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Thursday, 27 February 2014

Living Afloat - Part 3

Share boating has survived some dubious individuals and, despite causing some sharers a lot of heartache, it remains a popular option for those determined to take waterways holidays, willing to boat through much of the year, but better able to afford a part share in a boat than buy one themselves. It is an area full of pitfalls and options. Here is what you get, what you pay and what to look out for.

are-boating should be the logical half-way house - or stepping stone - between hiring a boat and owning one yourselves but the bad experiences of many at the hands of the collapsed and sometimes crooked Ownerships and Challenger share-boating businesses has left many people suspicious about the concept.
Despite the history, it survives, and is even growing slowly once more as new, more responsible and crucially more transparent operators take up the slack and more syndicates decide to manage themselves.
There are over 200 shared ownership boats on the inland waterways - that's around 2,500 owners - so there is a lot of experience of shared ownership about, and I quite admire them because we see them out on the water in deepest winter as well as the high season, so these people have to be regarded as serious boaters.

Even on a frosty winter towpath you are as likely to meet a shareboater as a private owner. They boat all-year round.

Andrew Cooley, who operates the useful Boatshare4u website ( says the concept is still growing steadily. “I'm not aware of any new privately commissioned syndicate boats, but at least nine new boats have been launched or are under construction by the major management companies in the last 3 years - that's over 100 new owners.”
He says he knows of just two of the syndicates which suffered in the collapses of Ownerships and Challenger which have sold their vessels but “almost all the ex-Challenger and ex-Ownerships boats are still providing great holidays for their syndicate members and are managed either by one of the three main companies or by the syndicate members themselves.”
Andrew says: “One of the other upshots of the Ownerships crash was that syndicate members really did appreciate that they were the owners of their boats and were able to make their own decisions about management.”

The key change seems to be that today's management companies all work on the basis that the boat is entirely owned by the syndicate members and that the syndicate has its own bank account.
Andrew Barton, Managing Director of BCBM Boat Share with bases at Nantwich and Braunston, says syndicate boating is a niche market, aimed at those who can't, at a certain stage in their lives afford the initial outlay of buying a boat and feel that they can better afford the £1,300 a year ongoing cost of boat-share rather than the £7,000 a year he estimates it costs if you own a boat.
Andrew Barton, Managing Director of BCBM Boat Share

How has he restored the trust in management companies like his? “I feel the answer has to be total transparency,” he said, “We have to demonstrate that we can be trusted.”
That means syndicate members don't have to pay up front once or twice a year. His management fees are invoiced monthly, “so if we went out of business they would just be £35 out of pocket.”
Members also have access to the boat's bank account at an time and even if a specific job on the boat is queried, a syndicate member can see the detailed invoice for the work, almost immediately.
He started the business three days after the Challenger collapse, aiming to provide those syndicates with a new option and now manages 48 boat-sharing syndicates, 38 on the canals, six on the Broads and four in France. The company has built three share narrowboats and the fourth shell is outside his office and aimed to go on show at Crick.
He said: “Some people will be syndicate members until they give up through old age of infirmity but for about 15-20 per cent it is a stepping stone to their ultimate goal of owning their own boat.”
Boatshare4U's Andrew Cooley says the collapses of large share boat firms means that all share owners now clearly understand that, even if one of these companies hit the buffers, the boat and its syndicate would carry on cruising. “In most cases, the individual loss would be no more than a month's management fees, while contributions into the syndicate bank account would be unaffected.”
And the sums make an interesting, argument for those who are regular and enthusiastic hirers, although the current slow-moving growth may reflect an unwillingness among some families to commit the £1,200 - £1,500 a year shared-ownership costs in addition to the initial purchase price of the share.
That's about what a family of four would pay for a week's high-season hire of a four berth narrowboat. So if you know you want holiday on the waterways every year for the next decade or so then having the use of a cared-for and modern boat for three or four weeks a year for the same money makes sense.
Of course you have to have the £7,000 to £10,000 needed to buy into a syndicate owning a new boat depending on length and specification. 

One of the BCBM share boats out on the water.

There are owners who want to sell their share in an existing boat and prices vary from around £2,000 up to the cost of a share in a new boat, depending on the current market value of the boat, the facilities it offers and it's age.
Bear in mind your own share will depreciate in the same way, although well-cared for boats have a long life.
Unless you are going into a self-managed syndicate you will probably use a management company and their fees – around £400 a year – have to added to the ongoing costs.
Of course, boating is not predictable and those annual costs can suddenly increase if your boat needs a full repaint, or a new engine, or substantial steelwork. However, as Andrew Cooley points out: “Owning a boat isn't cheap and B.O.A.T. may still stand for 'bring out another thousand', but to the owner of a 1/12 share that's just £83.33!”
Some people even use share-boating as a direct route to ownership. Chatting to a couple at Wheaton Aston on the Shropshire Union Canal recently, I was told they had purchased three shares in their syndicate over a period of years and were aiming to buy out the whole syndicate as money became available but were now thinking of buying their own boat as none of the remaining members wanted to sell. It is an interesting approach.
I know some dismiss boat-share as a form of time-share and the key difference is that you are not buying a 'right-to-use' a boat for certain weeks of the year you are actually buying the boat, or at least part of it, and with that comes both rights and responsibilities.
Most syndicates have a dozen owners – enough to give each four weeks on the vessel each year with another four weeks over for winter maintenance and other essential work.
 size is 12 or 12 plus a half share. Owners usually get at least four weeks holiday on their boat each year.
Syndicates have agreements you will sign which set out your responsibilities – filling with diesel, topping up the water and getting a pump-out as well as cleaning the boat before handing over to the next owner – although some contract out the cleaning and even complete turn-round to the marina where the boat is based.
The agreement also sets out what damage or repairs are covered by the syndicate or insurers and what will fall to the owner during their weeks on board. Major decisions, like re-paints, new engines, and changing moorings are made  at annual meetings and the rules usually specify a 75 per cent majority for selling the boat completely.
And there's the rub. With or without using a management company, you have to be willing and able to get along with other owners and to accept the inevitable compromises majority decisions create.
We have found joint owners complaining about fellow syndicate members 'who think they are the only ones who own the boat'. One older couple had bought a share after selling their own boat and couldn't understand why the others had insisted on a cratch cover – in fact they enlisted my help in removing it for their holiday.

Buying a boat-share will oblige you to negotiate the politics of a group of strangers, all of whom may expect something different from their purchase.

Most complicated of all is the sharing of weeks, but at least there are established, if sometimes complicated, systems.
Under the draw system the year is divided into four seasons and at the annual meeting owners draw weeks at random for each season. Once that is complete they can swap them amongst themselves. Unwanted weeks can be used by other owners.
The list system puts owners in a set sequence and the first choice of weeks goes to those at the top of the list and then on down. Each year the two owners at the top of the list move to the bottom.
Some have 'special' more expensive shares which give privileged right to school holiday weeks, others just find it easier for owners to co-operate by swapping school holiday weeks with those who prefer to go boating out of school holiday times.
If you are convinced boat-share may be your next step towards becoming a boater, you can buy or sell using one of the share brokerage firms, although some will,only sell shares in vessels they have built and manage, others will sell on behalf of a member of any syndicate, so you get a wider choice of second-hand shares.
There are also specialist websites and you'll even find them on E-Bay, but make sure you are paying the market rate and that you can see exactly what you are committing to.
You need to understand the true value of the boat you are buying into, especially at a time when prices are depressed, and that applies to new-build boats by management companies as well – what would a private buyer pay for a boat of similar length and specification?
You need to be happy that you will be able to keep track – not only of where your money is going but also that the finances of the entire syndicate are on an even keel and every member is paying their way. That means unfettered and regular access to the boat's bank account.
Whether you should go self-managed or pay for a management firm to operate the syndicate is still a difficult question to answer. One couple I met had a share in two ex-Ownerships boats, one self-managed and based at Norbury Wharf on the Shropshire Union and the other managed by BCBM at Nantwich on the same canal. 

Share boats at Norbury Wharf for winter maintenance.

They say it is a balance of cost against convenience and point out that much depends on the quality of the syndicate members in a self-managed set-up. That is echoed by Simon Jenkins, managing director at Norbury who has had between two and 25 share boats on his wharf over the past eight years.
“Some syndicates are very well managed and they plan ahead, recognise the work and expenditure needed to keep a boat running well and looking good.
“Others, especially with the older boats, tend to get away with as little spend as possible – just like private boat owners of some older boats – and the vessels go downhill.
“Despite that it is a good way of getting out on the canals and for some people it is a half-way house between hiring and full ownership.”

Simon Jenkins, Managing Director at Norbury Wharf Limited.

I suspect the boss of BCBM is correct when he describes boat-share as a niche market. To become a part-owner you will need to be an enthusiastic boater, have a lump sum about you to make the initial purchase and be happy to commit to spending a thousand or two every year on this type of of holiday for the foreseeable future. You probably should also expect to take a loss of up to 75 per cent on your original investment.
Many will be happy with taking a hire-boat holiday when they fancy it and doing something different with the rest of their days off. Those with deeper pockets, willing to settle for a cheaper form of boating or determined to spend every spare moment on the water will find a way to buy their own boat.
Meanwhile, and assuming they take the precautions the history of this part of the waterways industry show to be necessary, there will be a happy and slowly-growing band of share boaters who are already a fixed part of cruising our system throughout the year.
Welcome aboard.

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