Boat Charters

You may want to ‘hire out’ your vessel for an occasional charter to help with the cost of running your boat, or you may be considering setting up a charter business and making your investment work for you, either way YachtingLawyers can help. Use the following guide as a checklist of points
to think about and action in respect of chartering.

When chartering your vessel, we strongly recommend entering into a written agreement known as a “charter agreement”, which sets out the owner/charterer rights and liabilities of each party and will help avoid or at lease minimise any conflict arising further down the line.

Contact YachtingLawyers for more advice on this, we would gladly draw up a charter agreement on your behalf. There are many types of charter; time, voyage, bareboat and skippered for example. Whatever your charter arrangement, we can help.

If you are a business owner, a marina operator, a yacht broker, or other form of marine business, we offer a “Legal MOT Service” for businesses to review and update their current terms of business.

Make sure your terms of business and associated documents reflect the business you are operating and are in-line with current law.

This will protect your business and minimise any future exposed risk.

Contact us to discuss your current documentation and to arrange a ‘legal MOT’.

1. Inform your insurance company of your charter arrangements. Most marine insurance companies will accommodate skippered charters, but in the case of bareboat the charterer will have to obtain their own insurance.

2. Register you vessel on the UK Ship Registry– either a part 1 or part 3 registration. Part 1 is a must if you are going to be chartering overseas. Read YachtingLawyers guide to Vessel Registration for more information on this.

3. If registered, inform the UK Ship Registry of a change of use to your vessel; from pleasure use to commercial use.

4. Ensure your vessel is MCA compliant. Under the 1993 pleasure yacht regulations, all chartered boats under the British flag are required to comply with a comprehensive code of practise, which covers most areas of construction, equipment and operations. Check to see if your vessel complies, if not, you will have to invest in new equipment to ensure compliance; for example, pleasure craft over 13.7 metres are subject to life saving and fire appliance rules.

5. You will need a marine surveyor to carry out an inspection on your vessel to obtain an MCA SCV2 commercial licence and the surveyor will confirm whether the vessel is suitable for commercial charter use.

6. If your boat is berthed in a marina, check to see if there are any restrictions on chartering it. In some cases, chartering may result in an increase of mooring fees. Check the terms of any berth holders licence and / or marina terms and conditions of business.

7. If you are chartering your vessel overseas, and your vessel is registered on the UK Ship Register (part 1 or part 3) remember, the British RedEnsign you are afforded protection under, does not extend to the charterer UNLESS the charterer is a UK national or member of the British RedEnsign themselves. Read our British Red Ensign Yachting Flagging Guide.

8. Depending on the size, value, and level of charter activity of your vessel, you may want to consider using corporate structuring (UK or offshore) as a vehicle to take advantage of certain tax reliefs. Read our Guide to Offshore Structuring for Yachting Guide and contact YachtingLawyers for more information and advice on this.

9. Persons in charge of navigation of the chartered vessel are required to be licensed. Ask for evidence of skipper’s license, competent crew qualifications etc and keep a record of these.

10. Join an industry recognised professional association such as the Professional Charter Association (PCA) and British Marine (BM). Take advantage of the help and advice given to the chartering industry. Make sure you are up-to-date with current law and regulations governing your business activity.

11. Enter into a written charter agreement! We cannot stress the importance of this enough. Contact YachtingLawyers we would gladly draw up this type of agreement to help protect you and your business. If you are starting up a charter business, contact YachtingLawyers we can guide you through the process; from setting up the company (or partnership), to applying for VAT registration and dealing with any legal contracts such as shareholders agreements and terms of business for service agreements and websites. 
12. Similarly, if you are selling your charter business we can deal with the sale and would gladly guide you through the process. Get in touch to find out how we can help.