What Are Boat Lease Agreements
In the most fundamental sense, a boat lease agreement, also known as a reservation, is a legally-binding agreement between the lessor (i.e. to push boat owner) and the lessee or renter (i.e. to push boat tenant). Essentially, it must spell out the basic terms that apply to the rental, such as the boat description, the amount of rent due every month, when it is due, and the duration of the lease.
Because a lease will often be for a long term, typically six months or more , it is important that both parties have contract arrangements in place so that they both know they are protected. Often when renting a boat, and especially when paying rent in advance, the tenant has little more than a handshake that the owner of the boat will grant continued access to, and use of, the property. A written lease helps to avoid both the potential for either party to wiggle out of the deal by misrepresenting the terms of the agreement, as well as giving each trademark granite evidence of the agreement.
Essentials for a Boat Lease Agreement Template
A boat lease agreement template should contain the fundamental elements necessary to cover the key points and particulars of the transaction between the two parties. The basic components include:
The Parties – A designated name for the lessor and lessee.
The Description – A thorough description of the boat, including the hull number, any trailers or additional equipment being leased, location, registration numbers, and slip number (if applicable.) You may also want to include a general description of the operation the lessee will conduct using the boat.
The Fee Structure – An itemization of the lease fees, including initial deposit, amount per month, due date and late fee if applicable, as well as any increase in rental fees over the term of the lease.
Insurance Requirements – General liability and physical damage insurance requirements, with instructions on providing proof of insurance to the lessor.
Transfer Procedure – A procedure to be followed by both parties should the lessee desire to have a new individual take over the lease agreement. You may also want to specify a time frame during which this can happen, as well as any transfer fees associated with it.
Maintenance – A clear outline of the maintenance responsibilities of both parties, including dock fees, winterization, slip or storage rental dues and any additional equipment maintenance.
Boater’s Safety Course – For some states, even if the lease is not commercial in nature, the lessee may be required to present proof of completion of a boater’s safety course.
Boat Leasing: Legal Considerations
The legal requirements for leasing a boat vary significantly depending on your location and the type of boat you wish to lease. National laws, state laws and local laws can all affect the legality of a proposed boat lease. Depending on where you are located, special permits may be needed for leasing a boat and there may be limits on how long you can lease the boat.
If an individual or company leases a boat to another party, the owner must obtain a license from the state in which he resides. A license to lease barges, boats or even motorboats is only needed in the following U.S. states: Alabama, Arizona, Arkansas, California, Florida, Hawaii, Louisiana, Mississippi, New York, North Carolina, Tennessee, Texas and Washington. Operators of a boat that offer the service for hire are required to maintain liability insurance – coverage of $300,000 to $500,000 is usually sufficient.
Laws at the federal level do not apply to boat leasing specifically. Certain federal rules do affect the leasing industry, however, such as making it illegal to mislead customers when leasing a product. These federal laws are enforced by the Federal Trade Commission.
In addition to following these federal laws, individual states have the power to enact their own leasing laws and regulations. After being approved by their respective legislatures, these laws are put into effect by the states’ consumer protection offices. States typically enforce their own laws with the help of agencies that monitor issues with leasing on a daily basis. Because there are no federal programs to control leasing, most infringements of state-compliant leasing fall through the cracks.
Using a Boat Lease Agreement Template
The major benefit of using a template for boat leases is that it saves the time and energy that will likely result from drafting one’s own lease agreement from scratch. Similarly, for those who do not have the time or energy for extra legal work but nonetheless want a completely water-tight boat lease, using a standard template may save you from having to hire an outside attorney.
While downloading a template off the internet can be a quick and easy solution, it is worth your while to follow through with some basic research as to whether the template you select is right for you. That might involve answering questions like the following: Is it significantly different from the boat lease one is looking for? Is it up-to-date in terms of current law (for example, if there have been any recent court decisions or statutes that affect boat leases, does the selected template incorporate those important updates?). The answers to those questions, at the very least, can assure that you have complied with the minimum necessary legal requirements.
If relatively few changes are necessary to add your specific particulars, then you can save time and money by selecting a standardized template rather than hiring an attorney to draft an original lease agreement from scratch.
Customizing a Boat Lease Agreement Template
Adjust the Terms
Not all boat leases are created equal. It is rare that a template will meet your needs perfectly. Here are some aspects they may need to be amended to address any special circumstances:
● Duration of the lease – Is it month to month? One year? Does it extend if rentals are missed?
● Rental price – Does this include utilities, taxes and maintenance? What happens in the event of any issues?
● How you intend to pay the rent – When will it be due? How? Where?
● Conditions – Will you permit pets? Will you allow the owner storage space on the boat?
Add Information
There are also some specific clauses that are likely to be missing from templates:
● Inspections – Will you be allowed to inspect the boat? Will the owner be allowed to verify the condition of the boat as well? What happens if an issue occurs?
● Liability – Who will be responsible for the payment of damages? Will you be required to pay for insurance? If so , who is responsible for obtaining it?
● Use – Will you be allowed to use the boat for business matters? Can you sublease the boat to someone else? What about written permission for the lease extensions?
Don’t Forget to Follow the Laws
Also, remember to make sure the lease is in compliance with the laws in your area. Some places have strict requirements regarding what must and can’t be in a lease agreement and what conditions must be followed.
Boat Lease Agreement Errors to Evade
When drafting a boat lease agreement, there are certain common errors that many people are prone to make. One of the most common is failing to establish clear terms for security deposits. In most cases, the amount of the deposit and the circumstances under which it can be withheld should be clearly stated. A common mistake is failing to mention any deductions that will be made from the security deposit for damages or other like issues.
Another issue is the failure to include terms for late fees and overages. If a tenant is averaging a certain number of hours per week, an inexpensive late fee can serve as a strong incentive for them to keep paying on time. Another common mistake is not including the payment method. Since it is technically possible to legally make a verbal agreement, it is important that payments be made only through approved methods. The simplest method is writing them into the lease.
Lastly, the scope of the lease itself is sometimes poorly described. Some leases only apply to a single boat while others lease multiple units. Further, some boat leases apply to similar boat types or those at a specific marina. Even if you believe your lease to be simple enough to understand on its own, preparing for legal challenges is important. Having a valid lease will ensure that such challenges are settled in your favor.
Sources of Boat Lease Agreement Templates
The Internet offers a plethora of resources for credible legal information, and the same can be said for finding reliable boat lease agreement templates. For discerning buyers who have decided that purchasing a boat without a professional inspection will not be a compromise to make, there are online resources that offer a variety of reputable contract options.
LegalZoom
As one of the most popular online legal resources, LegalZoom offers plenty of affordable options for all kinds of contracts. The company prepares boat lease agreement templates according to state law requirements, so Nevada residents will receive a state-compliant document. Like all legal forms available through LegalZoom, the lease agreement template from LegalZoom includes a satisfaction guarantee.
LegalTemplates.net
LegalTemplates.net requires a free registration for the use and download of all templates, but it is a safe place to deal. NakedSecurity.com has rated LegalTemplates.net as a "very safe" resource because it scans all files for malware before they are made available to members. On LegalTemplates.net, members can find services for sale, such as online conferences with licensed attorneys in the member’s state. With LegalTemplates.net, buyers can rest assured that all templates are drafted in compliance with their state laws.
Rocket Lawyer
Lawyers.org reports that Rocket Lawyer is a respected site that features affordable, subscription-based services. The site is free to use for 7 days, and after that period, the monthly fees must be paid to continue to use the services on Rocket Lawyer. Subscribers can choose to sign a long-term contract or simply re-subscribe each month. Of all the online legal resources, Rocket Lawyer rates as fairly low cost when compared to traditional legal services. Members can connect with actual attorneys on Rocket Lawyer as part of their member services.
LawDepot.com
The documents from LawDepot.com are free for use for 7 days before a subscription price is required. The documents offered at LawDepot.com count toward the overall number of available templates for a member. According to Yahoo! Voices, LawDepot charges a one-time fee for each document, so that if a member wanted to revise a document, they would need to pay the fee again.
Lease a Boat: Conclusion
Regardless of the terms identified in the Lease, both parties – lessor and lessee – should enter into the transaction on an informed basis. The following advice is offered to help here.
DEPOSIT: A lessor should accept no less than 30% of the total rental price as a deposit prior to the beginning date of the Lease. This protects the lessor and gives the lessee an incentive to show up on time to pick up the boat. If the lessee is not present on the start date or shows up without money, the lessor is keeping the deposit money (which is properly a deposit and not to be applied to the rental price) .
ON-SITE BOATS: Lessors should consider having the leases prepared on-site in the presence of a boat rental agent. A leasing agent whether at a marina, rental operation or boat store has the best knowledge of the boats and their quirks. A customer who arrives with his own lease will have to be educated on motor operation, battery charging and fuel consumption.
EXPIRATION: Lenders who expect to require a return of the boat at a later date should consider offering the lessee the right to renew at the end of the term. This avoids "the tussle" about a return at the incorrect time; while putting the burden on the lessee to renew the Lease.