Marinas Need the Proper Documentation

Marina Dock Age, January/February 2006

When Dealing with Customers, Marinas Need the Proper Documentation
by Dennis P. Kissman

Several times in the past I have written about the importance of having the proper documents In the event a problem arises with a customer and his/her boat while it’s at the marina. The two most important documents are the dockage, storage, or moorage agreement and the marina’s rules and regulations.

Before going any further in-depth about these two documents, it should be noted that what follows are good business practices based on several years of real-world experience in the marina industry. But first, a disclaimer: While employing some legal terminology, the following information should not be interpreted as legal advice or legal representation. It’s always advisable for marina owners and operators to check with legal counsel to make sure they are in compliance with all local, state, and federal laws.

Legally binding

The dockage, storage, or moorage agreement is a legally binding document between the marina and the customer. The marina rules and regulations describe how the marina expects customers to act while they and their boats are at the marina.

Because the agreement is a legally binding document, its name is as important as its contents. Use the term “Dockage License Agreement” rather than simply saying “Dockage Agreement” or “Dockage Contract.” The word license in the title specifically gives a person permission to use the marina. A license agreement is not a contract that binds both you and your customer. In other words, should a problem arise, it is easier to revoke the permission of that person than it is to break a contract. Basically it gives you, the marina owner, more control over any adversarial situation and keeps any litigation out of a tenant-landlord relationship, which usually favors the tenant or, in a marina’s case, the customer. Always have the agreement designate a start and end date — never make an agreement perpetual. Doing this means there can be no ambiguity concerning whether or not the agreement is in effect when you need to enforce the terms and conditions of the agreement.

The first thing the license agreement should contain is complete information on both the customer and his/her boat. Besides having the basic customer contact information — which should include daytime and after hour’s telephone numbers and an e-mail address — it should also have alternate and emergency contact information. If a customer gives a P.O. Box for a mailing address, be sure to get a physical residence address as well. Boat information should be complete, including make, model, chargeable length, beam, and, if appropriate, overall height or draft.

Marinas should also obtain copies of the current Coast Guard documentation and/or state registration and current liability and hull insurance coverage. The marinas should verify that all vessel documentation is in the same name and address as that of the registered customer. It’s actually happened that vessels are registered in one name and the marina customer is registered in another name. This can cause serious problems if the marina tries to collect on a bad debt at some time in the future.

The license agreement should also require a list of names of people who are authorized to board the boat when the owner is not present. Remember that the boat is in the marina’s care, custody, and control while it is in the marina. If the marina allows unauthorized persons to board the boat, the marina may be held liable.

Other points

There are other important points that should be included in the License Agreement. Keep in mind, this may make for dry reading, but given how critical this information is for marinas, it’s important to read it carefully and completely:

The agreement is not transferable or assignable in any way without the express written consent of the marina. This assures that the marina retains control of who keeps a boat in the marina. Any agreement with the previous owner is not automatically transferred to a new owner upon the sale of the boat.

The Marina Rules and Regulations are made part of the license agreement by reference. This allows the marina to make sure everyone follows the same rules and regulations. For example, if a marina’s rules and regulations are part of the marina’s license agreement when a customer signs an agreement, those are the rules the customer must abide by. If the marina decides it must later modify a rule and, unless the customer signs a new agreement with the change in it, the customer is not bound by the new rule. By making reference to a set of rules that is subject to change, the customer that signed an agreement now must abide with the change because the marina only made reference to them in the license agreement, and they are not part of the actual agreement.

In the license Agreement, the owner warrants and represents that the vessel shall be maintained in a safe and seaworthy condition at all times during the term of this agreement. It is not uncommon to find a few derelict boats in a marina. Most often, they were not in that condition when they arrived, but over time, they were let go. This statement will normally give the marina an advantage in getting rid of these types of boats before they become a serious problem without a major legal battle and a lot of cost.

Owner hereby grants to marina a lien on the vessel and a security, interest therein to secure the payment of any and all dockage or storage fees, charges, or other sums due hereunder and for any other services or materials rendered. This statement highlights the marina’s right to place a lien on the boat for non payment. Marinas don’t relinquish this right without this statement; it simply forces the customer to acknowledge this right.

Owner may not assume that the marina’s premises will be a safe, sheltered anchorage during severe weather conditions. It does not matter where in this country a marina is located, it’s going to be subject to severe weather from time to time. This statement helps the marina’s defense should a natural disaster occur. However, please understand that this assumes the marina owner or operator has properly maintained the marina and administered the marina’s rules and regulations fairly to all boaters so they understand what their responsibility is to protect their own boat under these conditions.

The marina reserves the right, at its sole discretion, to reassign, move, or transfer the vessel from slip to slip. There are times when it becomes necessary to move boats in the marina due to work on docks, problems with surrounding boats, pending weather conditions, or to make the marina operate more efficiently. This statement acknowledges the marina’s right to do so.

Subleasing of slips or transferring boats between slips is not allowed except by the marina. This keeps the marina in control of who is in the marina and where they are at all times.

The marina may terminate this License Agreement for any reason (with or without cause) upon written notice to the owner. This gives the marina the ability to immediately terminate the agreement should the customer not abide by the marina’s rules and regulations or any provision in the License Agreement itself, such as for non-payment of slip fees.

The marina reserves the right to rent the slip whenever vacant and all revenues received from such rental shall inhere to the marina. This allows the marina to collect rent from a slip when a customer is out for any length of time. This is a great income source where there is transient boat traffic.

The boat owners represent and warrant that their boats shall comply in all respects with Federal Water Pollution Acts (33 U.S.C. Section 1321) prohibiting the discharge of oil or oily water and (33 U.S.C. Section 1322) untreated sewage, as well as all other applicable Federal and State laws and regulations. This statement not only points out where the responsibility rests for polluting, but the last part is just as important. For example, if a boat does not have a current registration, normally it is not in compliance with state law. This is usually a sign that a boat is destined to become a derelict and gives the marina a way to quickly remove it from the facility before that occurs.

The boat owner hereby acknowledges that he has read and fully understands this License Agreement and the Marina Rules and Regulations. This reinforces how the marina intends to operate and its relationship with the customer. The customer is acknowledging that he or she has read and understands what is expected. This is not a guarantee, but it helps reinforce the marina’s point.

Conclusion

These are not the only points that the dockage agreements should contain and each marina may have extenuating circumstances that require modifying the language to fit its particular situation. In general terms, these signed documents should help minimize some potential problems marinas face. One final point: no matter how well or all-inclusive a marina’s documents are written, if they are not complete, current, and properly administered, they will not protect the marina against litigation.