The “sharing economy” is a new concept that has inspired new businesses in diverse contexts … let’s talk about boats. (This discussion is condensed from a presentation given by one of my maritime law colleagues, David Sump, Esquire)
The 2012 National Recreational Boating Survey conducted by the U.S. Coast Guard revealed that boats were used, on average, only 11 to 12 days per year. The remaining days the boat is essentially unused while the maintenance costs, insurance and pier charges continue. Some boat owners reached the conclusion that they would be willing to allow a manageable number of people to use their boats, provided the rental fee was sufficient to cover any additional expenses arising from the rental process with a “kicker” to help defray the overhead costs associated with boat ownership. The rental costs will vary depending on whether the host is only offering dockside lodging or whether the rental is offering “transportation” as well as lodging.
Through companies such as Boatbound and Airbnb (Matching Sites), owners with vessels to rent are provided an opportunity to advertise those properties on a specialized webpage just for those seeking to rent vessels for dockside lodging. While Airbnb dominates the dockside rental market, several companies are active in the short-term recreational vessel charter market, including Boatbound, Boatsetter, Sailo, Boatforrent, Inc., and GetMyBoat, LLC. Unlike the dockside market, these matchmaking sites link hosts willing to rent vessels for use beyond the dock with those guests who want the experience of either operating a vessel or having a crew provided so the guest may cruise to nearby locations.
Renting a vessel may invoke the maritime jurisdiction of the court in the event of a dispute, applying a body of maritime law that is probably foreign to most matching site hosts. Matching site-provided insurance is not comprehensive, does not address the status of the underlying insurance policy covering the property, and will be subject to the complexity of marine insurance in the maritime jurisdiction. Both the host and guest must consider these shortcomings.
Hosts in many cases are unaware that engaging in commercial activity with their recreational vessels may invalidate their existing insurance policy. The sharing economy provides opportunity to both the owners of personal assets and to those who would like temporary use of those assets for a reasonable cost. However, the benefits of the maritime sharing economy must take into consideration the unique aspects of maritime jurisdiction and the maritime law that place additional duties and obligations upon those who participate in that economy.
Caveat emptor is the primary lesson of this emerging market. If you are considering navigating the rocks and shoals of offering your boat in the “sharing economy,” Rountree Losee LLP is ready to help with proactive planning to help chart a safe course.
Geoff Losee can be reached by visiting www.rountreelosee.com, by email at [email protected] or by calling (910) 763-3404. Rountree Losee LLP has provided a full range of legal services to individuals, families and businesses in North Carolina for over 110 years. As well-recognized leaders in each of the areas in which they practice, the attorneys of Rountree Losee provide clients a wealth of knowledge and experience. In their commitment to provide the highest quality legal service, they handle a wide range of legal issues with creativity, sensitivity and foresight.
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