Do Six-Pack Charter Rules Apply to a ‘Boat and Breakfast’ Operation?

I own a four-stateroom motoryacht that I am setting up in a charter business. I understand that I am limited to six paying passengers, or a “six-pack” charter while I am under way. However, the boat will sleep eight people comfortably and I am thinking of setting up a “Boat and Breakfast” operation to cater to overnight guests. Do Coast Guard regulations apply to my dockside use of the boat?
The reader is referring to the Coast Guard regulation (46 C.F.R. sec. 2.01-7), which allows a vessel measuring under 100 gross tons to carry up to six paying passengers without undergoing a rigorous Coast Guard inspection (the limit is increased to 12 passengers if the boat measures more than 100 gross tons).

“Six-pack” charters offer a relatively inexpensive avenue for small sportfishing and excursion vessels to be used in a charter business, since they can avoid the expensive Coast Guard inspection process. These operations are not, however, completely free from regulation.

Regarding the reader’s “boat and breakfast” idea, we should first note that Coast Guard regulations apply to any boat that is carrying passengers for hire, whether it is tied to the dock, at anchor or under way. As such, the “boat and breakfast” will be subject to these regulations, and it will be limited to six overnight guests, even if they are staying aboard while the boat is dockside.

One regulation that is often overlooked for six-pack charters, and which would also apply to the “boat and breakfast” idea, is the U.S.-build requirement. The United States is one of many nations that protect their domestic transportation industries through “cabotage” laws. These laws require the transportation of passengers or cargo between U.S. ports to be performed aboard U.S.-registered and U.S.-built vessels.

The U.S.-build requirement may be waived in some cases by submitting an application to the U.S. Maritime Administration. However, many six-pack charters are conducted aboard foreign-built boats without a waiver, simply because this requirement is rarely enforced for uninspected boats. Regardless of the risk of getting caught, this is obviously not a good idea. An illegal charter may result in thousands of dollars in fines, and a possible denial of insurance coverage. 

Another regulation that would interfere with the “boat and breakfast” idea is the requirement that all vessels be operated by a licensed captain when carrying at least one paying passenger. Like the other regulations, this regulation is effective even when the boat is tied to the dock. A licensed captain of a “boat and breakfast” would therefore need to spend the night aboard the boat with the paying guests, even if the boat never leaves the dock.

Many of these regulations may seem unnecessary for a boat that will never get under way. The Coast Guard, however, looks at the ease with which a boat that is tied to the dock may be untied from the dock, and they err on the side of caution.

The only way to avoid the regulations would be to “remove the vessel from navigation” in such a way that it is impossible, or at least highly improbable, that the boat will ever leave the dock. Queen Mary in Long Beach is a good example of this, since it is stuck in the mud inside a rock breakwater.

A boat that is locked and chained to the dock may also qualify, but the local Coast Guard Marine Safety Office should be contacted before trying this approach. And, as always, a maritime attorney experienced in passenger vessel regulation should be contacted for more information.

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2 thoughts on “Do Six-Pack Charter Rules Apply to a ‘Boat and Breakfast’ Operation?

  • February 23, 2019 at 10:20 am
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    Thank you for your advise regarding the Bed and Breakfast laws. It seems that you are stating that a Captain must be on board during the use of a vessel on a mooring or dock. I am certain that that is opposite of requirements, in that one is allowed to “rent” a vessel. Under the circumstance of a rental, whether the vessel in under way or moored, there is no six person maximum requirement for un-inspected vessels. This is true so long as the Captain and or owner is “NOT” on board. With a “rental” there are fewer limitations, not more. A rental is also known as a bare boat charter (no captain, owner or crew). Please correct me if I am wrong. I’m not an attorney.

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    • February 25, 2019 at 6:02 pm
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      I love it when a reader starts a discussion by saying that they are “certain” that I am wrong, and then they follow up by saying they are not an attorney and ask me to correct them. So with that in mind, let’s take a look at this. First, a boat “rental” is not actually a thing. The legal term is a “charter,” and there are three types of charters. A “time charter,” which is for a set period of time, a “voyage charter,” which is for a specific voyage, and a bareboat, or demise charter, under which the boat is turned over to the charterer as the temporary owner of the boat. Time and voyage charters are similar. The owner (or owner’s representative or captain) maintains control of the vessel at all times, is responsible for all operating costs, selects the captain and crew and commands the vessel, and the captain needs to be licensed by the Coast Guard. A “bareboat charter” is different, and you have stated a partially accurate explanation of a bareboat charter. With a bareboat charter, the charterer, or customer, selects the captain and crew, pays all operating expenses, and for most purposes acts as the owner of the vessel during the term of the charter. The owner (and owner’s insurance company) may require a licensed captain to be aboard, but the owner cannot require a SPECIFIC captain. The captain MAY be the charterer, if that person is qualified. The selection of the captain usually comes down to the requirements of the insurance company, who must approve the captain under the terms of most marine insurance policies. Note that none of this has anything to do with whether the boat is tied to the dock or underway. The requirements are the same. So, getting back to your original question: (1) There is technically no legal definition or arrangement known as a boat “rental;” (2) A bareboat charter arrangement may allow a boat to operate in a “bed & breakfast” arrangement without a licensed captain aboard if the charterer is free to select the captain and crew without input from the owner and if the captain is approved by the insurance company as a boat operator; and (3) The rules are the same regardless of whether the boat is underway or tied to the dock.

      Hope that’s helpful.

      Reply

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