What Is a Boat Rental Agreement?
Generally a rental agreement between a geographic area and a specific boat for a set period of time. Most rental agreements are in writing and signed by both the boat owner and the individual renting the boat. The vessel rental agreement is meant to provide some protection for both the boat owner and the person renting the vessel. The boat rental agreement, as with any written contract should strive to protect the interest of both the lessor and lessee . A lease between an owner and a yacht charterer should include the following minimum terms:
• Start and end dates of rental period
• Total cost, including rights to any deposits or security deposits
• Payment options and schedule
• Termination options and the handling of unpaid fees
• Insurance coverage
• Registration and inspection requirements
• Possession and use of the vessel
• Use of the onboard electronics system
• Tax responsibilities
• Rights of an agent or broker involved in the deal
• Remedies for breach of contract
The contract should also take state and local laws into consideration. For example, some states or counties may require mandatory boater education courses. First-time boat rentals should include safety equipment and manning requirements. An initial boater safety class can be included as part of the agreement. In addition, the yacht rental contract should make provisions for liability waivers, consumer protection, and any applicable refund policies.
Essential Components of a Boat Rental Agreement Template
The most essential component of any boat rental is the parties themselves. This includes the lessor, or the person who owns the boat for rent, and the lessee, or the person renting the boat. In almost all circumstances, both parties will want to provide their legal name, mailing address, and phone number in the boat rental agreement.
The second most crucial part of any boat rental agreement is the dates. Even before establishing your fees, it is important as a lessor to determine how long you will be making your vessel available for rent. Perhaps you are giving a short-term rental of just a few days or weeks, or perhaps you have a significantly long-term rental that will cover several months or even a whole season.
The rental fee is always included in a boat rental agreement template, as it is the basis of the contract itself. The fee should only be for the rental period and of the vessel itself. If you require a security deposit, this should be separate from the advertised rental price.
Benefits of Employing a Standardized Template
A primary reason why boat rental agreement templates are necessary is because they provide consistency. A rental agreement, after all, if drafted properly, leaves no uncertainties in the intentions of the parties. It helps to avoid miscommunications. A rental agreement also acts to legally obligate the parties to the contract among them.
There is a common misconception that anything must be voluntary to avoid any legal obligation. The reality is that the law is replete with instances that encourage or discourage particular activities. When considering legal liability, it’s essential to remember that law is not found just in legislative enactments, but also in court decisions. Many of these decisions have expressed the public policy of encouraging boat rentals, while others discourage or wants to regulate the activity. Inherited within other court decisions are the terms of a lease.
In situations where state law has provided public policy guidance, the courts interpret a boat rental contract in favor of the pleasure boats lessor. That means, when a boat rental agreement is likely not drafted the way the law intended, the judge will interpret it to accomplish what the law foresaw. A boat rental agreement template encourages each party to use precise language that would be used in a purposefully drafted contract. A standard boat rental agreement template helps eliminate the introduction of unexpected provisions.
The last thing you would want to do is to draft an agreement for use that would not specifically apply to any situation. You could avoid some legal liabilities such as premises liability as well. In the absence of a properly written rental agreement, a lessor risks exposure to liability, while a lessee may find themselves limited and consistent exposure to at least three different kinds of legal liabilities.
Customizing a Boat Rental Agreement Template
Customizing a boat rental agreement template is essential to ensure that both the renter and the owner are protected and that the agreement accurately reflects the terms of the rental. A well-crafted template can provide a solid foundation, but it’s crucial to make modifications that accommodate specific needs, conditions, and locations. Potential renters should look out for aspects of the contract that may require customization.
Firstly, assets being hired should be clearly described. A typical clause states that the "Boat" to be rented or hired is the vessel whose details are set out in Schedule A. Although it may be tempting to deal with the issue verbally and informally, this should not be done. If a boat is described with reference to its construction date, it should be clear whether this relates to the date on which this particular vessel was first built or whether it relates to the date on which the vessel was purchased by the boat business. The latter might be relevant for vessel restrictions as a result of marina conditions.
Secondly, lines or buoys provided by the owner should be referenced in the agreement, particularly in areas where it is required that vessels be tied up at a particular location or at particular berths, as this may avoid subsequent disputes. If some other form of mooring is used, the reciprocal rights of each party should be specified. For example, should the renter use the second owner’s mooring buoy to which the owner of the first vessel is entitled, or should the renter remain tied to its own mooring buoy.
Thirdly, specific information about the boat being rented or hired should be made available. This typically includes details such as the boat’s name, type, length, tonnage, year of build, and engine horsepower.
Fourthly, schedules that include information about marinas and soft standings should be attached to the template to form part of the contract. Information about marinas should detail the name of the marina, its location, and its facilities. Information about soft standings should include the name of the soft standing and any launch or embarkation facilities.
Fifthly, if a boat is quitting trade or changing ownership, it should be made clear whether the vessel remains at the soft standing or marina berth named in the contract or whether the contract is terminated automatically as a consequence of the sale or cessation of trade. If the vessel is at the soft standing, the owner will need to supply a replacement vessel.
Sixthly, insurance arrangements should also be considered. If the vessel is to be insured by the renter, for example, immediate notification of cancellation of cover by the insurer will be necessary and the renter will be obliged to offer proof of insurance and renewal of cover upon request by the owner.
Seventhly, if the agreement relates to multiple vessels, such as several jet skis, for example, it is important that the rents and royalties are language that applies to all of the vessels so that they are treated equally in relation to the payments.
Finally, it is not unusual for a private boat business to enter into an insurance linked transaction to protect itself from liability in the event of litigation. In practice, the owner of the boat, the person who originally bought the vessel, takes out an insurance policy that pays any judgment against the owner and the owner essentially sells or assigns that policy to the renter. This type of agreement is not the norm in Australia, where boat businesses face greater exposure than those in North America, for example.
Common Pitfalls and Mistakes
When it comes to renting and using a boat, the boat rental agreement template is your best friend. It is important to remember, however, that there are many lawyers out there online and in person who are just waiting for you to make a mistake in order to catch you for a bunch more money later. Therefore you should always use a boat rental agreement template, but also remember that they are not foolproof either . For instance, if you do not fill out your boat rental agreement template the way you intend, it could come back to bite you later. This is especially true in a situation where you might be converting or changing a date on the agreement but forgot to update the expiration. A boat rental agreement template is still legal and therefore should not be used lightly or carelessly.
Legal Regulations and State-specific Guidelines
A boat rental agreement template is not just a piece of paper; it has legal implications. While it’s always a good idea to have a written document to protect both parties rental and leasing vessels, the real issue comes down to is the document legally binding or not. While there are no federal laws regulating boat rental agreements, the individual states have laws that do regulate their use and operation. Consequently, these laws can vary from state to state. With this in mind, it’s always a good idea to check with your state’s laws before you sign any agreements between parties for anything. In some states for example, there are legal requirements for any written leasing agreement exceeding twelve months, even with a boat rental agreement template. In other states however, there aren’t even any laws that establish a minimum amount of deposited funds like the maximum amount that can be held as security.
For many other states, they do require a written rental agreement for a rental time period exceeding thirty days. Any violation of these rules by the owner of the vessel will result in the owner of the vessel having no claim against the customer for any unpaid rent, damages, or other charges associated with the rental of the vessel. Other states also have rules about returning deposits to the customer, the time it should take to return the funds, and other rules and requirements regarding the vessel owner.
Some states have specific ownership and insurance requirements if the vessel is going to be offered for rental in the state. In addition to that, they also have rules requiring that tax must be collected on any lease agreement exceeding thirty days in certain counties of the state. Another state only allows the use of a boat rental agreement template for a period of more than twelve months if it’s signed as a contract and tended to the sale of the vessel, which is a state mandated requirement.
A few states also limit the use of any rental agreement template for any period of time less than twelve months if the document isn’t signed as a contract. Other states have a three-day cancellation period for any written rental agreement. If any words are crossed out of the rental agreement, it must be signed again by both parties, usually the owner of the vessel and the renter of the vessel.
Again, it’s extremely important to take the time and make sure that you read and understand what state laws say in relation to the particular boat rental agreement template you’re using so that you know and understand your rights and responsibilities in relation to rentals involving vessels.
Where to Locate Trusted Boat Rental Agreement Templates
While most people think of third-party websites and blogs for their forms and templates, government websites can also be a great resource. Most state-based department of natural resources will feature forms and templates for the legal and safe use of a variety of watercraft. Some websites even provide a service to draft these documents for a fee, so you could also check with your state’s government site to see what services they provide.
A large number of professional organizations related to the boating industry and recreation will also provide their members with access to templates related to other businesses in the industry. Check your trade association’s website to see what kind of member benefits they provide that are relevant to your business.
Some of these resources may be fee-based , but often the price of admission also includes a lot of other great resources you may find useful in your business. It’s always a good idea to double check your local government listing to see if there’s a trade association dedicated to your specific type of business.
More than likely, if they exist in your area, for a nominal yearly fee, they’ll provide templates covering a variety of topics related to your business.
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