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Bareboat Charter


BoatWiki - Definitions

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JUN 6, 2023 - A bareboat charter can be defined as a lease or rental arrangement wherein the lessee operates a boat independent of the lessor. Ownership remains with the lessor, but the lessee may operate the boat at will within certain parameters as specified in the lease or rental agreement.


A bareboat charter may be likened to a typical boat rental situation where the renter takes full possession according to a set of agreed upon paramaters. However, If owner or a designee is hired to operate the boat on behalf of the renter, it would fall under the category of a skippered charter. The same applies to the owner's crew as this would fall within the meaning of a demise charter. These have different connotations when it comes to taxation, insurance, and other legal implications.


Bareboat charter terminology is most frequently invoked in the recreational boating industry while demise charters more often apply to commercial arrangements. The Coast Guard does not require commercial endorsements on bareboat charter vessels used solely for recreational purposes, unless skippered by the owner.


Bareboat chartering by an owner may offer certain income and tax advantages for owners. However taxation issues have now come under close scrutiny in many jurisdictions. Chartering a boat can also become fraught with liabilities and legal implications. Much consideration should be given before going down this road and the assistance of an attorney or tax professional is highly recommended. Visit the above WikiTags for more information about chartering.

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JUN 6, 2023 - Page revised.



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