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A bareboat charter, or demise charter, is an arrangement for the chartering or hiring of a ship or boat for which no crew or provisions are included as part of the agreement. Instead, the people who rent the vessel from the owner are responsible for taking care of such things and (for commercial shipping) obtaining insurance, usually for a minimum term of one year.^[1] The act is commonly known as bareboating or bareboat charter.

There are legal differences between a bareboat charter and other types of charter arrangements, commonly called time or voyage charters. In a voyage or time charter, the charterer charters the ship or part of it for a particular voyage or for a set period of time. The charterer then can direct where the ship will go but the owner of the ship retains possession of the ship by its employment of the master and crew. In a bare-boat or demise charter, on the other hand, the owner gives possession of the ship to the charterer, and the charterer hires its own master and crew. The bare-boat charterer is sometimes called a "disponent owner". The giving up of possession of the ship by the owner is the defining characteristic of a bareboat or demise charter.

In shipping

In a bareboat charter, no administration or technical maintenance is included as part of the agreement. The charterer obtains possession and full control of the vessel, along with the legal and financial responsibility for it. The charterer pays for all operating expenses, including fuel, crew, port expenses and P&I and hull insurance.

A bareboat charter is in effect a financing arrangement. It is generally considered a lease contract, specifically a finance lease, for accounting purposes, under both international financial reporting standards (IFRS 16) and US accounting standards.

In yachting

In yachting, a bareboat charter is usually for a short period. There are hundreds of bareboat yacht charter brokers or agent companies, which offer yacht finding and travel organisation services that are similar to travel agents but only more specialized. Their purpose is to use their experience and networks to locate a client's ideal bareboat in terms of price and location. Much like online travel agencies that sell unsold inventory of airline tickets and hotel rooms at a fraction of the price, there are now also last-minute bareboat charter brokers, where travellers can find excellent rates.

Bareboat technically refers to any boat that can be chartered without a skipper or crew, but typically, bareboating refers to sailing yachts, including monohulls and catamarans.

Bareboat hire has become increasingly common since the mid-1990s, particularly since the early 2000s.^[2] There has been increasing demand for yacht vacations, and many experienced and semi-experienced yachties now consider it easier and cheaper to hire a bareboat than own their own yacht. While both the international leisure travel industry (particularly outdoor activities based vacations) and the boating industry boomed in the 2000s, so too did the bareboat charter industry, which incorporates both of pursuits. Bareboat chartering is extremely common in the Caribbean such as the British Virgin Islands, but also in Croatia with around 4000 charter boats which makes probably the largest charter fleet in the world before Greece with around 2500.

In the United States, there is an additional legal distinction with regard to bareboat or for hire, or "skippered" charters. When persons pool their finances to bareboat so that the qualified master among them may skipper for the group, the master is not ostensibly a paid skipper but now takes on the legal responsibilities of one. That can have far-reaching consequences in the event of negative occurrences at sea.

References

^ "46 CFR § 169.107 - Definitions". LII / Legal Information Institute. Retrieved 2024-07-27.
^ Prochazka, Zuzana (2020-11-05). "A Brief History of Chartering". Sail Magazine. Retrieved 2024-07-27.