As one becomes gradually involved in the world of sailing, there is always a lot of industry-specific words coming up. They are everywhere, from equipment and navigation to certifications and boat rentals. If you have ever tried to rent a vessel, sure enough, you came across the term “bareboat sailing.”
So, what does it mean?
Bareboat sailing is a charter agreement, according to which the shipowner transfers to the charterer a vessel without a crew on a rental basis. At the time of rental, the charterer temporarily owns the ship and bears all its operational costs.
Bareboat Charter Peculiarities
The above definition of the contract indicates two fundamental provisions that distinguish the bareboat charter from a time-charter. The first is that the charterer receives the vessel not only for use but also for possession. The second provision is about the provision of a boat without a crew and equipment.
Handing over a ship for use and possession means establishing the dominance of the charterer over the sailboat. It is evident from the fact that he carries out not only commercial operations of the vessel but also its management. The charterer gets these opportunities since before sending the sailboat on a trip, he gets it a crew and properly equips it. The captain and the crew members are the employees of the charterer and are at his service. While being the owner of the sailboat during the bareboat charter, the charterer is responsible for the operation, management, and navigation of the vessel.
Bareboat Sailing Contract
Like the time charter, a contract for chartering a vessel without a crew (bareboat charter) is consensual. It belongs to the number of mutual, paid, and formal agreements. The main difference of a bareboat charter agreement from any other is that the regulation that applies to it the most is the Merchant Shipping Code (MSC).
1. Shipowner's Liabilities
As follows from the definition of bareboat charter, the primary responsibility of the shipowner is to provide the charterer with a vessel for the carriage of goods, passengers, or other merchant shipping purposes. However, his liabilities do not end there:
- The sailboat must comply with all the requirements specified in the contract. It must be in a seaworthy state. If the vessel does not meet the criteria of seaworthiness, the shipowner should take the necessary measures to bring it into the right condition at the time of transfer to the charterer, i.e., ensure the suitability of the vessel – its hull, engine, and equipment – for chartering purposes.
- The shipowner has to eliminate all the vessel's deficiencies at his own expense, provided that they are detected no later than 18 months after the charterer receives the ship. At the same time, the parties may stipulate a different term for the contract.
- The shipowner has to observe the date of transfer of the ship indicated in the bareboat charter. At the same time, no later than 30 days before this date, the shipowner submits a preliminary and no later than 14 days – an updated notice. If the time period from the notice changes, the shipowner must immediately inform the charterer about it.
- The shipowner carries all transfer costs the vessel to the charterer. When transferring the ship, the parties shall take an inventory of its equipment, devices, available fuel, lubricants, and consumables.
2. Shipowner's Rights
The rights of a shipowner include the possibility to inspect or examine the sailboat at any time during chartering. The purpose of it is checking the vessel's condition, the correctness of its operation, and the quality of repair work.
The shipowner also has the right to familiarize himself with the ship's documents, in particular, with the ship's logbook. He has the right to receive information about collisions of the vessel, its damage during operation.
3. Charterer's Responsibilities
There are a lot of obligations that the charterer should follow according to a bareboat contract:
- The charterer has to pay the shipowner the freight for the vessel provided by him. Payment is made one month in advance at a rate agreed by the parties. In case of delay in payment of the freight for more than 14 calendar days, the shipowner may withdraw the ship without warning and recover the losses caused by the delay from the charterer.
- The charterer does not have to pay the vessel's freight costs for the time when it was unusable due to the fault of the shipowner. If the non-navigable condition of the ship is the fault of the charterer himself, he shall pay the freight for the time during which the vessel was not in operation.
- When operating a vessel for commercial purposes, the charterer must maintain it in a seaworthy condition for the duration of the bareboat charter. In the event of a need for repair of the vessel, not related to its hidden flaws, the charterer carries out repair work, replaces worn parts and equipment. In this case, repairs should not entail a reduction in the value of the vessel. Promptly, the charterer is required to carry out the cleaning of the hull and its coloring.
- If the charterer makes changes to the ship's design and its equipment, he must coordinate this issue with the shipowner. He may have to return the vessel to its previous state at the end of the contract.
- Since the ship has no crew under the bareboat terms, the charterer deals with getting one. Sometimes the parties agree that the shipowner can control the selection of candidates for the position of captain of the vessel and its senior mechanic.
- The charterer can only transport goods that are not prohibited by the bareboat charter. Additionally, he can navigate the vessel exceptionally within the area specified in the contract. The charterer shall not make voyages and other related activities, as a result of which the ship may become a subject of arrest or confiscation.
- The charterer must ensure the vessel, as well as liability to third parties for the entire duration of the bareboat charter. If he does not fulfill these obligations, the shipowner has the right to withdraw the ship.
- At the end of the bareboat charter, the charterer should return the ship to the shipowner in the same condition in which he received it. Then, the shipowner will examine the vessel and take into account the natural wear and tear of the boat during the time it is in use and the possession of the charterer.
4. Charterer's Rights
Usually, the charterer has the right, within the limits of the rights granted by the bareboat charter, to equip a vessel with a crew of third parties. He can choose the team for the entire period of the contract or a part of this period – a sub boat charter. The conclusion of this agreement does not relieve the charterer of the duties of the bareboat charter.
If the charterer rescues or tows during the bareboat charter period, then he receives all the remuneration for them.
If a bareboat charter agreement included the condition that the charterer redeems the ship after the contract expires, the vessel becomes his property if the charterer correctly performed all of his bareboat charter duties and made the last payment of the freight.
Details are Important
Often, in practice, the name of a charter contract without a crew has the name of a demise charter. It is an equivalent concept with the bareboat charter.
When signing a bareboat sailing charter agreement, remember, as with any other contract, to pay attention to even the small details of the document, every side's rights and liabilities. You may use the set of main points above as a memo for your future boat rentals.