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Boat-share arrangements and domestic commercial vessels

Find out if the vessel you own or operate under a boat-share agreement is a domestic commercial vessel. 

We consider a ‘boat-share arrangement’ to be any arrangement where different people have a right to use a particular vessel at the same or different times.

The owner of a boat-share vessel may be an individual, multiple individuals, or a company.

Ownership may be as joint owners or tenants in common in specified shares.

Owners would usually have authority to exclude people from using the boat, and would be responsible for the maintenance, berthing and upkeep of the boat either themselves or by contracting out these responsibilities to another party.

Models of boat sharing arrangements

Typical ‘models’ of boat-share arrangements include the following: 

  • The ‘shared equity’ model. This arrangement means that each participant is a legal owner of a vessel, in proportion to the share of ownership purchased.
  • The ‘boat club’ model. This arrangement means that club members do not have legal ownership in a vessel, but pay money to use a vessel legally owned by someone who makes a profit or other commercial gain.

Use of online hire platforms 

There are many online platforms advertising vessels for hire.

Vessel owners who are listing their vessels online for hire should be aware that the vessel will be a domestic commercial vessel if one of the following apply:

  • Members of the public, other than the owners, are using the vessel and paying a fee to do so. 
  • The boat is being used to operate a business open to members of the public, such as fishing or sightseeing charters. 

A boat that is hired for short-term marina accommodation using an online platform is not considered to be a boat-share arrangement.

Read further information on the use of online platforms . 

Signs that a boat-share vessel may be a domestic commercial vessel

Signs may include any of the following:

  • The boat is hired out to a third party by its owners or a management company.
  • Members of the public, other than the owners, can use the boat, for money, without the owners’ express permission.
  • A management company has been contracted by the owners of the boat, and the contract specifies that the boat is to be used for commercial purposes (such as hire and drive).
  • A management company is making decisions about the maintenance, berthing or upkeep of the vessel which cannot be influenced by the other owners (for example, where the company has a ‘golden share’).
  • A company or promoter can remove ownership rights from scheme participants.
  • Members do not own the boats but pay to use them. 
  • The boat is part of a time-share agreement but not owned by the people who share the time on the boat.

If a vessel is a domestic commercial vessel then the national law applies to the vessel, although there may be exemptions from certain requirements depending on the size, type and area of operation.  

Read more about what you need to do before you operate your domestic commercial vessel

Signs that a boat-share vessel is unlikely to be a domestic commercial vessel

If a vessel is owned by a group of people and used only for their recreational purposes, and other people do not enter commercial arrangements to be on or use the vessel, we will not consider the vessel to be a domestic commercial vessel.

Typical examples include:

  • A group of friends buy a boat together for fishing, sailing or water skiing.
  • A person buys a share in a boat from a builder who has set up a joint ownership scheme, and all the joint owners use the boat only for private recreation. 
  • A group of people own a boat and pay a management company to maintain the boat, and the boat is used by the owners only for private recreation.
  • A not-for-profit community group owns a vessel and makes it available for their members to use on a cost-recovery basis.

Find more information about arrangements for community groups and clubs.

If a vessel is not a domestic commercial vessel, the recreational boating laws of the state or territory where the boat operates will apply.

You should check with your local marine safety authority to find out the rules that apply to recreational boating activities. 

The difference in safety standards for commercial and recreational vessels

There are more stringent safety regulations for vessels used for commercial purposes compared to regulations for recreational vessels. A member of the public would reasonably expect those higher safety standards to be met if they are paying for the use of (or access to) services provided using a vessel.

Commercial vessels must comply with specific design, construction, equipment, manning and operational standards which are generally higher than those that apply to recreational vessels. In addition, commercial vessels are often required to be surveyed and inspected. 

Example: 

A fishing charter vessel would generally have to undergo both initial and periodic survey inspections, which would not be required of a recreational fishing boat. 

Commercial requirements include (but are not limited to): 

  • Handrails of a specific height to prevent people from falling overboard.
  • Fuel tank and system requirements that reduce risk of fire or explosion.
  • Bilge (water) pumps to reduce effects of flooding.

Depending on its area of operation, a fishing charter boat may have to carry safety equipment beyond that of a recreational boat.

This could include a life raft, life jackets, emergency distress beacons, marine radios, flares, navigational equipment and fire extinguishers.

This equipment must be carried in specific numbers, stored, maintained and checked against certain specifications.

Last updated: 

Friday 21 June 2019