Who is on the hook for slip fees?

We rented a slip in a marina on a month to month basis for our old boat. We paid our slip fees on time every month until we sold the boat a few months ago. The new owner took delivery at our old slip. He said that he had a slip lined up in another marina and he planned to move the boat to that slip within a few days. That was over two months ago but he has still not moved the boat to the new slip, and he is not paying slip rent for the old slip. The marina manager is getting impatient and we have received several demands for payment. We advised the manager that we sold the boat and that he should be talking to the new owner, but he continues to look for us for payment. Shouldn’t the new owner be on the hook for the slip fees?

Our reader and the new owner are actually both “on the hook” for slip fees, and this scenario provides an opportunity for us to look at some of the complexities associated with maritime liens.

A marina tenancy is similar to the rental of a storage space. The boat owner is basically renting a parking spot, and as such the law provides very few tenant protections even when the boat owner lives aboard. Notwithstanding the comparison to a storage space, the laws that govern a marina tenancy are a lot more complicated than the rules that are in effect when you store your piano.

When a boat owner rents a slip in a marina, he or she will usually be asked to sign a wharfage or slip rental agreement of some kind. In California, these agreements typically provide for a “month-to-month” tenancy that allows for either party (the marina or the boat owner) to cancel the lease by providing a 30-day notice to the other party.

The marina slip rental agreement establishes the rights and obligations of the parities.  These obligations are similar to the obligations associated with the rental of a dry-land storage unit, including of course the obligation of a boat owner to pay rent on a monthly basis. But the boat owner’s obligations are shared by a partner. The boat itself is obligated along with the owner, through the establishment of a maritime lien.

Maritime law throughout the world treats the vessel as a person when establishing liability for payment for services provided to the vessel, and the boat will be “personally” liable for payment through the establishment of a maritime lien. A maritime lien is a unique security device which serves the dual purpose of keeping vessels moving in commerce while not allowing them to escape their debts by sailing away. A maritime lien is automatically established when a service is provided to the vessel, even if the claim is never recorded anywhere. The lien is enforced through a complicated and expensive procedure that requires the filing of a lawsuit in Federal Court and a “civil arrest” of the vessel by the U.S. Marshals.

The lien enforcement procedure may, or may not include a claim against the owner of the boat, and this is where we take a look at our reader’s question. He thinks that the new owner should be responsible for the slip fees because our reader no longer owns the boat.

Unfortunately for our reader, the new owner never signed a slip rental agreement with the marina, and he therefore has no contractual relationship with the marina. The new owner may be liable under other legal theories which look toward the fair value of services provided, but he is not bound by any contract. Our reader, on the other hand, is clearly bound by a contract which obligates him to vacate the slip upon the termination of the tenancy and to pay monthly rent to the marina if he fails to vacate the slip.

But as noted above, our reader has a “partner” in his slip payment obligation and the boat is therefore also liable for the unpaid rent. As a practical matter, the new owner of the boat is the partner since the boat itself does not have a checkbook, and the new owner will suffer the loss of the boat if the marina pursues a lien foreclosure action in Federal Court. But, since the Federal Court procedure is very expensive, the marina will continue to pursue our reader for payment until the unpaid amount is large enough to warrant the enforcement of the lien against the boat.

In hindsight, our reader probably should have required the boat to vacate the slip upon the closing of the sale to the new owner instead of allowing the boat to stay for “a few days.” His best approach at this point is to work with the new owner to move the boat, and he should talk to an attorney to develop a strategy to make that happen.

David Weil is licensed to practice law in the state of California and, as such, some of the information provided in this column may not be applicable in a jurisdiction outside of California. Please note also that no two legal situations are alike, and it is impossible to provide accurate legal advice without knowing all the facts of a particular situation. Therefore, the information provided in this column should not be regarded as individual legal advice, and readers should not act upon this information without seeking the opinion of an attorney in their home state.

David Weil is the managing attorney at Weil & Associates (weilmaritime.com) in Long Beach. He is an adjunct professor of Admiralty Law at Loyola University Law School, is a member of the Maritime Law Association of the United States and is former legal counsel to the California Yacht Brokers Association. He is also one of a small group of attorneys to be certified as an Admiralty and Maritime Law Specialist by the State Bar of California. If you have a maritime law question for Weil, he can be contacted at 562-438-8149 or at dweil@weilmaritime.com.

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