Rules of the Road: Bareboat charters must meet strict U.S. criteria

Rules of the Road: by Capt. Jake DesVergers

In the southeastern United States, the U.S. Coast Guard continues to implement an aggressive program to eliminate illegal charters. During the past year, multiple voyages have been terminated. In some cases, legal action was taken by the federal government against the operator. Sentences ranged from monetary fines and probation to prison time.

Why are so many yachts running afoul of the regulations? In order to be in full compliance for a bareboat charter, there are certain criteria that must be met. These requirements can be found in the Passenger Vessel Safety Act of 1993.

In simple terms, a bareboat charter is a written agreement that provides no crew and the crew is not specified by the yacht’s owner. In this type of agreement, the charterer pays the crew. Furthermore, the charterer has the option of selecting the crew, while also retaining the authority to dismiss them for cause. Most important to note, full possession and control of the yacht must be vested in the charterer.

According to the U.S. Coast Guard, there are seven distinct elements that must be met in order to have a valid bareboat charter operation:

1. Crew choice: The charterer has the option of selecting crew. This means that the vessel owner may provide a list of qualified captains, typically three or more, for the charterer to select from or the charterer can find their own crew. If the charterer wants to hire their own crew, then the beneficial owner may require general levels of proficiency.
2. Crew pay: The captain and crew shall be paid by the charterer.
3. Provisions: All food, fuel and stores are provided by the charterer.
4. Expenses: All port and pilotage fees are paid by the charterer.
5. Insurance: Coverage is obtained by the charterer, at least to the extent of covering liability not included in the owner’s insurance.
6. Crew termination: The charterer may discharge, for cause, the captain or any crew without approval from the yacht’s beneficial owner.
7. Inspection: The vessel is surveyed upon delivery and return to the owner.

A bareboat chartered vessel shall not carry more than 12 passengers without a Certificate of Inspection (COI). This restriction includes a scenario in which two separate charters meet at anchor, each with 12 passengers, and decide to raft. At no point can either of the yachts carry more than 12 passengers. 

A charter yacht is considered to be carrying “passengers” whether moored or underway. The charter operation starts at the time the contract is signed. This includes when the yacht is moored, anchored, or any other operation for that pre-determined period of time.

The owner of the yacht may not serve as the captain, be part of the crew, or in any way be on board during the vessel’s charter. If the owner of the yacht is involved in any of the mentioned actions, the requirement of relinquishing ownership is not met.

If one determines that a potential bareboat charter may not meet the specific regulations, the U.S. Coast Guard invites direct communication to clarify any and all concerns. The Prevention Department at the Sector Command where the yacht is located should be contacted. Details are listed online at homeport.uscg.mil.

Capt. Jake DesVergers is chief surveyor for International Yacht Bureau (yachtbureau.org). Comments on this column are welcome below.