengers on vessels.
When a paying passenger steps onto a boat, their is a duty by vessel owner and vessel operator to ensure that each person is and remains safe.
If it helps .. look at it this way… McDonalds has health department regulations because they charge for food, but you can serve whatever ya damn well please in your own home without any oversight. But the moment you want to serve the public food, you are required to get a license or come under health code regulations.
There is a level of standards that must be upheld when the general public “pays for goods and services.” A duty that comes with earning revenue (being a professional; not an amateur).
Bareboating allows someone who doesn’t want to invest in buying a vessel to legally contract a boat for use; rather than “Hey, can I borrow your boat to make money dredging a private canal for a yacht club. I promise I’ll take care of your boat and use it legally.”
Yeah, right.
Owning a boat carries huge liability issues; if and especially when something goes wrong.
Transferring ownership to someone else while that someone is using the boat minimizes liability to the actual owner, when the boat is being operated by the “renter.”
Boat owners (even a private 16-foot Jon boat owner) have a tremendous amount of liability attached if someone gets hurt on or with their boat; and typically don’t even know it.
So, this liability is transferred to the renter during the usage determined by the bareboat agreement.
There is a reason why the Demise Agreement is called a Bareboat Agreement.
You get a boat (and nothing else!).
And let’s talk about nothing else.
This means the de facto owner needs to find a crew (fuel, supplies, insurance, etc.) to operate.
All of those decisions must be made and controlled by the de facto owner as to ensure the registered owner has no influence or due influence;
That way the register owner is shielded by liability if something were to go wrong during the bareboat agreement.
Which is why a bareboat renter is required (highly encourage) to inspect the vessel and ensure it’s safe to operate as well as obtain their own liability insurance.
Now, let’s focus on crew.
The de facto owner is REQUIRED to obtain their own crew. Why can’t the registered owner provide crew? If the registered owner supplied crew .. TRUE OWNERSHIP of the vessel is not actually transferred because the registered owner provided crew rather than the de facto owner finding crew that reports to the de facto owner.
However, it’s perfectly legal for the registered owner to validate any credentials and capabilities of supplied crew (and approve said crew to operate on their boat) by the de facto owner.
Often, a de facto owner will look to (as for recommendations) from the registered owner for suggestions on personnel to operate and navigate the vessel.
However, to ensure no due influence is maintained by the registered owner, the crew needs to “hired”
by and be under direct control by the de facto owner..
And the way that is accomplished and measured is by three courses of action
1) The de facto owner must have the ability to select captain and crew. And this includes a list of authorized competent crew that the owner recommends; meaning it doesn’t have to be strangers that the owner doesn’t know or have a professional relationship with. The key element is that the de facto owner “has a choice.”
2) The de facto owner is required to pay for crew services directly
3) The de facto owner must have the ability to dismiss (fire) crew with or with out cause.
Meaning, the recommended (by registered owner) crew’s performance is under the control of the de facto owner because the de facto owner is the one paying the bills.
And the case of the article you referenced.
The Coast Guard was able to determined that the de facto owner was not given a choice in Captain nor crew and the crew was not being paid by the charterer; but paid by the registered owner.
Because of the lack of choice, this nullifies the bareboat agreement because the owner had due influence of the vessel.
Once the bareboat agreement contract has been nullified, the vessel can no longer operate in this manner and the max amount of passengers for hire on a vessel under 100 GRT is 6 and the registered owner and licensed mariner are now operating an illegal charter.
Hope you found value in understanding why you hear about illegal charters. And next time might be in a better position to dispense correct information.
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