I want to spend some time educating (or reminding) Captains (and Owners) who charter vessels under a demise or “bareboat” charter contract.
For others whom may have stumbled upon this writing, let me start with a preamble into the world of “boat charters”.
Did you know that you do not have to have a boating license to operate a boat if your boat is for pleasure or recreational purposes? Now before you tell me I am wrong, let me add the two main exceptions.
1. For those that were born on or after January 1, 1988 the completion of an approved boater certification course is required to operate a watercraft or vessel on public waterways in Florida. However, this is technically not a license; but is commonly referred to as a “boating license.”
2. To obtain and keep active a vessel insurance policy.
However, the moment you want to earn money operating a vessel, a license issued by the United States Coast Guard (USCG) is required.
Now before I begin, there are about a “gazillion” websites out there that will give you the 411 on the details and what and how to obtain a captain’s license. The information I provide is only to support the contents of this article.
There are two main types of USCG licenses.
1. Operator of Uninspected Passenger Vessels License - OUPV License (aka 6-Pack license)
2. Masters License
Each License has three endorsements based on where you earned your experience.
Inland – Can operate commercially on bay's sounds, rivers, and lakes
Great Lakes and Inland – Can operate on both the Great Lakes and Inland waterways
Near Coastal – Can operate on Inland waterways as well as coastal waters out to 200 miles offshore.
A Master’s license has additional endorsements based on gross tonnage (GRT). Gross tonnage does not equate to the physical weight of the vessel, nor does it relate to a vessel’s water displacement.
Gross tonnage (GTR) is the volume of a ship’s enclosed spaces in cubic meters depending how the vessel is constructed and commercial use and is used in assessing harbor dues.
The most common tonnage endorsements for a master’s license are
25 GRT – Vessels around 40 – 50 feet
50 GRT – Vessels around 50 – 65 feet
100 GRT – Vessels 65 feet or more
The vessel foot lengths are generalizations but are useful guides.
Now that we got licenses out of the way, lets talk about vessels. For the purpose of this article, there are two types of vessels.
1. Uninspected
An “uninspected vessel” is one that has not had or is not subject to USCG inspection. Nearly all pleasure and recreational boats are uninspected. Nearly all vessels sold for pleasure and recreational purposes are uninspected.
INTERESTING FACT
At the time of this post, there are currently 310 inspected vessels out of over 100,000 registered vessels in the Tampa / St Petersburg area; that equates to .003%; meaning, nearly all the boats out there are not inspected.
2. Inspected
An “inspected vessel” is one inspected by the Coast Guard and that has been issued a Certificate of Inspection. An inspection certificate among other things will list the maximum number of passengers the vessel can safely operate.
a. In most cases, vessels primarily built for commercial use will be inspected and be issued a Certificate of Inspection.
b. A recreational vessel can be inspected after it is built and sold; however, the process to have a vessel inspected by the Coast Guard comes with unique set of risks related to extra costs and vessel damage that can occur during the inspection process.
If you get nothing else out of the article about chartering a vessel; remember this:
The maximum number of passengers for hire for an uninspected vessel under 100 GTR (under 65 feet) is ...” Six!” For vessels over 100 GTR that number is 12.
That means an uninspected 65-foot yacht can only take 6 passengers for hire on a charter, quick round the block 5-minute cruise or even leave the dock! Yes, 6!
Additionally, only a Captain with a USCG Captain’s license can legally operate a vessel with passengers for hire. That means all those captains with personal boats and no captain’s license assume a huge risk if they are caught with passengers for hire on their boat. And yes, I am aware of all the “alternative” methods boat operators operating without licenses perform to “skirt” around the regulations.
The reason why an OUPV Captain’s license is commonly referred to as a 6-pack license is that they are only allowed to to carry up to 6 passengers for hire.
Passengers that are not for hire (friends, family, acquaintances, etc.) that you take for a ride on your boat equate to operating a vessel being used for pleasure or recreational purposes and not subject to the 6 passenger limitation.
So, how many passengers that are not for hire can be on your vessel? It depends. The number basically boils down to the amount of total weight of your passengers, provisions, fuel and supplies in relation to how much weight your boat can safely operate? Also; how many properly fitted, good conditioned (serviceable) and proper type PFD's (life jackets) you have for each passenger. Most vessels will have a maximum weight placard with a “max persons” number on it; or be listed in the manufacture’s vessel manual.
Consider the “max persons” number as a guide. It all comes down to actual weight. Why? Not every person weighs the same; e.g. you can have a person of 85 pounds and a person of 200 pounds. Most weight placards average a person’s weight to 150 pounds.
So, what can a Master license operate?
A master license is also limited to a 6-passenger count for uninspected vessels under 100 GRT.
However, a Master License comes into play when the vessel has a Certificate of Inspection.
A Master can carry as many passengers for hire as listed on the Certificate of Inspection so long as the vessel’s GRT weight is within the master’s weight class endorsement.
Meaning, a Master with a 25 GTR endorsement would allow the operation of the vessel of that size for hire, BUT cannot take more than 6 passengers for hire IF the vessel was not inspected.
Test your knowledge:
1. How many passengers for hire can a Master 100 GTR take on an uninspected 65-foot yacht?
Answer: 6
Reason: Per regulation, the maximum number of passengers for hire on an uninspected vessel less than 100 GTR is 6.
2. How many passengers for hire can a Master 25 take on a 45-foot center channel with quad 400’s and a beam of 12 feet (inspected)?
Answer: As many as listed on the Certificate of Inspection
Reason: Per regulation, the maximum number of passengers for hire on an inspected vessel is listed on the Certificate of Inspection; so long as the vessel’s GTR is within the Master’s GTR endorsement.
3. How many passengers for hire can a Master 50 GTR take on a 90-foot yacht inspected for 30 passengers?
Answer: 6
Reason: Master 50 doesn’t have the correct GRT weight endorsement
4. How many passengers for hire can a Master 25 take on a 45-foot center channel with quad 400’s and a beam of 12 feet (uninspected)?
Answer: 6
Reason: Even though the Master’s GTR endorsement would allow the Master to operate this vessel with passengers for hire, Per regulation, the maximum number of passengers for hire on an uninspected vessel is 6
5. How many passengers can an OUPV 6-Pack Captain take on a 65-foot yacht.
Answer: As many passengers as there are properly fitted, good conditioned and appropriate type of PFDs; so long as the total number of passengers and weight, passenger stuff, fuel, provisions, supplies, gear, etc. doesn’t exceed the vessel’s maximum weight.
Reason: Per regulation, the vessel is considered for pleasure / recreational purposes; meaning, no passengers for hire.
Okay, I am done with my Preamble… However, all the information I shared above equates to nearly all of the reasons why you read articles about the Coast Guard stopping another illegal charter.
Demise Charters… let’s get into it!
First, I may use “Demise” and I may use “bareboat” in my writing. Know that the two are synonymous and mean the exact same thing. Additionally, whether a boat rental or a demise charter, the sole purpose for the use of the vessel is for recreational purposes only.
A Note About Demise Charters:
Demise charters is an instrument that allows renters and rental companies a way to operate without owning a vessel and carry more than 6 passengers. Think of a person who wants to rent a pleasure yacht for a long period of time (cheaper than owning a maintaining a yacht and crew).
There is a difference between a boat rental and a demise charter. For the purpose of this article, a boat rental can only allow 6 passengers in total (even if only one person pays the rental fee); unless the vessel is 100 GRT or larger (which can carry a max of 12 passengers); Coast Guard regulations (46 C.F.R. sec. 2.01-7).
Additionally, the boat rental requires the person to be over the age of 18, possess on their person a "boater’s license" and provide proof of competency in operating the rented vessel.
The rental boat owner is responsible for providing certain things e.g. fuel, crew (if needed), etc. in addition to imposing restrictions on the renter such as where and how you can operate the vessel.
A bareboat charter allows you a bit more freedom; but also, some additional liability.
Under a Demise charter agreement, the Charterer is responsible for the following:
Choice in Captain and crew as well as their rate of pay
May discharge, for cause, the Captain and any crew
Possession of the vessel must be properly transferred. Meaning, the actual owner can have no influence (picking a captain who works for the owner) nor can be on board the vessel during the charter’s duration. Side Note: A Charterer can choose a captain who works for the owner, so long as the Charterer understands they have the say in picking the Captain AND can fire the captain for cause.
Safe navigation of the vessel
All the regulatory and safety requirements for the vessel and passengers
Vessel, property and people liability
All food, stores, and fuel (if required)
Insurance coverage (if required)
Some demise charter agreements may not require the charterer to be responsible for those items above; identified as “if required.”
The important thing to remember about a demise charter is that the Charterer assumes ownership of the vessel and has the say in everything during the charter’s duration; regardless of what the owner may demand. The only stipulation an owner can enforce is the qualifications of the Charterer’s selected Captain.
So why bareboat a vessel over renting?
Bareboating an uninspected vessel allows the Charterer to have 12 guests on board for a total of 13 people; plus, the Captain and crew so long as the vessel is used for pleasure or recreational purposes.
Bareboating a vessel (over renting) is a loophole (for lack of a better term) in the six-passenger limitation of uninspected vessels.
In my chartering world, the person who is the bareboat Charterer has no real clue or idea as to what they are signing. They think that they are renting a boat from a company that allows 13 people on board; comes with a Captain and crew; the actual owner is responsible for any damage to the vessel; and, the owner’s liability insurance will cover any property damage or person injury. WRONG!
With every bareboat charter I captain, at agreement signing, I always inform the charterer that they officially own the boat, I work for them and they can fire me for cause. 99% of time they think I am kidding.
A note about the 12-passenger limit…
If a vessel carries more than 12 passengers, the vessel is considered a passenger ship. A vessel categorized as a passenger ship, places the vessel into a different category. All passenger ships must be SOLAS compliant; which means, the vessel requires rigorous testing, training, and surveying. SOLAS or The International Convention for the Safety of Life at Sea is an international maritime treaty that sets the minimum safety standards worldwide.
The Coast Guard…
When you are on the water a lot; eventually you will be stopped by the Coast Guard. Unlike being stopped by police, the Coast Guard does not need a reason to stop you; nor do they need a reason to board your vessel; nor do they need a reason to search every inch of the vessel whether in plane site or not.
There is no protection of privacy from the Coast Guard like there is with police.
General rule of thumb… If the Coast Guard asks permission to board your vessel, chances are you haven’t done anything wrong. They didn’t stop you to make your life miserable. They are doing their job in making sure you, your passengers and your vessel are safe to operate and travel.
Depending on what type of Coast Guard vessel is being used, the Coast Guard will either contact the vessel on Channel 16 announcing their intention. Or, they may approach the vessel in a smaller vessel with lights and or sirens.
Just like being stopped by the police, you should maneuver your vessel so that it doesn’t impede other boaters (unless the Coast Guard personnel give you instructions on where to go), cut your engine(s) and place fenders out if necessary.
Being boarded is a routine process; however, it can be somewhat different based the specifics of the stop or how the initial interaction or inspection proceeds. A typical boarding will take about 30 minutes; unless there are reasons to conduct a more thorough inspection. The boarding party will often be at least one to three Coast Guardsman.
While there are many reasons why the Coast Guard will stop you, for the purposes of this article, I will discuss what happens when they are stopping you for a suspected illegal charter.
Once the boarding vessel is secure, a guardsman will board the vessel, introduce themselves. Once the Guardsman has identified the Captain, they will sequester the Charterer and the passengers with another Coast Guardsman (for the primary guardsman’s safety). The primary Guardsman will typically only speak to the Captain unless there are is a specific reason to speak to the Charterer or the other passengers.
The primary Guardsman may start with asking if there are any weapons on board. This question is more to do with knowing if any exist and where they are located, rather than examining the firearms; additionally, they may want to see any state issued weapons permits.
Next, they will request from the Captain the vessel’s state registration paperwork or Certificate of Documentation, Certificate of Inspection and valid Stability Letter.
Important Note: these documents should be the originals.
At this point, the Captain should inform the primary Guardsman that the vessel is not inspected and that the vessel is under a demise or bareboat charter agreement.
The guardsman’s will then request to see the Demise Charter Agreement in place of the Certificate of Inspection. And, let me stop right here:
Captains/Owners! You better have taken the 5 minutes to have the Charterer sign the demise charter agreement! Not having a signed (executed) contract is the biggest ”No No” “Dumb Dumb” stupid thing you can do, and where the Coast Guard determines the charter is illegal and in violation.
The guardsman will also asked to see the Charterer’s photo identification (e.g. driver’s license).
Tip: When your charter party arrives, ask the Charterer for his/her photo identification. You don’t actually need to see it; it is to ensure the charterer has it; because, the Coast Guard will need to identify the actual Charterer (de facto owner of the vessel). If the person that paid for the charter forgot their ID, pick another passenger who has their ID and make them them Charterer; and make sure they are aware that they own the boat, they had a choice in choosing a captain and that they can discharge the Captain and any crew for cause.
The Guardsman may ask the Captain how many souls are on board. As Captain, you better know the answer without hesitation.
While your producing said items, the Guardsman will ask for the Captain’s Merchant Mariner Credential and proof of chemical testing program or consortium.
All the requested documents you provide will be given to another Guardsman for inspection and validation. At this point, the primary Guardsman may ask you arbitrary questions or may start conducting a typical safety inspection. A lot has to do with how you handle yourself during the these first few minutes of the boarding encounter.
If a safety detailed inspection ensues, your stop may be an additional 30-60 minutes. The inspection may or may not include every part of the vessel; but the Guardsmen will inspect the most common areas for the largest safety concerns.
What happens if there is a violation?
The Coast Guard isn’t out to “get” boaters, Captains or first-time violators. Their role is to ensure the safety of vessels and passengers in their waterways.
If the Guardsman finds a violation on your vessel and depending on the violation and it’s severity, they (in most cases) will give the Captain/Charterer an opportunity to address or take necessary action (if the issue can be addressed easily and or quickly).
For minor violations, the Coast Guard may issue a written warning that includes instructions on what needs to be corrected in order to become compliant.
When issues are serious, but simple fixes, they may allow you to contact someone to bring the necessary item(s) to become compliant or escort you to a marina or store so you can purchase the solution (e.g. an extra life jacket). It just depends on the type and severity of the violation.
In some cases, the Guardsmen may recommend items or actions that can make your boat safer but are not strictly required by law. It will be your choice to follow up on these recommendations, and they will make it clear if something is or is not mandatory.
Just remember, if the Coast Guard lets you go with minor warnings, your vessel now has a record with the Coast Guard; and, if stopped again the Coast Guard will know if you or the vessel owner ignored or addressed the problem.
If your vessel is deemed to be a safety risk in the water, or if you are in violation of key or serious regulation(s), the Coast Guard will end the charter immediately and the vessel will be escorted to shore and instructed not operate the vessel until this issue(s) are corrected.
In cases where the violation is related to something illegal (e.g drugs,
and yes, at least for now, in Florida... This includes marijuana), the Coast Guard may detain or deliver the guilty party to the appropriate law enforcement agency.
When serious violations are discovered...Here comes the fines. Some are for the owner and some are for the Captain.
Below are some of the common violations and associated fines found with bareboat charters:
Up to $18,477 for failure of an inspected vessel to be under the control of an individual with the appropriate Coast Guard license.
Reason: Failure to have a properly executed demise charter agreement reverts the charter back to a regular uninspected recreational vessel with passengers for hire. The key point: the vessel must be inspected if it has more than 6 passengers.
Up to $7,250 for failure of operators to be enrolled in a chemical testing program.
Reason: Don’t be that Captain that let their initial enrollment into a drug/chemical monitoring program expire! For the non-Captain readers, proof of a drug/chemical monitoring program is required when you apply for your Captain’s license.
Up to $4,685 for failure to provide a Coast Guard Certificate of Inspection for vessels carrying more than six passengers.
Reason: Failure to have a properly executed demise charter agreement reverts the charter back to a regular uninspected recreational vessel with passengers for hire. The key point: the vessel must be inspected if it has more than 6 passengers.
Up to $15,995 for failure to produce a valid Certificate of Documentation for vessels over 5 gross tons.
Vessel‘s that operate commercially (that includes transporting passengers for hire) that are over 5 GRT must be documented with the Coast Guard. A invalid or non-executed demise charter agreement makes the vessel a commercial vessel. 5 GRT is the equivalent of a 26 foot or larger vessel.
Up to $11,712 for failure to have been issued a valid Stability Letter prior to placing vessel in service with more than six passengers.
Reason: Failure to have a properly executed demise charter agreement reverts the charter back to a regular uninspected recreational vessel with passengers for hire. The key point: the vessel must have a valid Stability Letter if it has more than 6 passengers.
Regarding these and other fines...
If you operate a vessel with more than 6 passengers for hire and you don’t have a valid AND SIGNED demise charter agreement with all the necessary language, the Coast Guard views the vessel as regular recreational vessel and the loophole with having more than 6 passengers is lost.
If Owners or Captain’s continually are found to be in violation (especially multiples of the same violation(s) the Coast Guard may seek criminal prosecution (now we‘re talking jail time), seizing the vessel and if necessary closing the owners chartering company.
Helpful Note:
When you get boarded, the Coast Guard will issue you a Boarding Report. If your boarding had no issues, keep the “gold sheet” with your vessel’s registration or Certificate of Documentation. When boarded again, show the “gold sheet” to the primary Guardsman; chances are it will lessen the amount of time a typical boarding process takes.
Last, the Coast Guard will issue a press release on their Facebook page (search for Coast Guard Sector St. Pete) and their official press release website.
For Coast Guard Sector St. Pete, the official press release web address is the following:
The Coast Guard has a duty to inform the public; especially about illegal (or unsafe) chartering, owners and Captains.
And while it is not the intention of the Coast Guard to publicly shame. In my humble opinion, violators should be publicly shamed.
Most Common violations from a bareboat charter and how to avoid them:
Know exactly how many souls are on board.
While not a violation; this is a serious indicator to the Coast Guard that the Captain may not know what they are doing and to look for more safety concerns and violations.
Before the Charterer steps on board the vessel have them sign the bareboat charter agreement.
Failure to have an executed charter agreement automatically places your vessel in violation of the following:
Failure to provide a Coast Guard Certificate of Inspection for vessels carrying more than six passengers
Failure to produce a valid Certificate of Documentation for vessels over 5 gross tons.
failure to have been issued a valid Stability Letter prior to placing vessel in service with more than six passengers.
Make sure the Charterer knows he/she is the vessel owner and she has the right to discharge Captain and crew for cause.
This is in essence of a demise charter; and if the charterer isn’t aware that they are the de facto owner, it’s like the charterer never signed the agreement.
Failure to have an executed charter agreement automatically places your vessel in violation of the following:
Failure to provide a Coast Guard Certificate of Inspection for vessels carrying more than six passengers
Failure to produce a valid Certificate of Documentation for vessels over 5 gross tons (if applicable).
failure to have been issued a valid Stability Letter prior to placing vessel in service with more than six passengers.
There are items that a Captain must always carry; e.g. Rules of the Road, Light List, Charts, Chemical Testing Program and Marine Credential.
Keep all these items in the same place; and let the Guardsman see all those items when you provide your Marine Mariner Credential. Keep electronic backup copies of all these items.
If you don’t have a marine credential, this will result in a failure of an inspected vessel to be under the control of an individual with the appropriate Coast Guard license violation.
If your vessel has been recently boarded previously; keep the “Gold Sheet.”
Having the previous and recent “Report of Boating” document known as the “gold sheet” will significantly lessen the amount of time your present boarding will take.
Conduct a semi-routine inspection of all the vessel requirements.
Make a checklist that covers all aspects of a vessel inspection. At least once a month, review the checklist and address any issues or deficiencies.
Read my “Marijuana, Do you Wanna” post
Understand my take on “Weed at Sea” and what you should do as Captain.
As a prospective bareboat charterer, i now know the rules
However what is my liability and what insurance should i have as the temporary owner of the vessel?