Navigating Boat Slip Lease Contracts: Essential Questions

Key Questions to Understanding Boat Slip Rental Agreements

Typically, a boat slip lease agreement is an "executory" contract, meaning it is an agreement that has not yet been performed. The vendor is required to provide a slip and the customer is required to pay for the use of the slip. The lease period is defined by the agreement between the provider and the customer. Most leases are on an annual or seasonal basis. However, some providers offer long-term leases that run for one, two or three years. Lease agreements can be filled with jargon and unique terms that may confuse the customer.
In simple terms, a boat slip lease agreement conveys from the boathouse owner to the boat owner the right to occupy the slip. If the lease agreement is written well, certain rights are reserved to the boat slip owner, including among others, the right to access the slip for maintenance and the like. Each boat slip lease agreement should specifically address the rights of the boat slip owner, the rights of the boat owner, the duties of the boat owner and the duties of the boat owner at the termination of the lease.
It is the obligation of the owner to provide a slip that is well maintained and in a good location. In the case of small boat slips, the lease should also allow the slip owner to move the slip should an issue arise that will impact the dock and the lease area. Furthermore, some of the more basic agreements will contain a provision that allows the owner to terminate the lease in case of a natural or manmade disaster that renders the area unusable as a marina. For example, if a hurricane or flood were to occur, the boat slip owner would have the right to terminate the lease and sell the boats that occupied the slips. In addition to these provisions, the boat slip lease agreement should address issues that may arise concerning the public nature of a marina. For example , the lease should indicate whether the area is open to the public and whether any food and drink services are included in the lease. If the area is open to the public and these services are included, the lease should make clear whether there are any additional charges. Additionally, when the lease provides that the area is open to the public, it would be advisable to include provisions that address the following:
• The right of the owner to inspect the boat both pre- and post-contract.
• The right of the owner to access the lease area for the purposes of maintenance and repair, or for other purposes, provided reasonable notice and access is provided.
• The right of the owner to terminate the lease agreement without penalty should damage occur to the slip or dock area. For example, a hurricane may arrive and wash all of the slips away or render them unusable for a period of time. In those situations, owners are unlikely to refund the entire payment for the slip. A hurricane could render the slips virtually unusable for several days, weeks or even months.
• The rights of the owner in the event that the boat is damaged while on the lease area. For example, should a fuel tank leak and contaminate the area, who is responsible for clean-up and damage to a vessel?
• The right of the boat owner to seek damages when the owner or occupant of the slip negligently or intentionally damages a neighboring slip or vessel.
• The right of the owner to shut down operations should a vessel sink, result in contamination, or otherwise cause problems. It is common for boat slip owners to construct a dam like structure which will prevent damage to neighboring vessels. In the event of a sinkage, this method will remain effective (if properly maintained).
• Addressing the issue of outside storage. Outside storage is a significant issue for boat slip owners and should be addressed in the boat slip lease agreement.

Six Key Elements of a Boat Slip Rental Agreement

A boat slip lease should include the following terms and conditions among others:

• (1) Description of Property. The property to be leased is any lot or parcel of land developed and maintained by an associated homeowners association and designated for the berthing of boats, unregistered vessels, personal watercraft, and similar facilities in connection therewith.
• (2) Term. The term of this agreement shall be for a period of _________ commencing on ____________ and terminating on ______________.
• (3) Conditions Precedent. It shall be a condition precedent to the effectiveness of this agreement that the _______________ shall have approved the same.
• (4) Rent. (a) The Owner agrees to annually pay to Association rental for the boat slip at the rate designated by Association. Subject to the provisions for early termination contained herein, said rent shall be paid in advance by check made payable to _________________________ and mailed on or before the first day of April in each calendar year during the term hereof. If Owner fails to pay such rent as herein provided, the Owner’s rights under this lease shall be deemed forfeited and it shall cease to be entitled to any use of or rights in respect to the boat slip without further action or notice. (b) The Owner also agrees to pay taxes, assessments, and government charges imposed upon it or Association in connection with the boat slip.
• (5) Use of Boat Slip. The Owner will use said boat slip only for the parking of a boat or personal water craft, and for no other purpose. The Owner agrees to comply with the rules and regulations as may from time to time be established by the Association. The use of the boat slip shall not create a nuisance to other owners and occupants of said residential development.
• (6) Early Termination. The Association and Owner shall have the right to terminate the lease at any time without cause. In the event of an early termination, the Owner shall be entitled to a refund of that portion of rent prepaid for the remainder of the term of the lease.

Common Issues Found in Boat Slip Rental Agreements

Understanding the terms and conditions that accompany boat slip lease agreements is essential for avoiding potential disputes down the line. While lease agreements are unique to each case, certain terms such as usage restrictions and maintenance requirements are commonplace across the board. A good understanding of these common terms will allow you to review and understand your lease on a deeper level.
Usage Restrictions: Most boat slip lease agreements will contain restrictions governing how and when you intend to use the slip. Many marinas will not permit tenants to use the slip for sleeping or living purposes, with most only allowing for recreational use. Other restrictions may limit the number of nights per week that a vessel can be slept on. While these restrictions are typically reasonable, in some instances tenants may find themselves faced with loopholes in the lease allowing for unintended uses.
Maintenance Obligations: Most boat slip lease agreements will require you to perform regular maintenance on the vessel, such as running the engine, testing the batteries, cleaning the bottom and checking the bilge, in an effort to maintain the vessel and prevent deterioration both during and after use. Commonly, tenants are also responsible for keeping the surrounding slip area clean, removing soiled water from the slip, as well as dew removal. Basic care is standard, but other types of requirements may be included at the marina’s discretion. For example, some marinas exclude tenants from using certain harmful products such as bottom paint on the boat, and others limit or prohibit the discharge of any oil or fuel into the water.
Renewal: Finally, most boat slip lease agreements contain provisions related to lease renewal. Commonly, leases grant tenants the right to renew for an extra year provided they submit notice within a certain time frame (usually 90 days or more prior to expiration) and their account is in good standing. Some leases contain exclusive rights to renewal if the property is available. There may also be terms increasing the rent or implementing cost-of-living adjustments for renewal periods.
In summary, when entering into a boat slip lease agreement you’ll want to make sure you clearly understand the terms and conditions at play. As outlined above, there are a number of common terms and conditions that may affect your obligations as a tenant or customer. If you’re in doubt as to your rights and obligations, speak to an experienced legal professional in order to review your case and advise you of your legal position.

Important Fees and Charges Related to a Boat Slip Rental Agreement

Boaters should review any and all fees and costs associated with the lease agreement with the marina. There are a variety of fees and costs that may be imposed on boat owners, all of which should be evaluated. The first, and likely most obvious, cost is the initial deposit that is required by the marina in order to reserve the slip. Some marinas may require the payment of a lease fee, which generally is meant as consideration for the actual lease of the slip for a set period of time. The amount of the lease and where it is to be paid should be addressed in the lease document. Some marinas may ask for the full annual lease, while other may allow the lease to be paid in monthly or quarterly installments. If the lease is paid in monthly or quarterly installments, the lease should address what occurs if the lease is terminated at some point prior to the end of the original term.
Besides the initial cost of the lease, most marinas will charge various other fees depending on the services provided by the marina. For example, some marinas may charge a fee to supply water to the vessel. Some may charge a fee for the use of the pump-out facilities, or charge a separate fee to have the waste pumped from the vessel into the shore-based facilities. Some marinas have fees for internet service. A lease agreement should enumerate the services provided and the fees associated therewith in order to prevent any confusion. Moreover, it is imperative that lessees be familiar with when fees must be paid as well as any penalties for late payments.
When boats are stored in a marina overnight, it is important that the owner understands how the marina handles criminal acts to its property (specifically theft or vandalism of the property). For example, if theft was to occur, would the marina be financially responsible for the loss, or would the lessee be solely responsible for the loss? If the marina is judicious, the lease should limit liability for both the owner and marina alike, such that neither side is unfairly held responsible for the misfortunes brought about by theft or vandalism.

Legal Considerations Regarding a Boat Slip Rental Agreement

When entering into a boat slip lease agreement, it is critical for boat slip owners to consider the legal implications of their agreement. Every state may regulate the ownership and leasing of boat slips within their waterways, and it is important for the parties to understand these rules before signing any lease or rental agreement. Boat slip owners who may be unaware of such regulations, or do not follow the regulations thoroughly, may face increased legal liability if disputes over their lease arise. A common regulation found in many states requires that boat slip owners sign a declaration to the boat slip registry with the harbor department, which will often allow owners to use their slip on the waterway . These declarations must be made before the owner can seek a rental agreement, and exemptions may be available based on the size of the boat slip in question. The declaration outlines the rights and responsibilities of the boat slip owner and is required of the owner before they can use their slip in the waterway. Another common regulation prohibits owners from renting out their slips for commercial use. Under this regulation, boat slip owners cannot rent out their slip to other boats in need of a place to dock for the day or overnight. In order to eliminate any potential legal issues, the boat slip owner should contact their state’s harbor department to inquire about their specific laws and regulations regarding the renting of their marine property.

Negotiating a Boat Slip Rental Agreement

Once you have determined that you want a boat slip lease and found a boat slip, you are ready to start the negotiation process. Negotiation and execution of the lease agreement is very important since it will set the terms for your relationship with the marina. To ensure your understanding of the rights and responsibilities outlined in the lease, it is common to retain counsel experienced in the drafting and negotiation of boat slip lease agreements. Whether or not you retain legal counsel to negotiate the lease on your behalf, you should have a general understanding of the relevant, overarching terms that are commonly included in such lease agreements and negotiate accordingly. First and foremost, determine whether you would like an annual term, a term of years, or a month-to-month lease. An annual term is the most common, but paying on a monthly basis may be more desirable based on the anticipated duration of your use of the boat slip. Another significant element is the rent due and when it is payable. Most leases clearly stipulate a due date; what happens if you fail to pay on time is also very important. The marina may enact a variety of measures ranging from a late fee or suspension or revocation of your rights to use the boat slip, to eviction. In addition, you should review the repair and maintenance obligations of the marina and, if applicable, what permits and licenses you are required to maintain in order to lease the boat slip. Additionally, if the lease is for a dockominium, you will need to become involved in the governance of the association. Be sure to understand the rules and requirements associated with being a tenant, director, or committee member, if you choose to become one. Finally, comply with all rules set forth by the marina. Failure to comply can lead to termination of the lease, in addition to possibly exposing you to liability.

What to Look for When Selecting a Marina Slip

When choosing the right marina for your boat slip lease, there are several factors to keep in mind. Selecting a location that is conveniently situated can reduce not only the amount of time spent getting to and from the marina, but also costs associated with fuel consumption.
Also consider the amenities offered at your potential marina such as covered docks, transient slips, hoists, and repairs. In addition, you will want to determine the applicable regulations for entry and exit including hours of operation and what is permitted once you are inside the marina.
Finally, it is important to be familiar with the reputation of the marina prior to entering into a lease. Try to acquire references from current slip holders and prior slip holders. Also check in with your local Better Business Bureau to see if there are any reviews on the marina you are considering.

What to Anticipate when Renewing or Terminating a Lease

It is important to begin planning for a lease renewal or termination process early enough to avoid being in a bind. If a lease expires, a tenant may lose the right to the boat slip. If a boat slip owner does not renew or terminate a lease in accordance with the terms of the lease, he or she may be renewing an otherwise undesirable lease for another term. Failure to follow the proper termination procedures may even lead to a tenant being able to argue for a month-to-month agreement upon the expiration of a set term.
A boat slip lease can typically be renewed for a certain amount of time as of the expiration of the existing lease term. Generally, the party that has the right to renew the lease is defined within the boat slip lease and may be subject to an exercise of the right to renew in writing. When negotiating your renewal clause, discuss timing and be sure that your expectations can be satisfied in your region . Remember that you are also obligated to remove your vessel before the expiration of the lease so that you do not remain on the premises when you are no longer authorized.
Similarly, a boat slip lease can define a process for termination in order to permit either party to exercise the right to terminate and end the relationship. Define what happens upon termination so as to avoid any disputes and misunderstandings that can cause unwanted litigation when it is too late to plan otherwise.
When negotiating your agreement, be certain that the business terms are clear and that you contract for what you expect the agreement to mean. Review deadlines carefully so that you do not miss an important expiration date. Together with sound legal counsel, a boat slip lease can be a win-win for everyone involved.