In joint yacht ownership, the priority is to determine the nature of the right acquired. A direct vessel share, a membership in the company that owns the yacht and a right of seasonal use alone do not produce the same result. The usage calendar, costs, decision-making authority and exit price should be arranged to fit the chosen structure; when a share is transferred, the registry, form and flag requirements should be reviewed together.
Buying a yacht together creates a relationship broader than splitting the price of the boat. If it has not been settled who will use the boat in peak season, who will approve an engine renewal, or how the price will be determined when one partner wants to leave, the initial economic advantage may over time turn into a dispute. A sound arrangement shows not only what the parties agree on today but also the method to be applied when they think differently in the future.
This article mainly addresses the partnership relationship governed by Turkish law. Where there is a foreign registry, a foreign company or a choice of a different governing law, separate assessment is needed for ownership, company membership and contractual debts. Buying the shares of a foreign company does not make the buyer a direct co-owner of the yacht that company owns.
What legal structure underlies joint yacht ownership?
Under Article 688 of the Turkish Civil Code (TMK) No. 4721, in co-ownership several persons own an undivided whole in defined shares. A 25 percent share does not give ownership of a specific cabin of the yacht. Use during certain weeks is a separate arrangement for enjoyment, distinct from the ownership share. The share ratio and the days of use may be set differently by agreement; this choice should be stated expressly.
Where the boat belongs to a company, the company is the owner. A company partner's right derives from the company share and, if any, a use agreement. It cannot be assumed that he has direct power of disposal over the yacht. A person who has bought only a use package may have a right of service or use, depending on the scope of the contract. The phrase "shared boat" in a sales presentation alone does not show which of these three models has been set up.
Where a vessel in co-ownership is used, under an agreement among the persons, for the benefit of all of them on the water, a shipowning partnership (donatma iştiraki) under Article 1064 of the Turkish Commercial Code (TTK) No. 6102 comes into question. Every group of friends vacationing together is not automatically a shipowning partnership. Nor does this structure arise where a commercial company is the sole owner of the vessel. Where a simple partnership (adi ortaklık) is claimed, Article 620 et seq. of the Turkish Code of Obligations (TBK) No. 6098 is also assessed separately; the title of the contract used is not alone decisive.
Before the purchase, the current registry extract, the share ratios, the owner or company representative, and existing mortgages and attachments should be reviewed. A difference between the persons who signed the partnership agreement and the persons shown in the registry may indicate that behind the promised use there is no expected ownership security.
How should the usage calendar and delivery of the boat be arranged?
Under Article 693 TMK, a co-owner may use the property to the extent consistent with the rights of the others. In a dispute, the court may determine the manner of use. However, an open calendar prepared before the season starts is the basic tool for continuing shared use without recourse to court. The calendar should consider not only the number of days but also the economic and practical value of the dates.
Rotating priority or a draw may be chosen for the summer months, public holidays and school holidays. The date of early booking, the transfer of an unused week, the notice of cancellation and the recording of later swaps should all be determined. For example, if one partner takes the same high-season weeks every year, leaving the other with an equal number of low-season weeks does not always result in balance.
Terms of use should be made concrete as to who may use the boat, proof of competence, navigation area, night navigation, number of guests, appointment of a skipper, and making the boat available to third parties. Consent among the partners does not replace the competence or activity permit required by legislation. Insurance cover must also match the conditions on who uses the boat and for what purpose.
At each handover, the date, engine hours, fuel level, equipment list and photographs of any existing damage may be recorded. A fault not notified to the next user gives rise not only to repair costs but also to disputes over loss of use. The method of compensating for days lost to bad weather and days cancelled due to technical failure should be written separately; not every cancellation can be attributed to the fault of the same person.
How are maintenance, insurance and operating costs shared?
Under Article 694 TMK, unless otherwise agreed, participation in management costs, taxes and other obligations is in proportion to the share. A co-owner who pays more than his share has a right of recourse against the others. However, if it has not been stated which payment is a common cost and which is a personal usage cost, knowing the percentage alone does not settle the accounts.
Fixed items such as marina fees, annual insurance and scheduled maintenance can be separated from usage-dependent items such as fuel, personal hospitality and special route expenses. For large expenditures such as an engine overhaul or new electronic equipment, an annual budget, a quotation process and an approval limit should be set. The rule that "every cost is paid equally" should be accepted knowingly where shares differ or the intensity of use differs. The contractual framework of marina fees and service items is discussed in the article marina berthing agreement.
In sharing damage, normal wear and tear, prior faults, the user's fault and insurance cover are assessed separately. Assuming that the policy deductible always falls on the last user is not a correct presumption. When and how the damage occurred should be investigated through handover records and technical inspection. Loss compensated by insurance should not be collected again from another partner within the same scope. For the way forward where the policy terms or a claim are rejected, see uncovered cases under yacht insurance.
In the joint expense account, the opening balance, advances, invoices, payment dates and the period-end difference should be visible. A single partner using his own bank account does not by itself regulate spending authority or the legal protection of the money. Payments made with explanations, documents opened to all partners, and reconciliation at regular intervals make proof easier.
Which decisions are taken by majority and which jointly?
Not all decisions are subject to the same majority under the co-ownership regime. TMK Article 690 governs ordinary management, Article 691 important management matters, and Article 692 extraordinary management and dispositions. For important management matters, the statutory measure is the majority of shares and of co-owners. More stringent conditions may apply where the purpose to which the yacht is dedicated is changed, or for dispositions over the whole.
Within TMK Article 689, co-owners may unanimously change the arrangement for use and management. However, the powers to carry out the work necessary to preserve the value of the property, and to take immediate measures against a danger of imminent harm, cannot be entirely removed by agreement. In an emergency where water ingress is damaging the boat, waiting for the regular budget meeting is one thing; treating a new comfort fitting as an urgent need is another.
In a shipowning partnership, under TTK Articles 1066–1067, the valid contractual arrangement is examined first, followed by the statutory provisions. The statutory decision majority is calculated on the basis of more than half of the partnership shares; decisions that amend the contract or are foreign to its purpose require unanimity. This majority system should not be confused with the share and co-owner majority prescribed for ordinary co-ownership.
The agreement should contain provisions on convening meetings, electronic approval, conflicts of interest and the procedure in case of a tie. The person who takes a spending decision and the representative who will sign a contract on behalf of a third party may not be the same person. A budget approval given internally does not on its own determine the scope of authority to represent the partnership vis-à-vis outsiders.
Renting out the yacht and debts toward third parties
A decision by the partners to rent out the yacht in unused weeks is examined separately, because it moves the boat from private use to a revenue-generating activity. Required permits, boat status, staff, insurance and contracts with consumers are not completed by an internal agreement among the partners. Which majority may adopt a rental decision is determined by the existing structure and the purpose of dedication.
In revenue calculation, booking payments, cancellation refunds, agent and manager commissions, taxes and maintenance costs should be tracked separately. A partner giving a special discount to a customer he brought in, or allocating his own use ahead of revenue, may create a conflict of interest. The date on which net income will be distributed and the size of the maintenance reserve should be written in advance.
For the debts of a shipowning partnership, TTK Article 1080 regulates the personal liability of a shipowning partner in proportion to his partnership share, subject to special limitation provisions. However, a personal surety, an independent debt undertaking, or a person's own tort may produce different results. The sentence "I only take a risk equal to my share" is not a guarantee valid for every legal ground.
In the decision of the Izmir Regional Court of Appeal, 17th Civil Chamber (İzmir Bölge Adliye Mahkemesi 17. Hukuk Dairesi), dated September 8, 2022, E.2022/1412, K.2022/1398, in a dispute over the winter storage fee of a boat, TTK Article 1080 was considered, and a procedural dismissal based on the view that the other partners are necessary co-litigants was set aside. This decision does not show that the same procedure applies to all partnership suits; it shows that the type of partnership and the debt claimed must first be correctly determined. The merits of the claim are not definitively resolved by this decision.
How is a vessel share transferred; is the consent of the other co-owners required?
For the transfer of a share in a vessel entered in the ship registry, TTK Article 1007(1) requires a written agreement and notarized certification of the signatures, or that the agreement be made at the ship registry directorate. The transfer of a whole vessel under TTK Article 1001 is not the same transaction as the transfer of a share. In the transfer of a shipowning partnership share in a registered vessel, registration in the ship registry is also required, in addition to the transfer of the vessel share (Article 1007(2)).
In principle, the Act allows a shipowning partner to transfer his partnership share without the consent of the other partners. However, if, as a result of the transfer of a vessel share or partnership share, the vessel would lose the right to fly the Turkish flag, the consent of all partners or shipowning partners is required (Article 1007(3)). This special provision should not be bypassed by applying only the general ownership rules.
TMK Article 732 on statutory pre-emption concerns shares in immovable property; under TTK Article 936, vessels are movables. Accordingly, it should not be assumed that other persons have an automatic statutory right of pre-emption in every sale of a joint yacht. A right of priority offer, a contractual right of pre-emption, a valuation and a notification mechanism may be set up separately. The effect of such an arrangement on third parties and its power to restrict transfer should be checked according to the structure chosen.
The buyer should be given the current usage calendar, approved expenses, ongoing bookings and a debt breakdown. In a shipowning partnership, the notice and liability provisions in TTK Article 1081 are also important. An agreement between seller and buyer that "the buyer pays the old debts" does not in every case alter the creditor's rights without the creditor's participation.
Exit from the co-ownership and sale of the boat
In co-ownership, under TMK Article 698 the right to demand partition is the rule; statutory exceptions and time restrictions that are not appropriate are taken into account. The right to demand partition may be restricted by legal transaction for at most ten years. This does not mean that, in any partnership model, a co-owner may by unilateral notice oblige the others to buy his share at a certain price.
For a contractual exit, the date of an independent valuation, the valuation cost, the effect of existing debts, the payment schedule and the moment of delivery should be determined. The initial purchase price and the market value years later may differ. Nor can it be accepted that every expense on the boat increases its sale value by the same amount. Where there is a serious difference between several valuations, a third expert procedure may be provided for.
If agreement cannot be reached, partition is assessed under TMK Article 699. Since physical division of the yacht without significant loss of value is usually not possible, partition by sale may come into question. A sale by auction among the partners alone depends on the consent of all partners. For disputes over partition of movables and termination of co-ownership, the pre-litigation mediation requirement under Article 18/B of Law No. 6325 on Mediation in Civil Disputes should also be taken into account. For termination and liquidation in structures that have the nature of a simple partnership, reference may be made to the article on liquidation of a simple partnership.
In a shipowning partnership, TTK Articles 1082–1086 set out special provisions on termination, exit for good cause and liquidation. A request to the court for dissolution following the rejection of a request to withdraw for good cause, and the possibility of taking over the share at its real value, are not identical to an ordinary co-ownership suit. Furthermore, the death of a shipowning partner does not by itself end the partnership. Which procedural requirement and which court apply should be determined according to the legal nature of the claim.
Core provisions a co-ownership agreement should contain
The text to be signed should clearly show the identity of the boat and the right acquired. In particular, the following provisions should be prepared together:
- Rights and registry: Owners, share ratios, company or use model, registry information and existing encumbrances.
- Use and handover: Season calendar, authorized users, cancellation, damage notification and handover record.
- Financial arrangement: Fixed and variable costs, advances, approval limit, access to documents and distribution of revenue.
- Decisions and representation: Meeting procedure, majority, emergency intervention and signing authority vis-à-vis third parties.
- Exit and continuation: Valuation, share transfer, death, settlement of debts and dispute resolution.
The usage agreement, the purchase documents and the authority given to the management company should be compared within the same file. If a broad authority granted in one document appears to have been narrowed in another, unexpected consequences may arise in practice, such as a sale of the boat or the assumption of a large debt. The purpose of reviewing the contract is to make such contradictions visible before the transaction.
Conclusion
The sustainability of joint yacht ownership depends on structuring correctly the ownership arrangement, the authority to represent and the method of exit, not merely on sharing the days of use. Using the same contract text for co-ownership in shares, company membership and a shipowning partnership may hide important distinctions. When current registry records, the partnership text, the expense account and the usage arrangement are reviewed together, the parties' rights and the risks they assume can be determined more clearly.
Related articles: Inheritance transfer of yachts and boats; foreign heirs; brokerage, commission and earnest money in yacht sales; yacht management agreement; yacht charter agreement.
Frequently Asked Questions
Does buying a quarter of a yacht always give three months of use per year?
No. The ownership share and the actual usage calendar are different things. The duration of the use right, its seasonal distribution and the rights of the other partners are determined by the contract and the applicable co-ownership provisions. Details: How should the usage calendar and delivery of the boat be arranged?
Can one co-owner have maintenance carried out without the others' consent?
The outcome depends on whether the work is ordinary, important, or necessary and urgent. A necessary measure against a danger of imminent harm and an optional renewal are not within the same authority. The necessity and the amount of the expense should be documented. Details: Which decisions are taken by majority and which jointly?
When selling my share to a third party, is the consent of all co-owners required?
Not in every case. However, the formal requirements for a share in a registered vessel, the special provisions of a shipowning partnership, contractual arrangements, and whether the transfer would result in the loss of the right to fly the Turkish flag are all examined. Details: How is a vessel share transferred; is the consent of the other co-owners required?
Can the other co-owners automatically buy my share first?
The statutory pre-emption provision for immovable property does not apply to a yacht automatically. If a contractual pre-emption or priority offer right exists, its scope, duration and legal effect are assessed separately. Details: How is a vessel share transferred; is the consent of the other co-owners required?
In a year when I do not use the boat at all, am I released from marina costs?
As a rule, not using the boat does not remove the common costs arising from ownership. The applicable cost-sharing arrangement and the nature of the expense are decisive. Expenses tied to personal use may be separated. Details: How are maintenance, insurance and operating costs shared?
If we cannot agree, can I file a partition action directly?
For a request to partition movable property or to terminate co-ownership, the pre-litigation mediation requirement is taken into account. For different claims, such as the dissolution of a shipowning partnership, special provisions apply and the nature of the claim must be examined separately. Details: Exit from the co-ownership and sale of the boat.
Sources and legal bases
1 — Turkish Civil Code No. 4721, text as adopted by the Grand National Assembly of Türkiye (TBMM), in particular Articles 688–699 and 732. The adopted text is a historical version; the relevant provisions have been applied.
2 — Turkish Commercial Code No. 6102, version published by the Ministry of Trade, in particular Articles 936, 940, 1001, 1007 and 1064–1087.
3 — Turkish Code of Obligations No. 6098, text as adopted by the Grand National Assembly of Türkiye (TBMM), Article 620 et seq.
4 — Law No. 6325 on Mediation in Civil Disputes, Ministry of Justice, Article 18/B.
5 — Izmir Regional Court of Appeal, 17th Civil Chamber (İzmir BAM 17. HD), September 8, 2022, E.2022/1412, K.2022/1398, full text access. The access provider may require membership; the scope of the decision is stated in the text.