Club Boat agreement?

[Bdecker]

We have decided to enter a new club boat arrangement as a cost-effective way to get a current boat that is always available regardless of who is traveling, etc. Before we take delivery, I'm trying to figure out the best way to set this up from a liability perspective, as well as some basic guidelines to ensure that the group that starts as friends stays that way... What have others done? LLC?

[gator1]

LLC is about the only way to go. But the best you can hope for is to increase the odds; no way to ensure group will stay friends.

[gsm_peter]

My two cents

Write a contract that assume you will become enemies and have to sell the boat.

The job is the jurney, not the end result.

Also, if every body chip in 99% it will fail but if every body chip in 101% it can last for ever.

Best luck

Peter

 

[A_B]

I just did this with my co-lake owner. We set up a LLC that only owns the boat, as we have a third partner in another LLC that owns the lake. The issue quickly became boat insurance. Some companies will not write a policy for a LLC or will up charge you. In addition, we found no luck with our existing personal umbrellas picking up on top of the boat coverage for the LLC. We have a corporate policy on the lake, and that will respond on top of the LLC boat policy. You may want to investigate this some more.

 

Went with Global Marine, and they offer $1 million liability for boat at a very reasonable rate.

 

My friend is not mechanical, so I know I will end up doing the maintenance, but I was any way when it was just his boat. I sold mine, so now we have one between us. Makes more sense. We have also owned a lake for 30-years without any fuss.

 

If one of the members has a lot of points on drivers license, it could impact the group.

[Waternut]

Lots of good things listed above so I'm going to say something that I think you shouldn't do. The best way to make enemies and let the boat get trashed is to assign duties. Things like partner 1 pays insurance, partner 2 pays for oil changes, partner 3 washes and winterizes the boat, etc. As the first season gets halfway through, partner 2 and 3 will begin feeling like partner 1 doesn't do anything to keep the boat in good shape and if partner 2 or 3 gets injured or gets busy, the others feel screwed over and don't want to pick up his workload or expenses.

[BraceMaker]

@waternut - sounds like my family.

 

Fact is the easiest/fairest way costs the most money. You hire all of it out and split the $ equally. Or you come up with a $ value for all tasks and if one member wishes to do a task, they can be compensated based on the doing, and if isn't done then you hire it out.

 

Unfortunately my family does not do this and as such I am always royally peeved when I'm in the lake pulling docks in the middle of october in the snow.

[Bdecker]

Thanks all, sounds like we are on the right path with LLC and contract. Luckily we've got a small group that has been skiing together for years.

[Skoot1123]

@bdecker - three ways to look at this, pessimisticaly, optimistically, or responsibly. I like what @waternut said about assigning duties. In my boat partnership we split all costs evenly and if either of us wants to do maintenance then that is on us (costs shared). I am very picky about the boat and my boat partner isn't (as much). But, I knew that going into it. I clean and he tows and stores. Works out well so far.